![[Swaziland] Workers outside a factory.](https://assets.thenewhumanitarian.org/s3fs-public/styles/responsive_large_2x/public/images/20042204.jpg.webp?itok=PhAcIC07 "An attempt to stimulate the economy ends in fraud")
An initiative to kick-start Swaziland's struggling economy resulted in the government coffers being defrauded of R50 million (US$7 million).
A small business training scheme designed to nurture Swazi entrepreneurs has instead seen parliament appoint a commission of inquiry to trace the missing millions and test its recently declared anti-corruption drive.
The commission heard that the initial sum for the courses ballooned five-fold to R50 million ($7 million) without the authority of the finance ministry, despite two cabinet ministers being aware of the cost inflation, and several well-connected people becoming "overnight millionaires".
Some individuals and companies awarded tenders to conduct the training sessions were unqualified to do so, while others inflated the number of students attending the courses, and one company claimed R1.5 million ($214,000) for training what amounted to "ghost students".
The government committed R10 million ($1.4 million) to training people to run businesses after King Mswati III set a goal of stimulating the economy by creating a class of small and medium-sized enterprises.
Swaziland's economy has been in a steep decline for the past three years. Tens of thousands of jobs in the garment industry have disappeared and an annual growth rate of 3.6 percent has dropped to 1 percent. Once a net exporter of food to the region, two-thirds of its one million people now live below the poverty line, according to the United Nations Development Programme.
Musa Fakudze, principal Secretary for the ministry of finance, said political pressure had forced her to release additional funds, even when these surpassed the allotted R10 million ($1.4 million), because parliamentarians were anxious to show they were doing something to create businesspeople in their constituencies.
At a job summit last year, financial institutions backed the king's call to develop entrepreneurs and pledged to make R1.6 billion ($200 million) available as loans to small and medium entrepreneurs after they qualified. The trainees, mostly from rural areas, received certificates after the crash course, which they believed would entitle them to bank loans.
Stanley Matsebula, a director of Swazi Bank, told the commission that men armed with traditional fighting sticks had descended on branches of the financial institution demanding loans. "They said it was the 'king's money', and they were entitled to it."
However, Central bank governor Martin Dlamini told the commission that "the programme was not in line with what banks required from entrepreneurs", and normal banking practices had to be followed, such as collateral for loans and business plans, before money could be borrowed.
The scandal is seen as a litmus test of Prime Minister Themba Dlamini's stated "zero tolerance" for corruption. According to one businessman, "The culprits are known. If prosecutions are not forthcoming from the commission of inquiry's investigations, this will send a strong signal that 'it's business as usual'."
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A small business training scheme designed to nurture Swazi entrepreneurs has instead seen parliament appoint a commission of inquiry to trace the missing millions and test its recently declared anti-corruption drive.
The commission heard that the initial sum for the courses ballooned five-fold to R50 million ($7 million) without the authority of the finance ministry, despite two cabinet ministers being aware of the cost inflation, and several well-connected people becoming "overnight millionaires".
Some individuals and companies awarded tenders to conduct the training sessions were unqualified to do so, while others inflated the number of students attending the courses, and one company claimed R1.5 million ($214,000) for training what amounted to "ghost students".
The government committed R10 million ($1.4 million) to training people to run businesses after King Mswati III set a goal of stimulating the economy by creating a class of small and medium-sized enterprises.
Swaziland's economy has been in a steep decline for the past three years. Tens of thousands of jobs in the garment industry have disappeared and an annual growth rate of 3.6 percent has dropped to 1 percent. Once a net exporter of food to the region, two-thirds of its one million people now live below the poverty line, according to the United Nations Development Programme.
Musa Fakudze, principal Secretary for the ministry of finance, said political pressure had forced her to release additional funds, even when these surpassed the allotted R10 million ($1.4 million), because parliamentarians were anxious to show they were doing something to create businesspeople in their constituencies.
At a job summit last year, financial institutions backed the king's call to develop entrepreneurs and pledged to make R1.6 billion ($200 million) available as loans to small and medium entrepreneurs after they qualified. The trainees, mostly from rural areas, received certificates after the crash course, which they believed would entitle them to bank loans.
Stanley Matsebula, a director of Swazi Bank, told the commission that men armed with traditional fighting sticks had descended on branches of the financial institution demanding loans. "They said it was the 'king's money', and they were entitled to it."
However, Central bank governor Martin Dlamini told the commission that "the programme was not in line with what banks required from entrepreneurs", and normal banking practices had to be followed, such as collateral for loans and business plans, before money could be borrowed.
The scandal is seen as a litmus test of Prime Minister Themba Dlamini's stated "zero tolerance" for corruption. According to one businessman, "The culprits are known. If prosecutions are not forthcoming from the commission of inquiry's investigations, this will send a strong signal that 'it's business as usual'."
jh/go/he
This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions
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