E110 Million Debt Threatens Our Financial Stability – EHB CEO

The Eswatini Housing Board (EHB) has appealed to the Minister of Housing & Urban Development, Appolo Maphalala to help them write off some of their debt.

EHB Chief Executive Officer Mduduzi Dlamini says their ability to meet their mandate has been made more challenging by the fact that they are being compelled to pay for debt they inherited from the government.

The CEO disclosed this last week Friday during the Minister of Housing and Urban Development’s visit to the company. The visit was meant to engage the Minister and his team on EHB’s strategy in the pursuit of an efficient and effective reform of housing and human settlement in Eswatini.

Dlamini said some of their financial challenges emanate from inherited housing schemes such as Nkhanini in Nhlangano, Msunduza in Mbabane, and the Industrial Housing Company.

He divulged that the debt for the Industrial Housing Company is E13 million and Nkhanini is E23.8 million.

The Industrial Housing Company was formed by the government in 1981 and was responsible for administering and managing government houses.

“Interestingly, the Industrial Housing Company debt dates back from 1981, yet EHB was established in 1988. We have engaged with the Auditor General’s office on the matter stating why the debt should not be carried by us. Unfortunately, the AG’s Office has vehemently pushed for us to honour this debt. As a result, we need the Ministry to intervene in the matter. The Nkhanini debt on the other hand relates to a development we inherited from the government which was meant for our capitalization. After signing all relevant documents it then emerged that the Ministry had opened a revolving fund to the sum of E23.8 million. The sad part is we have already spent a lot of money on infrastructure in Nkhanini, as there was practically no infrastructure when the township was handed to us. In the case of Msunduza, the mistake occurred at the onset as were never supposed to be the implementing authority. The rightful authority to do the administration is the Municipal Council of Mbabane,” the CEO noted.

The CEO added that what further exacerbates their financial challenges is that their revenue mostly comes from rentals which is not sufficient to service their debt and liabilities.

“Around E110 million is weighing the organization down in terms of liabilities. E65 million of that amount relates to loans which we are servicing with respective banks in the country for the developments we have embarked on over the years. We do not necessarily have a problem with the E65 million debt as it has been mostly incurred by us. Our challenge is the debts we inherited.  What makes this situation stickier is that from all our revenue streams we generate E3.2 million per month. The aforementioned amount must then service around E6 million in monthly expenses, which includes salaries, loans, and other operational expenses. As an enterprise, we cannot continue like this. The sad part is that we have carried out our mandate to the best of our ability.”

He said it was key for the Ministry to urgently engage with various stakeholders such as the Ministry of Finance, and all other relevant government departments to ensure that an amicable solution is found on the matter.

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