Q: Apart from being the Minister of Finance, you are a highly successful businessman. Please share your entrepreneurial journey with us.
A: Firstly, thank you for having me in your esteemed publication. And yes, before being appointed by His Majesty King Mswati III, I ran Montigny Investments, a business in which I am still a shareholder. The company was founded by me in 1997, and it operated in the Shiselweni region, Nhlangano to be precise. We focused on timber trading and grew gradually, part of our growth strategy became the purchasing of farms.
The big leap came in 2014 however, when Montigny Investments together with the Public Service Pensions Fund (PSPF) and the Eswatini National Provident Fund (ENPF) acquired Sappi Usuthu, for a billion Emalangeni. I think this was arguably one of the biggest transactions that the country had ever witnessed. I believe that being part of such a huge transaction prepared me for a bigger task; which is being the country’s Minister of Finance.
Q: How important was your business background for your current role in government?
A: It has been extremely important because I have navigated all the stages of entrepreneurship, from starting small and growing to a medium-sized business and thereafter running a big company. Before starting Montigny I was a honey farmer, I would walk into shops around Eswatini and ask shops to buy my honey, some shops took it, and others chased me away. So I know all the stages of running a business.
Even though Montigny Investments is an agriculture-based business, when it became a multi-billion emalangeni entity my role as a CEO was no longer in the field, but managing the finances from morning until night. This assisted me greatly in this role.
Q: There is a story behind the name Montigny. How did the name come about?
A: It’s an exciting family story. My mother’s side of the family is originally from France, my great-grandfather is the one who migrated to Eswatini. There was a family Chateau in France, which was called Chateau de Montigny. So when I started a business I thought to myself why not call it Montigny? In hindsight, if I knew that the company would be so successful, I would have come up with probably a different name…hahaha (chuckles).
Q: What were the main challenges that you came across as you started as a young entrepreneur?
A: The biggest challenge I faced was not being flexible enough to make the necessary changes as the business grew. My businesses had no processes and systems in the beginning. But, as an entrepreneur in the early days, one is only focused on ensuring profits are made. I recall receiving a phone call from the bank saying that there was a lot of money flowing into my personal account, and they requested I open a business account. This is when I registered my business as a company as all along I was operating as a sole trader.
I bring this up because I believe entrepreneurship is the answer to reducing unemployment and ultimately dealing with the poverty scourge the country faces. I believe businesspeople and the government must play a major role in assisting small and medium enterprises (SMEs) with systems and processes that will ensure they succeed.
Q: You were then appointed as an MP, and ultimately the Minister of Finance by His Majesty King Mswati III. Did you see this appointment coming?
A: Well, when His Majesty appointed me to be a Member of Parliament (MP), I did realize that I might be a Minister but thought that I would be the Minister of Agriculture as that is the sector I operated in. I was surprised when I was made the Minister of Finance but it’s one position that I embraced with open hands and have done my best to serve the country. It has been a huge honour.
Q: How challenging have the past five years in government been, considering your private sector background?
A: I can safely say that being a Minister is tougher and more challenging than being a Managing Director (MD) of a private sector entity. Honestly, before I got into government, I did not think it was this taxing, and most private-sector people think it’s easier in government. One of the reasons the government is more challenging is that there are a lot of checks and balances compared to the private sector and as a Minister, you are accountable to more stakeholders. For instance, if you want to restructure in government it could take you about three years to effect that restructuring, while in the private sector, the period is much shorter. Again, I must hasten to say that I have come to appreciate why it takes longer to effect changes in government.
Another major challenge I have battled is dealing with the media. The first year was tough, I was not used to being heavily criticized in public. To have my face on the front page of newspapers was tough and I took it personally. There were times when I struggled to sleep. I am happy to say that I am now used to it. I have got to the point where I appreciate the criticism and fully understand what the position I hold means and also represents. When you come to think of it, as the Ministry of Finance we are responsible for handling taxpayers’ money and we must account, and yes, in most cases that scrutiny and criticism is warranted.
In my tenure as the Minister, I have tried my best to ensure that we do things more transparently and openly. Ultimately, the positions we hold are public offices and we use public funds which means that we must be open to public scrutiny and the media should play that watchdog role as that is important for strengthening the country’s governance systems.
Q: You were also one of the Ministers who came under heavy scrutiny during the 2021 political unrest in the country, following assertions that you were defending an undemocratic political system.
A: As stated earlier citizens are free to criticize people who hold public office. However, I wish emaSwati would be allowed to spend time in parliament to get a sense of the checks and balances that the Tinkhundla system has. The Tinkhundla system of government is highly democratic because no law or regulation is passed without it going through parliament. The members of parliament are the ones that need to approve. So in essence, this system is highly democratic.
Q: In your first year in office, the country was going through a tough economic period that saw many reforms being implemented, these included the hiring freeze. Explain why the Ministry effected such measures.
A: You are spot on, when we got into office the country was going through a tough economic time. To put it bluntly, we did not even have money for salaries in the first couple of months. Fortunately, the Central Bank of Eswatini came through for us and opened an avenue and we were able to receive an advance. Our fiscal deficit was at 7.5% and this is very high and dangerous for any country. Secondly, we owed suppliers E6 billion yet expected the same suppliers to continue supplying us which was unsustainable.
The Ministry then came up with the Medium Term Fiscal Framework working closely with international partners such as the IMF & and the World Bank. The purpose of the MTFF was for the Ministry to come up with strategies that would ensure that we came out of the fiscal deficit mess we were in. Some of those reforms entailed cutting down on government expenditure. The option we had was to either increase taxes or cut expenditures. We chose the latter because we could not increase taxes while households were financially constrained.
This meant we had to implement the hiring freeze as government expenditure accounts massively for wages in the country. To give you some perspective, when we started the process the wage bill of civil servants was 42% of the national budget, which was highly unsustainable. The wage bill now stands at 34%, which is a big improvement, but globally countries aim for a government wage bill of 25%. As a country, we believe that we could get to at least 30%. It is important to highlight that there are several cost-cutting measures that we implemented not just the hiring freeze.
It is also important to clarify that we were not excited about the hiring freeze because we understand that one employed person plays a vital role in the economy. We are, however, happy that as the fiscal deficit reduced we have been able to resume the hiring of civil servants. Arrears are also now under control.
Q: Some people state that one of the reasons we experienced political unrest in 2021 was because of the cost-cutting measures implemented by the government. Do you think the measures had any bearing on the aforementioned incident?
That is an interesting assertion, however, there were several external factors at play. During the COVID-19 period, people’s freedom of movement was restricted. This caused people to be frustrated and angry around the world. In Eswatini, what might have started as political motives, quickly turned into people (with no political intent) taking into the streets due to this pent-up frustration.
Even though the budget was being reduced during this period we ensured that the budget for Education, Health, Deputy Prime Ministers Office, Scholarships, and infrastructure particularly roads continued to increase as these budget items directly impact emaSwati. Worth noting as well is that during the COVID-19 pandemic government with the assistance of development partners and the Kirsh Foundation made considerable strides in providing food and cash transfers to the most vulnerable.
Q: The Post-COVID-19 Economic Recovery Report 2023 notes that Eswatini was the biggest growing economy in the Southern African Development Community (SADC) region in the 2020- 2021 period. This is interesting because the country still faces a huge unemployment problem. How was the country able to grow so much yet facing this imminent challenge?
A: The report was very important for the country, mainly because it was against the backdrop of the COVID-19 pandemic, social unrest in the country, and the Russia-Ukraine war. What took place is that a number of the big companies in the country were going through expansion programmes during this period which was astonishing considering that this was during uncertain economic times. These programmes led to the country’s GDP growing at an average of 3% which was the highest in the region. These were mostly companies in the manufacturing sector.
However, as you mentioned the country still faces a huge unemployment challenge. Fixing the unemployment problem is going to take a while. But, growth in the manufacturing space, huge growth in retail, mines opening, new factories opening, and the Lusip II project will play a huge role in creating employment in the country.
Q: What should the average Swati expect from the government going forward?
A: Since the country is now experiencing a bit of growth and also the 14% increase in the national budget should lead to the pressure on households being lessened. So over the next couple of years, we believe that there will be increased employment, not just from the government, but the private sector as well. The Ministry of Finance working with other ministries such as the Ministry of Commerce Industry and Trade and the Ministry of Economic Planning & Development is working on ensuring that the country becomes a private sector-led economy. The government in collaboration with the private sector is working on measures that will ensure that the private sector thrives. The next phase for the government is to focus on ensuring that these levels of unemployment are reduced.
Q: South Africa, our biggest trading partner is struggling immensely due to load-shedding challenges and political infighting, what does this mean for the country, mainly because you believe we will witness growth in the coming years?
A: That’s a great question because as you rightly mention South Africa is our biggest trading partner. There is, however, a counter-cyclical view to this. South Africa has been recently reported to be the fourth largest exporter of Foreign Direct Investment (FDI). In light of this, we should therefore, position Eswatini to attract those investors leaving South Africa for whatever reason, instead of them flocking to countries like Mauritius, Australia, and New Zealand, among others. We need to try and keep them within the region. Furthermore, history suggests that when South Africa is facing economic growth challenges, Eswatini’s growth tends to be good while when South Africa is performing well, Eswatini’s growth tends to lag.
Q: What would you say was your biggest highlight while you were in office?
A: I believe being part of the team that set up the Southern African Customs Union (SACU) Stabilization Fund ranks as one of our major achievements as a Ministry. This is not to water down some of the Ministry’s other achievements, but the SACU Stabilization Fund will enable the country to continue on a sustainable growth path. It is no secret that SACU receipts are unpredictable and have at some point contributed to the country facing financial constraints. The Fund will also enable the country to easily sell itself. Investors will be more comfortable investing in the country as the Fund presents an element of sustainability. I think we have worked hard to position the country to be on a sustainable growth path.
Q: What is one unpopular thing that you believe you will be remembered for in your five-year tenure?
A: There are several things, but as I previously stated I understand and acknowledge why I and the Ministry have been criticized. But I think the issue of banning grey import vehicles ranks at the top, as it affected emaSwati. Again this was a decision that we had to take as it led to an increase in SACU receipts obtained by the country. This is because most people are purchasing vehicles and other equipment from the SACU region which then increases the possibility of the country receiving more from the pool. Our percentage from the SACU pot has moved from around 7% to 10.8% which is good news for the country. The increase in the country’s share means that, as a country, we should do better for the next couple of years.
Thank you for your time, Minister.
It has been a pleasure.