STATEMENT BY THE RT HON PRIME MINISTER
DR B.SIBUSISO DLAMINI
AT THE SWAZILAND INSTITUTE OF ACCOUNTANTS’ ANNUAL DINNER AND GRADUATION CEREMONY
AT THE ROYAL SWAZI SPA HOTEL
THURSDAY 29 SEPTEMBER 2016
Honourable Ministers
Dr Nombembe, Chief Executive Officer of the South African
Institute of Chartered Accountants
Chairman, Council, Members and
Executive Director of the Swaziland Institute of Accountants
Distinguished Guests
Ladies and Gentlemen
It is my honour, on behalf of His Majesty’s Government, to extend a warm welcome to all here this evening, especially to Dr Nombembe, and to thank him for making the journey to our country. I am sure, Dr Nombembe, that our Institute will take full advantage of access to your experience and wisdom, and the opportunity to share thoughts and issues with you during your stay in Swaziland.
We need accountants in our economy, as we need surveyors, architects, engineers and lawyers. Each has a vital role to play. An economy of the 21st century has a public and private sector of some complexity in terms of the measurement of financial performance and status, as well as the processes in place for proper accountability and risk minimization, followed by regular and thorough scrutiny in the form of independent audit. This is the place and indispensable need for the accountant, whether accounting or auditing. An economy that lacks financial propriety and the properly qualified watchdogs is the equivalent of a headless chicken – for a very short time it has no idea where it is going and then it packs up altogether.
The laws, regulations and guidelines under which an auditor works are vital in inducing financial accountability that provides comfort not only to shareholders, suppliers and the general public but also sends a really important signal to potential investors. And we need investors. The audit practice reviews of our domestic firms and their partners, conducted under an agreement with the ACCA, make a valuable contribution to sustaining the necessary standards.
Over the past six years the number of registered accountants has risen from 197 to 258. That is very encouraging but we need more. The training opportunities are, however, limited by the very small number of registered auditors in public practice and the preference for some potential trainees to work as accountants in commerce and industry. We are therefore pursuing the TOPP initiative, it being the Training Outside Public Practice scheme to enable trainees to undertake their apprenticeship outside public practice. It is encouraging that the Institute is making progress securing the collaboration of the bigger private sector enterprises and I do hope we can launch this scheme in the near future. I am sure Dr Nombembe’s visit will prove highly informative and supportive in moving forward in this initiative.
I do treasure my membership no 2 of the Swaziland Institute of Accountants, and the happy memories of my time in professional practice. That was firstly with Coopers and Lybrand, then in my own practice and finally, after inviting Price Waterhouse to Swaziland, as a partner in that firm, leaving for a full-time political career before the firm’s subsequent international merger into Pricewaterhouse- Coopers. I would have been very disappointed to miss this year’s Institute Dinner, though I only just made it, having returned only yesterday from official duties in New York.
Had I been unable to return in time I could, I suppose, have suggested a conference call adaptation in order to be with you. With a view of Wall Street through the rear window and surrounded by computer hardware and the latest accounting and auditing guidelines, this would perhaps reinforce the embrace of modern technology, already seen in the Institute’s domestic initiatives. These include the successful introduction of computer–based examinations for the Association of Accounting Technicians. This is a remarkable upgrade to previous arrangements, achieving first world standard examinations administration through candidates sitting their test at the computer at the Institute’s headquarters, and downloading their results shortly afterwards. No longer the pen quivering in the hand as the examinee tries to complete page 15 of the answer sheets before the deadline, and then waiting weeks for the results.
An auditor’s working life is mostly about money which makes this evening function a fitting time for me to announce the steps being taken in two important national initiatives that focus on the availability and use of money in our economy for investment that benefits all of our people. They are, firstly, the growing of the capital markets to absorb and utilize money for national development, and secondly, the objectives and imminent launch of the National Social Security Authority.
The recent Capital Markets Indaba enabled all the stakeholders to acknowledge the importance of capital markets in the development of an economy, enabling the savings of individuals and institutions to be used by businesses and governments. The requirement under the Securities Act of 2010 for unit trusts and mutual funds, to keep at least 50% of their liquid resources within Swaziland, is now being extended to all insurance and retirement funds, through an amendment to both the Retirement Funds Act 2005 and the Insurance Funds Act 2005,
Regulations will also be drawn up that articulate clearly the investments that meet the definition of “local,” in order to limit the allocation of the domestic 50% into the money markets in the form of fixed deposits – an investment that has hitherto given rise to the banks placing the funds outside the country.
Having a substantial increase in locally available funds represents a valuable new stimulus to the development of more densely populated capital markets, with a large number of investments to choose from. But in the case of the secondary market – the Swaziland Stock Exchange (SSX) - this requires a market of willing buyers and sellers. Only seven equities are currently quoted on the SSX, and at least four of those experienced no trading, according to the most recent quarterly bulletin from our Financial Services Regulatory Authority (FSRA).
Creating the growth in capital markets to meet the additional demand for local investment is the immediate challenge, with the FSRA and SSX leading other stakeholders to produce proposals, assisted by the computerization of the SSX for greater speed and protection. They should not overlook the potential investment opportunity presented by the public:private partnership (PPP). Government recently set out its PPP policy. Investors should understand that the need for a partnership contract to cover any subsequent contingency is no different from the approach one should take when drawing up an ante-nuptial agreement.
The second, and equally substantial initiative, addresses directly an area of considerable ongoing concern regarding the consolidation and optimal use of social protection funds and resultant end-benefit for the people of our country.
The initiative underway, and at a very busy discussion stage, is the establishment of the National Social Security Authority (NSSA). Creation of this coordination and oversight agency will not only bring together under one roof, so to speak, a number of public funds, but will also substantially reduce existing administrative costs and release a considerable amount of funds for the build-up of enhanced benefits to the general public.
The five pillars – in the form of funds – under the overall control of the new NSSA, will be the National Health Insurance Fund, the National Pension Fund, Workmens’ Compensation Insurance Fund, Motor Vehicle Accident Fund, and the Social Welfare Fund. These will absorb, into the appropriate fund, a range of existing funds which include the Swaziland National Provident Fund, and elderly, disability and orphans and vulnerable children grants. The 30/30/30/10 per cent operational strategy will be followed, with the three 30 per cents defining maximum administration costs, target benefit payments and projected domestic growth investments respectively, and the 10 per cent will be allocated to reserves.
This is an exciting rationalization initiative that will, as time goes by, generate a significant increase in funds. While at the discussion stage at the present time, the modus operandi has been drafted, and we can expect the respective legislation to be in place within one year. We thank our generous development partners, the European Union, for the ongoing technical assistance in our new development pathway for improved social protection.
I have spoken at some length on that essential medium of exchange – money. Ensuring integrity in the custody and control of public money continues to be a highly challenging process. To investigate alleged misuses of such resources we have the Anti-Corruption Commission (ACC) in place. Allow me to vehemently repudiate the repeated public allegation that the ACC is not working. It is working. There are many cases for which charges have been drawn up and it is merely space on the High Court Roll that is holding us up. Cabinet has recently offered the Judiciary the opportunity to engage two additional High Court judges. I await a reply from that arm of Government in order to secure the assurance that justice further delayed will not amount to justice denied.
Ladies and Gentlemen, I am sure it is clear how important to me is my attendance at this annual Dinner. I thank you for your patience as I raise these very important issues. It has been most enjoyable meeting former colleagues and other Institute members – and their spouses of course – but also reminding members of the valuable role that they play in our economy. I also wish to extend my warmest congratulations to those students being awarded their certificates in respect of the recent ACCA and SAICA Board examinations.
Thank you for inviting me.