SWAZIBANK FEATURE

FEATUR

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S W A Z I B A N K

S waziland is a country long stalked and now engulfed by the shadows of fi nancial crisis. Africa’s last absolute monarchy, with a mostly impoverished population of one and a quarter million is in fi nancial ruin; running out of cash

for salaries, health care and fuel. Seventy per cent of the population lives on the

equivalent of R16 or less a day and one in four Swazis aged 15 to 49 is infected with HIV/AIDS; the highest prevalence in the world.

Struggling to stay solvent after losing last year 60 percent of its revenues from a regional customs union - the government’s

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Swaziland continues to sink in a financial and social crisis seemingly without end. Could

the reform-mandated SwaziBank be a key to stability and recovery? Its dynamic MD Stanley Matsebula believes so, as South Africa Magazine reports.By Colin Chinery

S W A Z I B A N Kthe saviour for a country in crisis?

S waziland is a country long stalked and now engulfed by the shadows of fi nancial crisis. Africa’s last absolute monarchy, with a mostly impoverished population of one and a quarter million is in fi nancial ruin; running out of cash

for salaries, health care and fuel. Seventy per cent of the population lives on the

equivalent of R16 or less a day and one in four Swazis aged 15 to 49 is infected with HIV/AIDS; the highest prevalence in the world.

Struggling to stay solvent after losing last year 60 percent of its revenues from a regional customs union - the government’s


Swaziland continues to sink in a financial and social crisis seemingly without end. Could

the reform-mandated SwaziBank be a key SwaziBank be a key SwaziBankto stability and recovery? Its dynamic MD Stanley Matsebula believes so, as South Africa Magazine reports.By Colin Chinery

2 www.southafricamag.com

main source of income – Swaziland’s deepening fi nancial crisis has triggered a series of unprecedented demonstrations by public servants over salary cuts. Schools have shut down and the country’s only university failed to reopen for the New Year owing to lack of funds.

Echoes of Greece? Greece’s government debt, at 155 percent of gross domestic product, is at unsustainable levels. In Swaziland’s case the equivalent number is a humble 20 percent. Indebtedness is not Swaziland’s principal problem. It has a cash-fl ow crisis and been unable to secure domestic or foreign funding to meet the shortfall.

The Government’s fi scal position has been spurred by stagnant economic growth, a vast pork barrel public sector wage bill and reckless expenditure. According to Minister of Finance, Majozi Sithole, each year the country loses nearly double the annual social services budget to corruption.

Earlier this year Swaziland asked South Africa for a loan after the African Development Bank turned down its plea for help. With another neighbour - Zimbabwe - in economic crisis, Pretoria agreed, fearful no doubt of Swaziland’s imminent collapse. But Swaziland has yet to sign the $368-million loan

agreement. Baulking at the pre-requisite internal reforms demanded – a roadblock to an International Monetary Fund bail out – seems the most probable explanation.

This is the scenario facing SwaziBank, pivotal player in the economy and major driver and potential saviour of national recovery.

SwaziBank has a Government mandate to steer the development of the economy at all costs, including promotion and development of the economy and maximum participation of the citizens of the country. Domestic savings and resources for development are to be mobilised and key sectors such as industry, agriculture, mining and tourism backed. The mandate is exclusive to SwaziBank and no other bank in the world has it, says Managing Director Stanley Matsebula.

SwaziBank is preparing to pump in E500 million into the country’s economy, mobilising more resources from its cooperating partners in and out of the country.

“We are focusing on job creation projects, value adding projects and so on, which will come in handy to government as these will serve as an extended revenue base,” says Matsebula. “The bank has a huge base of big companies doing business with it. During this cash flow crisis

SwaziBank FEATURE

SwaziBank has demonstrated

what an enlightened

public/private partnership can achieve in developing

African economies, as

many other banks are

primarily only interested in

profits and not the people

Stanley Matsebula, MD SwaziBank

main source of income – Swaziland’s deepening fi nancial crisis has triggered a series of unprecedented demonstrations by public servants over salary cuts. Schools have shut down and the country’s only university failed to reopen for the New Year owing to lack of funds.

Echoes of Greece? Greece’s government debt, at 155 percent of gross domestic product, is at unsustainable levels. In Swaziland’s case the equivalent number is a humble 20 percent. Indebtedness is not Swaziland’s principal problem. It has a cash-fl ow crisis and been unable to secure domestic or foreign funding to meet the shortfall.

The Government’s fi scal position has been spurred by stagnant economic growth, a vast pork barrel public sector wage bill and reckless expenditure. According to Minister of Finance, Majozi Sithole, each year the country loses nearly double the annual social services budget to corruption.

Earlier this year Swaziland asked South Africa for a loan after the African Development Bank turned down its plea for help. With another neighbour - Zimbabwe - in economic crisis, Pretoria agreed, fearful no doubt of Swaziland’s imminent collapse. But Swaziland has yet to sign the $368-million loan

agreement. Baulking at the pre-requisite internal reforms demanded – a roadblock to an International Monetary Fund bail out – seems the most probable explanation.

This is the scenario facing SwaziBank, pivotal player in the economy and major driver and potential saviour of national recovery.

SwaziBank has a Government mandate to steer the development of the economy at all costs, including promotion and development of the economy and maximum participation of the citizens of the country. Domestic savings and resources for development are to be mobilised and key sectors such as industry, agriculture, mining and tourism backed. The mandate is exclusive to SwaziBank and no other bank in the world has it, says Managing Director Stanley Matsebula.

SwaziBank is preparing to pump in E500 million into the country’s economy, mobilising more resources from its cooperating partners in and out of the country.

“We are focusing on job creation projects, value adding projects and so on, which will come in handy to government as these will serve as an extended revenue base,” says Matsebula. “The bank has a huge base of big companies doing business with it. During this cash flow crisis

SwaziBank FEATURE

SwaziBank has SwaziBank has demonstrated

what an enlightened

public/private partnership can achieve in developing

African economies, as

many other banks are

primarily only interested in

profits and not the people

Stanley Matsebula, MD Stanley Matsebula, MD SwaziBank

3www.southafricamag.com

in the country we have managed to keep many of them afloat rather than allowing them to foreclose.

“SwaziBank has demonstrated what an enlightened public/ private partnership can achieve in developing African economies, as many other banks are primarily only interested in profi ts and not the people from whom they derive those profi ts.”

The Government is SwaziBank’s sole shareholder, but plans for partial privatisation are fast moving to fruition. This was one of the main issues the IMF wanted to have sorted out during its last visit to the country. The IMF says it will assess progress when it returns, believing that privatisation could help government generate revenue. The change of share structure at SwaziBank is expected to open fl oodgates for the privatisation of other parastatals.

Swaziland Prime Minister Sibusiso Dlamini says partial privatisation is important to accelerate completion. “This partnership between the private sector and government will provide improved technology and fi nancial products, as well as an injection of cash and the effi cient and competitive ethos and techniques of the private sector. As we look forward to opening that new page in SwaziBank’s evolution, we trust that the new infusion of the private sector dynamism and innovation will also be of conspicuous benefi t to the development arm of the bank.”

Stanley Matsebula agrees. “Gearing itself to an even bigger role, especially with the experience we have had with the Government’s fi nancial problems means SwaziBank should take a more active role. Many businesses depend on Government contracts for survival, and the Bank could maybe assist some of them to look beyond, diversify, and lessen this dependency. We are working on this and will focus on it increasingly in the future.

“What differentiates us from other banks is we offer long-term fi nancing across all sectors, and are more interested in development fi nance, job creation and value-adding projects. And this is what the national economy needs. Other banks tend to be more short-term focused.”

Matsebula has been the major force behind the dramatic turnaround of the SwaziBank from a loss-making institution - at one stage near to closure. Under his astute leadership it has made a dramatic turnaround, and continues to grow at a remarkable rate and achieving unprecedented profi tability.

Despite the prevailing economic environment, SwaziBank has managed to increase its deposits substantially, recording deposits for the fi scal year ending last March of E934,064 million (the Swaziland currency is pegged to the Rand) compared with E811,529 million in the previous year.

“Our deposits were magnifi cent, particularly given that the economy is not performing well. However, we’ve been growing our deposits far above infl ation, which is a great achievement,” says Stanley Matsebula.

“When we took over the Bank I realised public confi dence in the bank was at its lowest ebb and

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His Majesty King Mswati III poses

with SwaziBank Cup soccer champions

immediately after the fi nals.

Metropolitan Life Swaziland is a subsidiary of MMI Holdings Limited group, a listed entity created through the recent merger between Momentum and Metropolitan.

The policy of the international operations of MMI Holdings Limited, Metropolitan International, is to seek in�uential local partners who will take a meaningful shareholding in the business.

Metropolitan Life Swaziland subsequently entered into a strategic partnership with Swazi Bank where the latter purchased a 33% stake in the life insurer. Swazi Bank brings complementary strengths to the partnership including, knowledge and experience in the local market and an established network of relationships with key role players that supports business growth.

Metropolitan’s core values focus on people, trust and performance and similar themes exist in the way Swazi Bank conducts its business.

METROPOLITAN LIFE SWAZILAND’S PARTNERSHIP

WITH SWAZI BANK

so our fi rst task was to restore it. People are now starting to feel that this is a bank for the future. In 2007 when the credit crunch struck the world we found that the big corporates needed medium and long-term fi nance and we came in handy for them to provide it. In the beginning we did not have a lot of these big corporates, but now many of them are doing business with us.”

“We provide exceptional customer service and identify the needs of our customers with whom we have exceptional relationships. Many have been with the bank since it was fi rst established. “

With a Masters Degree in Applied Economics from the American University, Washington D.C., majoring in money and banking, he has held senior management positions in and outside Swaziland. Before his appointment as Managing Director of SwaziBank in 2000, he worked for different organizations in Swaziland and in South Africa, including the Development Bank of South Africa.

When Nelson Mandela’s Government took power, Matsebula was seconded to the President’s offi ce as Financial and Economic Advisor responsible for the transfer of funds all over South Africa for reconstruction and development programmes. Now his sights are on rescuing and then growing the Swaziland economy.

“As a Bank we want to see more internal and external investments to ensure more jobs and more enterprises set up. New industries will also bring more revenue to the Government, but at the same time the Government in the short and medium term needs to succeed in reducing expenditure in line with current revenue. In the long-run the Government should look at its revenue expansion, creating more jobs, increased investment in Swaziland and perhaps bringing a better image for the country.”

What would he say to potential investors? “That they should not look at the negative publicity from which the country is currently suffering. Instead focus on the medium and long-term prospects for Swaziland… and these are very good and rosy. Swaziland is very good for agriculture, mining and exploration – much of which awaits exploitation - and is a very attractive country for tourism. It’s very important we work with potential investors and then we can set about removing obstacles, which the country is more than ready to do away with.

“The SwaziBank will continue to play centre stage in the economy. We know we are managing a very diffi cult mandate where we combine development and commercial banking, but one assists the other and we shall play a major role looking into the future.

“Our challenge is to make sure we provide development fi nancing in a sustainable way, assist in job creation and create value-adding in the economy. It is a role and an opportunity to which we are committed.” END

SwaziBank FEATURE

South Africa Magazine, Suite 9 and 10, The Royal, Bank Plain, Norwich, Norfolk, UK. NR2 4SF

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Mlunguziwendlovu BuildingGwamile StreetMbabaneKingdom of Swaziland

PO Box 336 Mbabane H100

Tel: +268 409 5000Fax: +268 404 2550Email: [email protected]

www.swazibank.sz

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