5 March 2018

Swaziland: Building Hotel a Budget Priority

analysis

The Swaziland Government is to spend E1.5bn (US$125m) this year building a conference centre and five-star hotel to host the African Union summit in 2020 that will last eight days.

This is more than the sum allocated to the Ministry of Agriculture (E1.4bn) or the Ministry of Defence (E1.15bn). It is the biggest single capital project in Swaziland's budget this year. Total capital spending is set at E5.6bn.

It comes as the Finance Minister Martin Dlamini announced Value Added Tax (VAT) would be increased by 1 percent to 15 percent and a review would be made of the VAT Act to allow taxation of electricity for the first time. Commentators within Swaziland say this will have a huge effect on the poor. Seven in ten of the estimated 1.1 million population have incomes less than the equivalent of US$2 per day.

The hotel and conference centre is another project supported by King Mswati III, who rules Swaziland as sub-Saharan Africa's last absolute monarch. He believes such buildings add to the prestige of his kingdom and will make it a First World nation by 2022. He already has an airport named in his honour that cost an estimated E2.5bn to build but only has one airline using it. King Mswati III International Airport has been described as a 'white elephant' and a 'vanity project' for the King.

Dlamini in his budget speech on Thursday (1 March 2018) said the government would only spend on 'the most critical expenditure items' this year. He acknowledged, 'Government sending continues to outpace its ability to raise enough revenues resulting in cash flow challenges and accumulation of arrears.'

The hotel and convention centre - popularly known as ICCFISH - is under construction at Ezulwini. In 2013 when the plan for the development was announced the cost was estimated at E1bn. Completion of the work was expected by 2016.

In September 2017 it was reported that King Mswati had visited Las Vegas in the United States to try to get the Caesars Palace company (famous for its hotel and casino) to manage the ICCFISH.

'The King's Office Correspondent', writing at the time in the Swazi Observer, a newspaper in effect owned by the King, reported Caesars Palace management had promised to submit a proposal on what it would cost to manage the ICC and hotel.

In 2013, when the plan for building was announced the Swazi Observer reported, 'The scope of the project include a facility of international standards with a Swazi theme, a facility to handle up to 4,500 delegates at a time, trade centre for high value exhibition, a secure chamber room to take 53 heads of state, 3,500 seat banqueting hall, restaurants, 1,500 seat theatre, and special holding rooms.'

The African Union summit is held twice a year in January and June but by tradition the first meeting is held in Addis Ababa, Ethiopia.

In 2016, King Mswati took about E40m of public funds to host a lavish Southern African Development Community (SADC) Heads of State summit at a time when his government was so poor it could release only E22 million of the E305 million earmarked for drought relief in that year's national budget.

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