18 March 2018

Swaziland: Foreign Banks 'Might Quit Swaziland'

Foreign-owned banks in Swaziland might leave the kingdom if a proposed new levy announced by the Minister of Finance Martin Dlamini goes ahead.

Banks will be expected to pay 2.5 percent of their annual income to the government of King Mswati III, sub-Saharan Africa's last absolute monarch.

Standard Bank Chief Executive Mvuselelo Fakudze told a meeting at Gigi's Restaurant, Ezulwini on Monday (12 March 2018) banks had parent companies in other countries which would close their Swaziland operations if profits fell.

The Swazi Observer, a newspaper in effect owned by King Mswati, reported that Fakudze said, 'Government may be forcing investors which are the parent companies of most of the banks we have in Swaziland to review their reason of being in the country. With Swaziland being a small economy, the percentage of what we give back to our parent companies is far less than what subsidiaries in other countries are offering, so now the bank revenue levy will make us even less profitable.'

He said banks had not been consulted on the new levy.

The Swaziland Government owns 25 percent of the shares in Standard Bank Swaziland Ltd. There are three foreign-owned banks in the kingdom: Standard Bank, Nedbank and First National. The government-owned Swaziland Development and Savings Bank went bankrupt due to millions of dollars of unpaid loans in June 1995. Today, the kingdom's only local bank is SwaziBank.

The total assets of Swazi banks is estimated by the United States Bureau of Economic and Business Affairs to be approximately E15.4 billion (US$1.2 billion).

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