Mbabane: Government's failure to implement the Southern Africa Development Community (SADC) procurement procedure has been blamed for rife corruption tendencies in the public tendering process. Federation of Swazi Business Community (FESBC) Vice President Hezekiel Mabuza said failure by government to adopt the procedure soon would be an expense to the country's SMEs as they were losing money. He said this system was the best in the region as it provided clear-cut and precise information for a supplier.
Mabuza said such a procedure rendered no additional costs to those applying for government and donor funded tenders. He said SADC introduced this procedure 20 years ago and they (FESBC) only learnt of it about two to three years ago.
"We got to know of this after local SMEs were not awarded multi-million emalangeni tenders for some project. We decided to research on the circumstances leading to their failure and one of the findings was that they did not comply with the system yet other countries did. The system stipulates that a business applying for a tender includes, amongst other things, a picture of their organisation (the vision, mission statement and objectives) and personnel in the company," he said.
Mabuza said even though the ministry of finance had consultations with other ministries on the SADC procurement procedure, seemingly nothing tangible has come out of it. He said after the consultations, government was supposed to implement the system. Mabuza said the ministry of finance was having difficulties in implementing the procedure as it was supposed to be effected around April. He said capacity building with all ministries was conducted where officers were informed on what the procedure articulated.
"Government must make the reforms for the system as it will help us root out corrupt tendencies. The current process is susceptible to corruption," the FESBC head said.
'SADC procurement system can address job issues'
If Swaziland can implement the SADC procurement procedure, the rate of employment in the country can improve, says the Vice President Hezekiel Mabuza. He said this new procedure for procurement could be a contract stretching for a number of years.
"This system addresses a number of things like the issue of unemployment in a company as it lasts up to 12 years and people are guaranteed of secure jobs. It's sad that government is advocating for the creation of jobs yet it fails to address such issues to help in this endeavour," he said. Mabuza said when the system was being implemented, each ministry would compile a budget of all services that would be tendered for and totaled in the annual national budget.
Govt officials reject invoices with VAT
FESBC claims that government officials are negative on the newly introduced value added tax (VAT) and oblivious of it. The executive of the indigenous business community claims that so serious was the situation that the officials do not know which items to charge VAT on and which ones were exempt from this taxation. FESBC Vice President Hezekiel Mabuza said the officials did not know that there must be a VAT provision on their invoices.
"If you send an invoice with VAT, it is returned. This is also one issue that must be addressed immediately. VAT can kill businesses if not properly implemented, an enterprise can at times pay more returns at times less, and this is according to research we embarked on. "To continue capacitating our members and those who are not on this tax system, we will before the end of this month have workshops in Mbabane and Manzini," he said.
Mabuza said FESBC took a synopsis on what happened in the South African business sector, especially small and medium enterprises (SMEs) when VAT was introduced. He said even in South Africa, the VAT was a difficult task as SMEs also encountered a number of challenges. He said considering the numerous complaints by the country's business people as regards VAT, they had roped-in an expert, Dr John W. Hendrikse to assist them.
Mabuza said they welcomed VAT because as a country, it could not necessarily survive without it.
"Legislations around VAT are tough, if you do not comply there are heavy penalties. We therefore invite the business community to the workshops so that they benefit. VAT is not an expense, we were in sales tax now it is VAT, the figures are the same. We need inspections of businesses by government for VAT as some charge on exempted items," he said.
Adding, FESBC Mbabane Chairman Johannes Manikela said there was no instrument that indicated VAT on government invoices yet the Swaziland Revenue Authority (SRA) wanted it. He said if a supplier failed to charge VAT on a supplied item, he/she (supplier) must pay from his/her own pocket
'Cheque limitations part of SADC payments integration'
Standard Bank Managing Director Tineyi Mawocha says the move of not processing payments of cheques for E500 000 and above is part of working towards payments integration in the Southern Africa Development Community (SADC) region. He said cheques were easier to tamper with than electronic payments.
"Unless the cheques are imaged, they may also get lost. Also, cheques take a longer process to clear than electronic transfers. Standard Bank has frustrated a number of fraud attempts with cheques," he said.
Mawocha said as President of the Federation of Swaziland Employers and Chamber of Commerce (FSE&CC), what the regulators and indeed banks were trying to achieve was highly appreciated. He said with rapid developments in technology, Swaziland should embrace change so that it was not left behind. Mawocha said clearly the phased approach selected by the financial services sector was appreciated. The Central Bank of Swaziland (CBS), in conjunction with all the commercial banks in the country, announced that the cheque limit has been reduced from E1 million to a maximum of E500 000. This would be with effect from the beginning of July, all payments made by cheque for E500 000 and above will no longer be processed.
In a statement issued in the press, the CBS said this move was aimed at managing financial risk in the national payment system in the country. The bank, in collaboration with First National Bank (FNB), Standard Bank, Nedbank, SwaziBank and Swaziland Building Society (SBS) said the cheque elimination system would further reduce risks associated with cheque payments.
"In this regard, all payments made by cheque for E500 000 and above will not be processed for clearing and settlement in the banking sector with effect from July 1, 2012. The business community and individuals are advised to make all payments of E500 000 and above through transfer systems provided by the banks," reads the statement.
The CBS further explained that electronic funds transfers would continue to serve as alternative payment channels that come with enhanced safety and speed in processing transfer of funds.