James Hall ‘Swazi Bank is a reverse Robin Hood, it steals from the poor, and gives to the rich,” says Amos Mhlanga*, a disgruntled farmer who unsuccessfully sought a loan from the national bank to plant cotton. The nation’s only indigenous bank, the Swaziland Development and Savings Bank, was set up in the 1970s by King Sobhuza, the founder of the modern Swazi state. Its intention was to provide capital to people like Mhlanga, to improve the lives of peasant farmers on communal Swazi national land. “It was a good idea, because no other financial institution would extend loans to them, because they did not own their land,” explains Martin Dlamini, governor of the Central Bank of Swaziland, which is supervising the Swazi Bank’s restructuring. It was not long after its founding that the “looting of Swazi bank” started, as described by the Times of Swaziland, a long-time critic of its operations. Senior princes, Cabinet ministers and people with royal connections were granted multimillion-rand loans. These were not the clients King Sobhuza had in mind when he envisioned the development bank. The late journalist James Dlamini recalled a blustering prince who burst into a bank board meeting and demanded to be shown the vault. He wanted to withdraw “some of my Daddy’s money”! Apparently, he and others like him were given the keys. By the early 1990s the bank was insolvent. In a panic, management sought to retrieve funds, but not by calling in outstanding loans from high officials. Rather, bands of thuggish collectors commenced a “grab a cow” offensive in pockets of rural poverty, swooping down on homesteads and making off with anything they could carry. The principal defaulters, who still owe millions, were spared such treatment. When asked last year why he was not repaying his R3-million loan, Chief Dambuza Lukhele, a former agriculture minister, told a reporter: “Why should I be the only one?” Last year Minister of Finance John Carmichael pleaded with Parliament for an additional R120-million for the bank’s restructuring, on top of about R300-million already spent by treasury on the exercise. It is apparent to many Swazis that the officials who were granted up to R65-million apiece from the development bank never considered these to be loans that should be repaid, but rather gifts that came with privilege.
“They felt entitled,” says Manzini businesswoman Maud Dlamini. “Like the luxury cars with drivers and the little flags on the bonnet, like the overseas trips, they took the bank money to be one of the perks of office or position.” Peasant farmers like Mhlanga, who are now being turned down for loans, are not being told by bank officers that cash is in short supply because of the big loan defaulters. They are told the villain is Parliament. Swaziland’s Parliament is usually so docile when it comes to acceding to Cabinet requests that some MPs have complained they are little more than rubber stamps. But on the issue of Swazi Bank, parliamentarians have developed a stubbornness. MPs are saying no to the R120-million the finance ministry wants to continue the bank’s restructuring, and demanding that the big loan defaulters repay first.
Next week a Parliament select committee looking into bank operations will table its report. The committee was set up when it became apparent that the Ministry of Finance would not show MPs its strategic plan to salvage the bank, leaving some wondering if the ministry has one. “Swazi Bank will never close,” said one of the bank’s workers. “The authorities will never permit it, as a matter of national pride.” Says Dlamini: “Corruption comes to African nations differently. Swaziland is small and poor and there aren’t many opportunities, like Nigeria. But Swazi Bank was one opportunity, and the fat cats fed on it like mosquitoes on blood pudding.” Parliament may decide next week whether to give the finance ministry the money it requires to revive King Sobhuza’s dream, and provide capital to farmers like Mhlanga. Or they may insist that the will be found to get the chief loan defaulters to pay what they owe, putting the responsibility on them rather than on overburdened Swazi taxpayers. * Not his real name