SA loan to Swaziland in the balance

As protests intensify against the rule of King Mswati III, the Swazi government’s spending plans are attracting increased scrutiny of his secretive business empire.

The Mail & Guardian reported last week that Majozi Sithole, the Swazi finance minister, had disclosed that R1-billion of the country’s planned R2.4-billion loan from South Africa would be spent on construction projects, including those linked to the controversial new Sikhuphe airport.

A key beneficiary of the planned spending will be Inyatsi Construction, a Swazi-based company that is widely rumoured to be co-owned by Swazi royal interests, though this has been denied.

Differing accounts of share transactions involving the company have deepened suspicion.

Until October 2010, Ndumiso Mamba, the former chief executive of the royal investment trust, Tibiyo takaNgwane, was the chairperson of Inyatsi, with a shareholding of roughly one-third.

Mamba, suspected of holding the shares as a proxy, gave up his holdings unexpectedly after he was caught hiding under the bed of one of Mswati’s wives, Nothando Dube, in July last year.

Mamba, who had been serving as justice minister, made his first public appearance two months after the scandal broke to announce he had sold his shares.

He did not explain why he had done so in a year in which the company nearly doubled its turnover, mainly due to government contracts.

Swazi entrepreneur Moses Mota told the Swazi media he had bought Mamba’s shares, taking his own holdings to 56%, with 15% being in the hands of management and the remainder owned by a Brian Persson.

However the Inyatsi website lists only two shareholders, Persson and Mota, each with 50%.

‘No interests’

Inyatsi director David Roberts said: “We have no relationship at all with anyone from the government or the royal family. The king has no interests whatsoever.

“We have lost a contract due to a breakdown of relationship with one of the ex-shareholders, Ndumiso Mamba, who once worked for Tibiyo takaNgwane.”

Among ongoing contracts, Inyatsi lists the building of the Nelspruit water treatment works for the Mbombela municipality, but current projects worth more than R1-billion relate to the airport, widely considered an unaffordable white elephant.

Inyatsi recently expanded into other countries in Southern Africa and, in December 2010, bought out Billion Construction, formerly part of Siza Ngebulana’s Billion Group.

According to Nontutuzelo Nogaga, the managing director of Inyatsi Construction South Africa, there is no remaining relationship with Billion, where she previously served as non-executive director. “To my knowledge, there’s no connection between the Swazi King and Inyatsi,” she said.

Two other private entities are allegedly closely tied to the royal family’s interests.
One is African Alliance, which a number of Swazi sources have claimed manages some of Mswati’s investments.

The rumours were fuelled by last week’s publication of a confidential cable from the United States ambassador in Mbabane, Earl Irving.

The cable, publicised by WikiLeaks, records a meeting Irving held in January 2010 with Swazi activist and businessman Mandla Hlatshwayo, also a former adviser to Mswati and former chief executive of the Ubombo Sugar company, in which Tibiyo has a 40% interest.

The cable says: “Hlatshwayo stated that the king uses the investment company African Alliance to move his money around internationally, and indicated that chief executive Stephen Ginindza is quite influential and involved in all of the king’s international transactions.”

Hlatshwayo declined to comment this week, but African Alliance denied the claim.

African Alliance

The company describes itself as a pan-African investment banking group, which started in Swaziland but has expanded to most parts of Africa.

Its website says the shares are 100% owned by the family trust of Antonio “Tony” de Castro, listed as a Portuguese citizen, but who grew up in Southern Africa and worked for Brait Merchant Bank in the 1990s.

Ginindza, who Swazi sources describe as Mswati’s financial adviser, is listed as a “group partner” of African Alliance.

He also chairs the Swazi Electricity Board, whose pension fund was one of the first investors in African Alliance when it was formed in 1992.

Responding to questions, African Alliance said: “His Majesty has no direct or indirect equity in African Alliance, nor has he ever had.

“African Alliance is not a bank in Swaziland. It is not authorised to move or manage money for anyone or institution, including His Majesty, outside Swaziland. External transactions are authorised only by the central bank for commercial banks. We are not a bank.”

However, reports indicate that Ginindza and African Alliance are in the advanced stages of opening a boutique bank in Swaziland called New Era Bank.

Ginindza is also said to be in pole position, partnering with Peermont Global in the bid to purchase shares in the Swazi Spa hotels being sold by Sun International.

Tibiyo owns almost 40% of the Swazi hotel group.

MTN Swaziland

Ginindza also allegedly played a role in Mswati’s purchase of shares in mobile operator MTN Swaziland.

A leaked US cable also deals with the king’s influence on Swazi MTN. In October 2009, the Mbabane embassy sent a report about the expulsion of MTN Swaziland chief executive Tebogo Mogapi, noting that: “Mswati’s business interests appear to have caused the ouster of MTN CEO Tebogo Mogapi and halted parastatal Swaziland Post and Telecommunications Corporation (SPTC) from selling the MTN shares it owns.”

Mswati bought 6% of the company in 2004 in a deal allegedly brokered by Ginindza.

Ginindza denied the allegations. “The King works with any subject as per Swazi culture. He operates with various advisory bodies representative of all members of society. I have not been involved in the king’s transaction.

“His Majesty is at liberty to utilise any member of society for any assignment that may be required from time to time as per the norm of Swazi culture.

“I am a fulltime employee of the African Alliance Group,” he said.

Unhappiness with the MTN monopoly led the SPTC to seek to sell its shareholding to raise money for a competing Next Generation Networks (NGN) cellphone project.

The cable said: “Industry and press observers privately indicated that the king, who already owns many MTN shares, had wanted to purchase the MTN shares himself at a cheaper price than the buyer, MTN, was offering SPTC.

“Government officials later prevented the sale and recently did not renew the work permit for CEO Mogapi, a South African citizen, apparently in retaliation for his role in the transaction, as well as the CEO’s reported decision to oppose government efforts to use the MTN network for electronic surveillance on political dissidents.”

MTN declined to comment.

Bilateral talks about loan come to grinding halt

South African jitters about accountability for the R2.4-billion bailout are growing, but King Mswati III and other traditionalists are claiming that they reject its political-reform conditions.

South Africa announced on August 3 that it would lend the money to its cash-strapped neighbour, but more than a month later, nothing has been released and Swaziland is said to be tapping other sources, including the Kuwaiti and Qatari monarchies, for support.

This week the South African treasury said Swaziland had not yet signed the memorandum of understanding on the loan and no money would be transferred until the paperwork was complete.

Among the traditionalists who are agitating against the loan is Prince Mahlaba, a senior member of Liqoqo, Mswati’s advisory council, who told the Times of Swaziland this week that the country’s political system, the Tinkhundla, was not for sale.

“We won’t die even if we don’t get the money. We shall survive because of God. God gave us Tinkhundla and we won’t trade it for R2.4-billion,” Mahlaba said.

He was quoted as saying that democracy was"nonsense” and that “Tinkhundla and the monarchy should be praised for preserving peace”.

Mandla Hlatshwayo, a founding member of the Swaziland Coalition of Concerned Civic Organisations and former royal adviser, said this week that Mswati and the traditionalists were “having second thoughts about how prepared he is to be subjected to conditions of democracy and the unbanning of political parties. That’s the source of this constipation.”

“We know they are looking around for alternative sources of money.

“The prime minister has just been to Qatar. We understand there have been discussions with Saudia Arabia and Kuwait as well, and now talks are starting with Equatorial Guinea.”

Solly Mapaila, a senior member of the South African Communist Party and chair of the Johannesburg-based Swaziland Solidarity Network, said: “We know there are a lot of discussions behind the scenes about the conditions that South Africa wants to impose, which go beyond general economic and fiscal conditions.

“The Swazis feel that because they are paying back the money with interest, South Africa can’t impose conditions. But I’m pleased that our government seems to have listened to the intervention of local democracy movements.”

South Africa’s treasury has led the loan negotiations, but the political conditions and adherence to them will be overseen by the two countries’ foreign affairs ministries.

Swaziland’s Minister of Foreign Affairs and International Co-operation, Lutfo Dlamini, would not comment on the discussions, referring the M&G to the Swazi finance minister, Majozi Sithole, who did not return the M&G‘s calls.

Dlamini said that while he had attended bilateral meetings about the loan with his South African counterpart, he was not privy to the political requirements copied to media when the loan was announced last month and asked the M&G to email him the document.

This list included calls to “broaden the dialogue process to include all stakeholders and citizens of the Kingdom of Swaziland, agreeing on milestones and time-frames; allow the parties to the Swazi dialogue to determine appropriate reforms needed; and agree to ensure that the above processes take place in a conducive environment that is open and enjoys legitimacy amongst the people of Swaziland and the region”.

Dlamini also dismissed as irrelevant the Joint Bilateral Commission for Co-operation which the South African treasury and international relations department said would lead discussions about the “confidence-building pillar” of the loan.

“This is an old document, dating back to 2004,” Dlamini said. Meanwhile, President Jacob Zuma’s office has dismissed claims in the Swazi media that he is to travel to Swaziland to take part in next week’s meeting of the Smart Partnership, a national forum for dialogue on constitutional reform.

The forum, which bans the participation of any organised group, is rejected by Swaziland’s democracy movement.

Zuma’s spokesperson, Zanele Mngadi, denied that the president planned to travel to Swaziland in the near future.

The friendship between Zuma and Mswati is widely seen as the driving force behind the loan.

Public services in Swaziland are grinding to a halt because of the government’s revenue crisis.

This week, Médecins Sans Frontières warned that the country, which has the highest HIV infection rate in the world, is running low on antiretroviral and other drugs.—Louise Redvers

Swazi police deny brutalising protesters

Swazi police have denied claims of brutality during their crackdown on “the week of action” in the kingdom, in which they used teargas, water cannons and stun grenades against pro-democracy protesters and deported senior members of the Congress of South African Trade Unions (Cosatu) who had joined the demonstrations.

Protesters gathered in urban centres across the country to call for democratic reform and the lifting of the ban on political parties.

Students and union members allege they were charged and beaten by baton-wielding police. Several needed hospital treatment and one police officer was injured.

About 50 Cosatu members travelled to Swaziland to take part in protests organised by the Swaziland Democracy Campaign, which also staged solidarity protests in South Africa and the United Kingdom.

The demonstrations, which attracted several thousand mostly union members and students, were largely peaceful on Monday and Tuesday. But on Wednesday, the authorities took exception to an attempt by Cosatu’s second deputy president, Zingiswa Losi, and deputy international secretary Zanele Matebula, to address marchers in Siteki. After firing a stun grenade, police fought their way through the crowd and detained the unionists, who were questioned and deported back to South Africa.

Vincent Ncongwane, the general secretary of the Swaziland Federation of Labour, who was also in Siteki, said he was repeatedly kicked in the feet by police officers who surrounded him and two other senior unionists.

“They were hitting me with their batons and kicking my feet, making me fall over,” he said.

“They were calling the women I was with whores and other insults and they kept saying they didn’t want to arrest us because that would make trouble; instead they would just beat us.

“While we were being beaten, our colleague, Sphasha Dlamini, was also being attacked because she was trying to stop the police from getting to the Cosatu speakers.

“She was taken to hospital and when we went to see her, she was weak and could hardly talk because she was in so much pain.”

Swazi police spokeswoman Superintendent Wendy Hleta dismissed Ncongwane’s claims, saying: “There was no beating anywhere. I think they are just trying to create propaganda over this issue.”

Explaining why the Cosatu speakers were removed from the crowd, Hleta said: “We felt that the situation was getting out of proportion. They were not Swazis and have nothing to do with the issues that are touching Swazis. As a country, we can’t have people coming in and invading without us having explicit information about these invitations.”

Hleta said the officers were concerned that earlier in the week, people had been seen publicly burning kangas showing the face of King Mswati III, something she had not seen in Swaziland before.

“We do not understand why it has to come to Swaziland now, so maybe we thought this is something that has been brought by people from outside the country,” she said.

Cosatu said it was “appalled by the barbaric behaviour of the Swazi security forces, who continue to display utter contempt for the rights of the Swazi people to freely assemble and express their grievances about the state of affairs in their country.

“What is more worrying, is that these protests were perfectly legal, as they have been sanctioned by the courts in Swaziland.”

It called on Swazis “to remain stern in their determination to chart a democratic path for their country”.

This week’s marches were the latest in string of protests led by unions, which are challenging plans by the cash-strapped government to cut public-service salaries.—Louise Redvers



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The M&G Centre for Investigative Journalism, a non-profit initiative to develop investigative journalism in the public interest, produced this story. All views are ours. See www.amabhungane.co.za for all our stories, activities and sources of funding.

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