ESWATINI

The Kingdom of Eswatini (formerly known as Swaziland) is a unitary constitutional monarchy with a bicameral parliament composed of the House of Assembly and the Senate, elected for five years. The King is the head of the State and he appoints the prime minister, who is usually the majority party leader in the House following an election, for a maximum of two, five-year terms. The King also appoints the cabinet on the advice of the prime minister. The House of Assembly has 69 members, 59 of whom are elected by universal suffrage directly from tinkhundla centres and 10 are appointed by the King for a term of up to five years. The Senate is composed of 30 members, of whom 10 are elected by the House and 20 are appointed by the King.

The 2005 Constitution brought about significant reforms within the country’s local government, with the 2006 decentralisation policy describing the roles and responsibilities of the subnational government entities. The Constitution sets provisions for local governments and describes the system of government as “a democratic, participatory, tinkhundla-based system which emphasises devolution of state power from central government to inkhundla areas and individual merit as a basis for election or appointment to public office” (section 79, Chapter 7). The establishment of a tinkhundla system of government is the product of the government’s efforts to decentralise state power. An inkhundla is established by the King to serve for the election of members of the House (section 80). Elections take place in two phases: chiefdoms hold primary elections to nominate members at the tinkhundla level and each inkhundla elects a member to the House. The most recent local elections took place in 2017 and the next are scheduled for 2022. The urban local authorities are under the responsibility of the Ministry of Housing and Urban Development while the regions, tinkhundla and chiefdoms are located within the Ministry of Tinkhundla Administration and Development.

With respect to decentralisation, main legislative texts include the 1969 Urban Government Act, the 1978 Regional Councils Order and the 1978 Establishment of Parliament Order. The Urban Government Act established the urban areas of local government and currently functions as the main legal instrument that governs local government. The Regional Councils Order and the Establishment of Parliament Order both established local government in rural areas. In 2006, a national decentralisation policy was adopted and in 2015 a bill was presented to parliament which sought to replace the Urban Government Act. This new piece of legislation aims at promoting inclusive governance and it also grants the rural inkhundla legal status, however, the bill was not passed into law.

TERRITORIAL ORGANISATION
Municipal Level [1]	INTERMEDIATE LEVEL	REGIONAL LEVEL	TOTAL NUMBER OF SNGs (2021)
14 urban local authorities (2 city councils, 6 town councils and 6 town boards) 59 rural councils (singular ‘inkhundla’, plural ’tinkhundla‘)
Average municipal size: 15 892
73			73

[1] Name and number of sub-municipal entities:
385 chiefdoms (singular ‘umphakatsi’ plural ‘imiphakatsi)

OVERALL DESCRIPTION: The Eswatini local government system comprises four regions, namely Hhohho, which also serves as the administrative capital, Manzini, Shiselweni and Lubombo. The next level is the inkhundla (plural, tinkhundla). There are 59 tinkhundla and 14 urban councils, making 73 local governments. An inkhundla can be fully urban or partly urban and partly rural. Within an inkhundla, there can be chiefdoms and urban local authorities.

According to the Constitution, each region is directed by a regional administrator appointed by the King for a five-year period, and their term of office coincides with the term of parliament. A regional administrator serves as the political head of a region, appointed by the King (section 83 of the Constitution). In rural areas, the regions are led by the regional council made up of persons nominated by each inkhundla in that region. The regional councils play an advisory role and provide assistance to the regional administrator on issues relating to the social and economic development of the region (section 84). The regional administrator is supported by the regional secretary, who is the most senior civil servant in the regional council and is responsible for the overseeing of government business and the coordination of all regional development projects and programmes.

MUNICIPAL LEVEL: There are 14 urban councils. There are three distinctions of government in the urban areas: city councils, town councils and town boards. Decisions are made by full council based on recommendations from the various subcommittees. The town clerk is the chief advisor in each local authority council or town board. The status of town councils and town boards differs from the position and status of city councils. Town boards and town councils are managed by a partly elected and partly appointed board/council while city councils are administered by a fully elected council. Urban councils are divided into wards and councillors are elected from various wards based on the first-past-the-post-system. The councillors’ term of office is three years. The Urban Government Act grants urban council the power to assist in maintaining order and good governance within its jurisdictional area. The Act further creates provisions for the election of a mayor by the councillors from the council itself, the position is part-time and is limited to chairing council meetings and performing ceremonial functions.

There are 59 rural councils (known as ‘tinkhundla’). Beneath the tinkhundla (at sub-municipal level) are 385 chiefdoms (‘imiphakatsi’). Within each region there are between 87 and 101 chiefdoms and between 11 and 16 tinkhundla. An inkhundla is led by a bucopho, which in English is an inkhundla committee. The bucopho consists of persons elected from the chiefdoms or polling divisions within an inkhundla and operates under the chairmanship of the indvuna yeNkhundla who supervises the activities of the inkhundla. Leadership in the chiefdoms is hereditary. A chief is appointed in line with each chiefdom’s protocols and procedures but can only assume chieftaincy once blessed by the King.

Local government is mainly responsible for town planning, housing, roads, regulation of water and sanitation, refuse collection and disposal, environmental protection, parks and open spaces, cemeteries and crematoria and slaughterhouses. Local authorities have discretionary powers in the provision of sports and leisure facilities, welfare homes and tourism promotion. Urban and rural councils, share the same responsibilities, with the exceptions of the agriculture, forestry and fisheries sectors which are sole responsibility of urban councils.

Central and local spheres of government also have joint responsibilities, including housing, urban roads, electoral register, family welfare services, primary health care, environmental protection, parks and open spaces, cemeteries and crematoria and slaughterhouses, sports, and leisure facilities, welfare homes, tourism promotion, local economic development, and trade and industry.

Main responsibility sectors and sub-sectors
SECTORS AND SUB-SECTORS	Municipal level
1. General public services (administration)	Administrative services (electoral register)
2. Public order and safety
3. Economic affairs / transports	Road networks and facilities (urban roads); Support to local enterprises and entrepreneurship; Tourism; Commerce;Agriculture; Forestry; Fisheries (only urban councils)
4. Environment protection	Parks and green areas; Environmental protection; Waste management (collection, treatment and disposal of waste);Cemeteries and crematoria; Slaughterhouses
5. Housing and community amenities	Housing/Town planning (construction/renovation); Housing (management); Urban and land use planning; Urbanism
6. Health	Primary healthcare (medical centres)
7. Culture & Recreation	Sports and recreation; Libraries; Religious affairs
8. Education
9. Social Welfare	Support services for families

Scope of fiscal data: urban and rural local governments.

SNA 2008

Availability of fiscal data: Low

Quality/reliability of fiscal data: Low

GENERAL INTRODUCTION: The main legislative tools that outline and regulate local authorities’ fiscal framework are the Urban Government Act of 1969 and the Public Finance Management Act of 2010. The first Act makes provisions for the regulation of municipal funds for urban authorities and its principles are also used in rural authorities (section 9). The objective of the Public Finance Management Act is to ensure accountability, transparency and the management of the revenue, expenditure, assets and liabilities of various public institutions including local government authorities.

Urban municipalities in Eswatini hold revenue-raising and budget-setting powers whilst rural councils (tinkhundla) do not. Tinkhundla operate only with direct funding from government. Municipal councils are permitted to set deficit budgets where they are able to ensure sustainability.

Eswatini is in the process of migrating to the use of the 2008 SNA, which is not fully complete as of early 2022.

Subnational government expenditure by economic classification
2019	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total expenditure	54	0.6%	1.8%	100.0%
Inc. current expenditure	-	-	-	-
Compensation of employees	14	0.2%	-	25.4%
Intermediate consumption	-	-	-	-
Social expenditure	-	-	-	-
Subsidies and current transfers	-	-	-	-
Financial charges	-	-	-	-
Others	-	-	-	-
Incl. capital expenditure	-	-	-	-
Capital transfers	-	-	-	-
Direct investment (or GFCF)	-	-	-	-

EXPENDITURE: In FY 2018/19, local government expenditure was 1.8% of general government expenditure, at approximately SZL 390 million (USD 62 million PPP). Eswatini has low expenditure at local government level, although there are some infrastructure intensive services which have been devolved to local government as per the national decentralisation policy adopted in 2006. Staff related expenditure accounted for 25.4% of subnational government expenditure in 2019, which is lower than the equivalent proportion for general government, at 45%.

There is no recent data available for the breakdown of expenditure of subnational government entities.

DIRECT INVESTMENT: No information on direct investment at subnational level in Eswatini is available.

Private sector investment in Eswatini is facilitated through the Eswatini Investment & Trade Promotion Authority.

The government of Eswatini acknowledged in 2008 that infrastructure development will not occur at the desired rate without the involvement of the private sector and developed a public-private partnership (PPP) policy to assist in the facilitation of these investments. There is no PPP law in place.

ⓘ No detailed data available for this country

The majority of expenditure is spent on primary health services and education. However, spending is very low at subnational level, representing only 1.8% of general government expenditure in 2019. The functions that are devolved to the subnational level (particularly primary health and education) are thus unlikely to provide high levels of service.

Subnational government revenue by category
2019	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total revenue	58	0.6%	2.7%	100.0%
Tax revenue	-	-	-	-
Grants and subsidies	14	0.2%	-	23.9%
Tariffs and fees	-	-	-	-
Income from assets	-	-	-	-
Other revenues	-	-	-	-

OVERALL DESCRIPTION: Urban councils receive central government transfer payments according to a set formula, which accounted for SLZ 100 million (USD 15.8 million PPP) in the financial year 2019/20. The remainder of the revenue is locally raised. Both unconditional and conditional grants are allocated. Transfers represented 23.9% of subnational government revenue in the financial year 2019/20. The ministerial supervision of locally raised taxes is conducted through examination of the overall budgets set by municipal councils. Property-related income is typically the largest source of revenue for local authorities.

TAX REVENUE: Municipalities hold revenue-raising and budget-setting powers while tinkhundla do not. Tinkhundla operate only with direct funding from government. The Rating Act of 1995 regulates the power of local governments to establish, evaluate and collect rates on all immovable property on the basis of the valuation of the land and its improvements (Part I of the Act). 36% of property taxes are levied on government properties, with the remainder coming from private residences and commercial properties. There is ministerial supervision of locally raised taxes. This oversight is conducted through examination of the overall budgets set by municipal councils.

GRANTS AND SUBSIDIES: The tinkhundla are not able to raise revenue and are thus funded entirely by government grants from an empowerment fund (SZL 130 000 per council per annum, i.e., USD 20 444 PPP) and a regional development fund (SZL 10 million per region per annum, i.e., USD 1.6 million PPP). These funds are mainly for stimulating local economic development through funding viable projects.

Tinkhundla are fully reliant on central government for funding in order to operate. Urban councils, on the other hand, receive national government transfer payments according to a set formula. Both general and specific grants are allocated. On aggregate, grants and subsidies made up 23.9% of subnational revenue in 2019.

TARIFFS AND FEES: Urban municipalities may levy tariffs and fees for sales of goods and services rendered. Section 86 of the Urban Government Act grants the urban councils the power to generate revenue by charging rates, license and permit fees. However, in the case of town boards, this power should be assigned to them by the minister through publishing a notice in the gazette. The power to charge these fees is regulated by by-laws which are subject to the minister’s approval. Tariffs and fees make up a very small proportion of local government revenue.

OTHER REVENUE: There is very little revenue from other activities. Other revenues are collected from fines and miscellaneous and unidentified revenues.

ⓘ No detailed data available for this country

FISCAL RULES: Central government has significant control over the expenditure decisions of subnational government in Eswatini. The minister of housing and urban development may use its powers under the Urban Government Act to conduct an inspection or commission an audit (sections 101-102). All local authorities are required to submit their accounts and financial statements for external independent audit (section 103). The audit report is then presented to both the council and the minister.

DEBT: Regarding subnational governments debt, the Urban Government Act grants urban councils borrowing powers (section 94). Councils can access loans from local finance institutions, with permission from the relevant minister, as long as the tenure of the loan is less than 30 years. Overdrafts and other short-term loans are also permissible once approved by the minister. The level of local government debt is unknown.

TERRITORIAL MANAGEMENT OF THE CRISIS: The declaration of a national emergency, on 17 March 2020, led to the establishment of a National Emergency Plan which was coordinated by the National Emergency Management Committee and the National Emergency Task Team. Through this National Emergency Task Team, there was a direct coordination between state and non-state actors. The National Emergency Management Committee is a cabinet sub-committee consisting of state actors: the deputy prime minister is chairperson, and the Committee includes 10 other ministers such as the minister of public works and transport, the minister of finance, and the minister of health. Their function was to coordinate national and regional emergency management measures, and to act as an interface between the government and the international community. Equally, the National Emergency Task Force comprised of non-state actors, such as representatives and members of the emaSwati Royal Family, the Conference of Churches, and representatives from organisations such as the Eswatini Red Cross Society and UNICEF. The government was also tasked with working in collaboration with regional administrators, chiefs, traditional authorities and all relevant sectors to upscale the Preparedness and Response plan in communities. Security forces were part of the COVID-19 National Emergency Response. This was a centrally coordinated process, which included subnational government.

Further to the declaration of a national state of emergency, the government implemented containment measures. The earliest and perhaps most significant legislative response to the pandemic was the adoption of the Coronavirus (COVID-19) Regulations 2020 under section 43 of the National Disaster Management Act. This was published on 27 March 2020. Accordingly, on the same day, a partial lockdown went into effect, and a month later the Manzini region, where a third of the population resides, went into full lockdown.

EMERGENCY MEASURES TO COPE WITH THE CRISIS AT THE DIFFERENT LEVELS OF GOVERNMENT: The National Disaster Management Agency, mandated in terms of the COVID-19 Regulations 2020, coordinated and provided relief assistance to the most vulnerable, paying cash transfers of SZL 700 (USD 110 PPP) to 13 659 households in 14 constituencies in the country. Initially, the government suspended termination of employees during the pandemic. However, under the pressure of pandemic, the government disbursed 12.8 SLZ million (USD 2 million PPP) of the relief fund towards the support of workers who have lost their jobs due to the COVID-19 pandemic. Throughout the COVID-19 pandemic, Eswatini has had significant dependence on development partners and other non-governmental organisations.

IMPACTS OF THE CRISIS ON SUBNATIONAL GOVERNMENT FINANCE: The rural tinkhundla are entirely reliant on transfers from central government, and are thus heavily reliant on the performance of central government to ensure that there is a secure revenue stream. Central government ‘s revenue increased in the 2020/21 financial year, in comparison to the 2019/20 financial year, despite the onset of the COVID-19 pandemic, however, most of the effects of the pandemic were felt in the 2021/22 financial year as revenue declined by 7%. It is a similar pattern for government expenditure in 2021/22, which decreased by almost 4%. These impacts have widened central government’s deficit, which it has filled through some local borrowing and external borrowing for budget support. The urban councils are able to raise revenue, although the World Bank indicated in 2019 that these entities had weak revenue performance, high fixed operating costs, and ongoing deterioration in quality service-delivery prior to the COVID-19 pandemic. The extent to which the revenue raising ability of the urban authorities was affected is unknown.

As a result of the impact of COVID-19, the Recovery Plan described general government expenditure adjustments. The wage bill is to be decreased by 903 SLZ million over the 2021-2024 period. Transfers to state-owned enterprises are to be cut by 815 SLZ million, and goods and services are to be cut by 846 SLZ million. Overall capital expenditure is to be cut by 770 SLZ million. These amount to a reduction of between 0.6% in 2022 and 4.1% in 2024 of GDP.

ECONOMIC AND SOCIAL STIMULUS PLANS: On 27 April 2020, the prime minister assembled a team of cabinet ministers and tasked them to develop a Post COVID-19 Economic Recovery Plan to address the impacts of COVID-19 on the economy by creating opportunities for income generation and wealth creation in key priority sectors. On 14 August 2020, the prime minister officially launched the Post COVID-19 Kingdom of Eswatini Recovery Plan. The Recovery Plan is a 30 SLZ billion stimulus package that aims to accelerate the economy into a sustainable path of development. The recovery plan is designed to create momentum to grow the economy. The plan strives to foster a heightened partnership between the government of Eswatini and the private sector. The priority sectors are: business, agriculture, tourism & environment, mining, energy & water, infrastructure, and ICT & education.