THE CENTRAL BANK OF
SWAZILAND
The bank of issue within the country’s
financial structure was established as
the monetary authority in April 1974
under the Monetary Authority Order of that
year, empowering the bank to monitor,
regulate and develop Swaziland’s financial
infrastructure. The Authority took on the
function of a central bank in 1978 when
the name was changed under the Monetary
Authority (Amendment) Act of 1979 and
additional powers were granted through
amendment to the Acts in 1982 and 1986.
Legislative amendments to the Order of
1974 provide the legal framework that
enables the bank to adapt to the changing
global environment and to incorporate new
developments and financial supervision.
The bank issues the national currency,
advises government, manages the
country’s official reserves and deals in
foreign exchange
markets, activities
which involve
both spot trading
and dealings in
the forwards
market. The
commercial banks
may manage
limited sums of
forex, reverting to
the Central Bank
if necessary. The
CBS also provides
central clearing
facilities for the
commercial banks
and operates.
U n d e r i t s
Development Finance Division, the bank
operates The Small Scale Enterprise Loan
Guarantee and Export Credit Guarantee
Schemes, as well as the Public Enterprise
Loan Guarantee Fund, which provides
guarantees to the commercial banks when
granting finance to Category A public
enterprises.
The Swaziland Government has a capital
fund which is administered by the Central
Bank and into which surpluses are deposited
to cater for future projects. The bank
operates the Swaziland Automated
Electronic Clearing House.
During 2009, CBS approved the movement
outside the country of up to E500,000 per
annum by individual permanent residents
from personal accounts for gifts,
maintenance, travel and other purposes.
THE NATIONAL CURRENCY
The Lilangeni (plural Emalangeni) was
issued as the national currency in
September 1974 on a par with the
South African Rand, under the Common Monetary Agreement. South African bank
notes, but not coins, are legal tender in
Swaziland. During recent years, the currency
has tended to fluctuate quite significantly
and following a seven-year low in 2008, it
substantially strengthened during 2009 to
reach E7.4/$US1, E12.10/UK Sterling and
E11.30/Euro towards the end of the year.
This compares with around E9.5/$US1,
E16.30/UK Sterling and E12.40/Euro a year
earlier.
THE COMMON MONETARY AREA &
EXCHANGE CONTROL
The monetary arrangement between
South Africa and Swaziland, which
dates back to when both countries
used British Sterling as their currency, was
formalised in December 1974 with the
signing of the Rand Monetary Area (RMA)
Agreement which became the Common
Monetary Area (CMA) in 1986. The
signatories are South Africa, Swaziland,
Lesotho and Namibia.
The CMA provides for the free flow of funds
between the four member countries with no
exchange controls. However, fairly liberal
regulations apply to the rest of the world.
The Balance of Payments reporting system
links authorised dealers to a database at
the CBS where all foreign exchange
transactions are reported.
The commercial banks advise on individual
allowances, which vary depending on
circumstances.
MONETARY DEVELOPMENTS
A sharp increase in the inflation rate
followed by a levelling off was a
major feature of monetary
developments during the year, mainly due
to the global downturn. Monetary policies
were characterised by three cycles from tight,
to steady and then accommodative. The
initial major challenge was to contain
inflation that resulted from high food and
energy prices. The second was to provide
financing conditions that support investment
and economic growth in the face of
prevailing global conditions. Since
December 2008, the monetary policy has
eased and the discount rate was gradually
reduced to 7%.
Interest Rates
For the first time since 2003, local interest
rates fell below those in South Africa by 50
basis points and as inflationary pressures
eased, the discount rate reduced five times
by a total of 450 basis points to reach 7%.
It is envisaged that the lower cost of
borrowing will be an incentive to potential
investors.
Statutory Reserve & Liquidity
Once again these remained unchanged at
2.5% and 13% of domestic liabilities. This
has been the case since August 2003. The
reserve ration also stayed virtually the same,
ranging between 2.7% and 3.2%. The
domestic banking system maintained strong
liquidity and domestic assets increased by
12.2% to E1,002.2 million. The liquid assets
to domestic liabilities ratio fell by 1.5% to
15.8% while surplus liquidity fell by 16.6%
to E201.4 million.
Net Foreign Assets
The country’s net foreign assets totalled
E9,234.3 million, reflecting growth of 40.7%
compared with grew by 92.8% the previous
year. Net official assets were up by 24.8%
to E7,260.2 million. Contributing to this
was Swaziland’s share of the SACU pool
and the depreciation of the currency up to
the end of 2008. The higher value of the
currency during 2009 will impact
significantly on the next results.
Domestic Credit Net domestic claims were significantly down by 86.1% to close at E160 million. This was due to a rise in government net balances with depository corporations, which again far exceeded credit extended to the private sector. Government net balances with depository corporations were up by 28.5% to E5,611.3 million. Growth in credit to the private sector was only 4.6% at E5,771.3 million compared with 20.6% the previous year. This is attributed to reduced demand in the face of escalating borrowing costs and the general economic situation.
THE COMMERCIAL BANKS
First National Bank & Wesbank
First National Bank has operated in
Swaziland since 1995. Its
headquarters are in the Sales House
Building at the Swazi Plaza in Mbabane
and there are currently four main branches
in Mbabane, Matsapha, Manzini and Big
Bend. Agencies are located at the New Mall
in Mbabane, Bhunu Mall in Manzini,
Nhlangano, Piggs Peak, Siteki and Bhunya.
FNB has the largest ATM network in
Swaziland country with 32 full points
countrywide and 13 mini ATMs located in
small towns.
FNB also provides the VISA Electron Debit
Card for its consumer and business
customers. This card allows the customer
to withdraw cash at over one million ATMs
worldwide and to pay for goods and services
at Point-of-Sale terminals globally, wherever
the VISA Electron logo is displayed.
The bank offers a wide variety of other
products, including cheque, transmission
and savings accounts; home and property
loans plus vehicle and asset finance; credit
cards, business and corporate banking
services, Online Banking, inContact (free
SMS messaging) and Speedpoint (point-ofsale
terminals).
The Business and Corporate Divisions
provide working capital term funding
structures for both business and commercial/
corporate operations throughout Swaziland.
FNB is a market leader in Online Banking,
which facilitates payments and receipts, and
has full cross-border functionality with all
South African banks. Customers also have
easy access to their daily account balances,
transaction history and statements.
The Treasury department caters for all local
and foreign market transactions and offers
expert International Banking advice and
information.
Wesbank, with dealership representation in
Mbabane and Manzini, is the leasing arm of
FNB specialising in competitive leasing services
for vehicles, machinery and equipment. It is
a key provider of asset-based finance catering
for both corporate and individual clients,
placing emphasis on quick response times and
high service levels. It provides customer service
facilities at most dealer outlets, where financial
assistance and advice are available.
FNB’s commitment to corporate social
investment is focused on addressing society’s
needs at grass root level and is keenly
highlighted in the bank’s brand promise of
“How can we help you?”
Nedbank Swaziland
Nedbank Swaziland is part of the
international Nedbank group, which
gained presence in the country in 1997
following the then Nedcor’s acquisition
of Standard Chartered Bank’s local
majority shareholding. It focuses on
using the right people and processes
while managing risk as an enabler,
striving to build sustainable
relationships with all stakeholders while
applying best corporate principles.
The bank delivers customized financial
solutions through corporate, business,
retail and SME banking functions,
offering a wide range of products and
services such as lending, deposit-taking,
transactional banking, asset-based
finance, investment, global trade and
treasury services to our clients.
In 2009 the bank launched a successful sixmonth
fixed deposit campaign, Nedbank
Premier Loan and the current account, a
convenient and safe cashless mechanism
for the payment of goods and services. The
Nedbank Internet banking channel is a
highly secure, flexible, convenient and
holistic system which is a leading solution
for transactional banking.
A number of initiatives under the
“Siyakhula” theme in 2009 identified
problem areas in the operations and lasting
solutions were formed to facilitate
communication between clients and the
bank, with an independent research agency
conducting an Internal Customer Survey to
measure client satisfaction.
An increase in successful ATM transactions
is a direct result of ATM uptime meeting
clients’ expectations and new ATMs were
installed in Matsapa and Manzini.
Nedbank’s Head Office is at the Swazi
Plaza in Mbabane. There are two branches
in Mbabane and Manzini, and one in
Matsapha, Ezulwini, Nhlangano and
Simunye, an agency at Mankayane and 17
ATMs throughout the country.
For the year ended December 2008,
Nedbank increased headline earnings by
26% to E44.9 million from E35.7 million.
Total assets grew by 38% to E1.7 billion
while customer loans dropped by 15% to
E817.4 million. Earnings per share increased
to 188 cents.
The bank is led by an executive management
team under MD Ambrose Dlamini and there
are 221 staff members. The Employee
Wellbeing Programme provides assistance
and support for issues such as alcohol and
drug abuse, HIV/AIDS, violence and
trauma, and bereavement and loss.
The Management Development Programme
(MDP) aims to build a world-class
organisation with capacity to execute the
group’s strategy and live up to its values. In
2009, the employee share ownership scheme
was introduced, together with a long-term
incentive scheme.
Nedbank has adopted Enterprise
Governance and is committed to the Code
of Corporate Practice and Conduct
contained in the King II report. The
compliance function provides assurance for
adherence to laws, regulations and codes
of practice and corporate culture is achieved
through continuous staff training.
Nedbank sponsors the Business Woman of
the Year Award, Technoserve and Students
in Free Enterprise (SIFE), as well as the
Swaziland AIDS Support Organization
(SASO), Hospice at Home and Hope
House. A significant part of the sponsorship
budget is allocated to community projects
which are carried out by staff in individual
branches.
Standard Bank Swaziland
Standard Bank Swaziland, which has been
operating since 1988, is the largest
commercial bank in the country in terms of
capital and assets. It is a member of the
Standard Bank Group, which has an
international presence throughout the world,
while its Stanbic Africa Division has
representation in 18 African countries and
21 countries outside Africa.
In Swaziland, Standard Bank provides a wide range of products and services to both its retail and commercial customer base. These include foreign exchange transactions, trade finance, leasing, investments and asset management. Specialised services, such as project finance, structured lending, derivatives and risk hedges are readily available through the support of Standard Corporate and Merchant Bank and Standard Bank London. Through its group presence and expertise, Standard Bank Swaziland is positioned to offer innovative and cost efficient financial solutions tailored to meet customer needs. The bank operates the first Maestro debit card which has grown in popularity in Swaziland. This enables customers to shop anywhere in the world and to draw cash from the 850,000 ATMs world-wide that display the Maestro or Cirrus signs. Recently, Standard Bank introduced its own credit card, which includes a budget option and provides for a garage card for vehicle running expenses. The scheme allows for up to 55 interest free days. With 12 points of representation and 45 ATMs throughout the country, Standard Bank has a large retail customer base. The goal is to expand its presence in Swaziland and to provide secure, simple and affordable banking to an increasing number of communities by continually developing the electronic service delivery channels. Standard Bank plays an important role in contributing to the economic, business and social development of the country and supports a number of charities, sporting bodies and development schemes.
Swaziland Development & Savings
Bank (SwaziBank)
This development finance institution was
established in 1965 by King Sobhuza II in
an effort to finance development projects, mainly smallholder farmers and low cost
housing.
The bank was mandated by its shareholder,
the Government of Swaziland, to be a
development bank as well as a commercial
entity and it has become a major player in
the financial sector, continuing to generate
profits despite the high risk mandate it
adheres to.
Since the bank was re-launched in 2001
under a new Managing Director, it has grown
from strength to strength with assets
reaching E1.3 billion compared to just E300
million in 2000. On its success path,
SwaziBank has been recognised significantly
in the corporate world and has annexed
several awards.
These include Euromoney Award 2005 –
Best Bank in Swaziland; African Banker
Awards 2007 – Gender Sensitivity;
Professional Management Review (PMR)
Africa 2007 Silver Award-Best Development
Agency and Second Best Bank in
Swaziland; International Arch of Europe
Award 2008 Gold Award – Quality Leadership Technology and Innovation;
2008 PMR Golden Arrow Award in the
Financial Institutions (Business
Development) in Swaziland and a Bronze
Award in the Business Sector Banks in
Swaziland; 2009 Century International
Platinum Quality Era Award in the realm
of Customer Satisfaction, Leadership,
Strategic Planning and Benchmarking; 2009
PMR Gold Award Best Development
Finance Institution in Swaziland; and PMR
Silver Award, Being in Top Three
Commercial banks in Swaziland.
The Managing Director, Stanley Matsebula,
has received personal awards for his input
in turning the bank around since his
appointment in December 2000 and has
received: 2008 PMR Diamond Arrow Award
- Highest rated official in the category known
as “Business Persons Deserving Special
Recognition for Outstanding Service and
Contribution over The Past 12 Months, and
2009 PMR Diamond Arrow Award - Most
Admired Business Person in Swaziland.
SwaziBank has nine branches across the
country and auto teller machines (ATMs)
for ease of cash transactions. The branches
are Mbabane (main and commercial),
Matsapha, Manzini, Pigg’s Peak, Simunye,
Matata, Nhlangano and Siteki.
The bank offers numerous products such
as Savings, Investment, Corporate and VIP
Accounts, Housing Loan facilities, vehicle
finance, business loans and foreign
exchange.
As a truly Swazi financial institution, the
bank is a socially responsible corporate
citizen that ploughs back to the nation,
investing millions of Emalangeni annually
in its social responsibility programme. It
sponsors the prestigious annual knock-out
SwaziBank Cup, which has increased from
E500, 000 in 2004 to E1.5 million in 2009
and 2012.
The bank also sponsors the annual Schools
Choral Music Competition, which has
increased from E50,000 in 2005 to
E120,000 in 2009.
SwaziBank’s also contributes to initiatives
aimed at improving the lives of the people,
such as the construction of schools,
churches, workshops and conferences, and
entertainment events. The Managing
Director participates as a guest speaker in
local schools speech and prize giving days,
where he delivers motivational talks and
donates money on behalf of the bank.
OTHER FINANCIAL INSTITUTIONS
The Liberty Group Since its inception 50 years ago, Liberty
has become one of South Africa’s
leading insurance and investment
groups. Among its stakeholders are over 2
million individual policy holders, more than
386,450 Pension Funds and some 9,066
shareholders. In 2008, Liberty collected
R14.8 billion in insurance premiums, and
by June 2009 managed total assets of E330
billion.
The asset manager STANLIB, manages
assets of R291 billion, and is the largest unit
trust manager. Liberty is also the largest
property developer in South Africa.
Liberty was the first life company to list on
the Johannesburg Stock Exchange; it
launched the first retirement annuity in
South Africa; co-founded the first unit trusts
(mutual funds) in South Africa; counderwrote
the first dreaded disease cover;
was the first to combine occupational
disability and impairment and the first to
revolutionise the medical insurance industry
with “Medical Lifestyle”.
Other firsts include introducing “Nurses on
the Road”, umbrella funds for the corporate
pensions market, a formal Financial Needs
Analysis process, without revolutionary
“Blueprint” software – and again taking financial planning to a new level, with the
introduction of “Wealth Connexion”.
Liberty was also the first company to drive
higher professional standards by introducing
compulsory product accreditation for
financial advisers; to respond to market
demands for revised commission structures,
and to recognise the strategic value of real
estate investment.
The future success of the family of
specialised wealth brands and partnerships
lies in the continued ability lever both the
power of specialisation and the collective
strength of the group, and to execute
strategy through enlisting, mobilising, and
partnering with outstanding people.
STANLIB has managed assets in Africa
since 1993, when it set up its first office in
Namibia. It now has companies in
Botswana, Lesotho, Kenya, Namibia,
Swaziland and Uganda, and manages
mandates in Mozambique and Sudan. It
has been in Swaziland for 10 years,
managing retirement funds for all sizes and
types of organizations, as well as individual
investment portfolios.
Liberty Life Swaziland was officially
launched in July 2008 and has significant
benefits to the economy, presently posting
a GDP growth rate of 2.8%. A further
benefit of the new regulatory regime is the
reduction of unethical practices. Liberty Life
Swaziland is run and staffed by Swazis and
while the company is initially held by Liberty
Group South Africa, at least 25% of equity
will be transferred to local residents and key
staff.
Products include Credit and Group Life, as
well as Funeral Benefits, aimed at
government and corporate markets for their
employees. It is planned to expand into
property, healthcare and general insurance.
Liberty and STANLIB can tap into its
parent company Standard Bank’s
experience in Africa and other emerging
markets, and the wealth of knowledge
obtained in 18 African countries of
operation. Additional resources are being
committed to Swaziland with skills
transferred to local people, enabling them
to meaningfully contribute to economic
growth.
Swaziland Building Society
Since its inception in 1962, SBS has
traditionally been the country’s major
provider of long-term mortgage lending,
supplying loan finance for the purchase of
vacant land and the purchase and
construction of affordable housing by all
sectors of the community. The Society has
an unequalled depth of knowledge on the
Swazi mortgage bond market and keeps up
with client demand.
The Building Society also offers commercial
mortgage loans This is linked to the Bond
Re-Advance facility, a derivative of mortgage
loans that enables businesses to secure loans
within 24 hours to finance working capital
requirements against bonded property.
Products for individuals include Sipatji
Advances for salaried people; Policy Loans
for holders of eligible policies issued by SRIC
and Guaranteed Car Loan Scheme Other
products include short-term loans against
investments and deposits and tailor-made
housing schemes under Homeplan that
enable borrowers to build on Swazi Nation
Land by mobilising pension funds as
collateral. Terms and conditions of
mortgage portfolios include extended
repayment terms and a loan rescheduling
option to assist in times of financial hardship
and high interest rates.
Among the other products are Investments,
the most popular of which are Permanent
Shares, savings such as Gold accounts,
payroll and transmission accounts, Prime
Linked Deposits offering attractive interest
rates, Special Call Accounts and Group Savings Schemes. Investments and deposits
are accepted at highly competitive interest
rates.
Collection Accounts allow the Society to
act as a collecting agent for service providers.
Through the SBS/Swazimed Medical Plan,
clients may enjoy the unique benefit of
joining the medical aid scheme on an
individual basis.
Training is the main focus in terms of
personal development and improvement of
delivery. A Performance Management
exercise during 2008/9 is expected to be
rolled out during 2009/10 to further improve
efficiency. A savings plan was approved to
encourage staff to provide for retirement:
in addition to the pension scheme. SBS has
launched a campaign to encourage the
public to be tested for HIV. Over 1000 people
participated, of whom 50 won prizes in the
form of school fees. The Society also
provides sponsorship and donations to
recognised charities and certain NGOs.
Recent projects include the modernisation
of Asakhe House, Mbabane; the
redevelopment of the Manzini Ngwane Street
Branch; and a new branch in Siteki to
broaden the Society’s base. ATM’s will be
installed in at least four towns during 2009/
10. During the financial year ended March
2009, the Society’s assets increased by 16%
to E993.4 million, while loans and advances
were up by 14% to reach E776.5. Shares
and deposits grew by 17% to E793.7
million. The Society realised an after tax
profit of E22.7 million – exceeding the E20
million mark for the first time in its history.
INSURANCE AND BROKERS
Since the recent opening up of the
Insurance Sector in Swaziland, when
the SRIC monopoly fell away, several
new players have entered the market, giving
clients at all levels, from corporate to
individual, a wider range of options.
The Swaziland Royal Insurance
Corporation
SRIC was established in 1973 by the Orderin-
Council of King Sobhuza II under founding
legislation No. 32/1973. The objective is to
provide adequate and proper insurance
business of all classes, including short and
long term insurance, in accordance with the
conditions appropriate to the normal and
proper conduct of insurance business.
The Corporation began writing business on
1st January 1974 and has lived up to its
founding principle, acting fairly and impartially
to all persons, and providing adequate and
proper insurance business. It has grown and
improved to become a solid and reputable
insurer, contributing to a stable domestic
insurance environment that has benefited the
Swaziland economy as evidenced by the
significant claims it has paid over the years.
Since its inception SRIC has provided cover
to individuals and all sizes and types of
industries, which have been the stronghold
of Swaziland’s economy. It serves its clients
by providing a full range of insurance
products, as required by the founding
legislation.
The Corporation has matured in the local
industry and this status is confirmed by a solid
balance sheet, proper operational
infrastructure, well trained staff and
committed shareholders. The shareholding
comprises the Swaziland Government – 41%;
Munich Reinsurance Company of Africa and
Mutual and Federal Insurance Company -
both 16%; Swiss Reinsurance Africa - 11%;
Zurich Insurance Company SA - 9%; South
African Mutual Life Assurance – 5% and
Swiss Reinsurance (Life and Health) – 2%.
Apart from the Swaziland Government, this
shareholding testifies to a solid backing and
the progressive infusion of current insurance
practices. Some of these shareholders provide
reinsurance support.
Prior to SRIC’s establishment, several foreign insurers operated in Swaziland. Government then entered into a joint venture with the various companies and while SRIC operated alone, the association with and shareholding of these companies ensured the continued transfer of skills and upholding of modern practices. An effective intermediary service enables good outreach for SRIC’s products. There are at least four major brokers in Swaziland and an efficient network of agents, particularly for life insurance. This ensures that the transfer of risk to the insurer is readily accessible. There have been serious disasters over the years that could have challenged weaker companies. The corporation met all its obligations thereby testifying to its solid backing. The ongoing training of staff ensures skilful and knowledgeable personnel, while service delivery is key to SRIC’s operations. With the advent of competition through new legislation, service delivery will be the determining factor for continued profitability. Product development will also be very relevant to SRIC’s continued success.
Lidwala Insurance Company
Lidwala officially opened its doors to the
Swaziland insuring public on 2nd November
2009 as the second operating insurance
company in the Kingdom. Following the
enactment of the Insurance Act of 2005
that opened the insurance market to more
players, Lidwala became an added
innovation in the insurance and finance
industry. Prior to this, there was only one
insurance company operating in Swaziland
for over 31 years.
As the name implies, Lidwala Insurance
comes as the backdrop of a strong capital
and technical background with a philosophy
deeply rooted in offering custom-made Alternative Risk Transfer Solutions (ART)
for the various insuring customers. This is
achieved through a wide range of Risk
Transfer Solutions that includes conventional
insurance, enterprise risk management and
Rent-a-captive options. Through these
various solutions, Lidwala offers a wide
spectrum of products that are designed to
meet each customer’s specific needs.
The company has introduced Rent-acaptive,
a self-insurance product targeted
to large corporate organizations that wish
to retain part or all of their risk. Under Renta-
captive, Lidwala assesses the customer’s
risk and establishes the exposure at hand.
A safe retention level is scientifically
determined depending on the customer’s risk
anatomy and this portion of the risk is selffunded
through Lidwala. The balance of
the risk is further reinsured to cater for
catastrophic losses so that there will always
be cover even if the fund has been exhausted
by claims. If at the end of the insurance
period there is money in the fund after
payment of claims and administration fees,
that money remains in the customer’s fund
and is reusable for the next insurance period.
Lidwala offers a wide range of insurance
products that are designed to meet
customers’ needs on both conventional and
Rent-a-captive basis. The company offers
Personal Lines products that provide cover
for all Domestic Insurance needs. These
include home buildings, contents, personal
all risks, personal liability, personal accident
and golfers’ cover. The products also offer
cover for motor combined policies, private
and commercial vehicles, and trailers if
owned by individuals for private domestic
use.
The major corporate insurance products
offered include assets all risks, money cover,
goods in transit, corporate motor fleet,
fidelity guarantee, group personal accident,
public liability, engineering, machinery breakdown, erection all risks,
electronic equipment, and
contractors’ all risks covers.
Commercial insurance covers
include the Multimark Policy,
fire, office comprehensive
cover, business interruption,
motor traders combined cover,
and credit insurance.
Lidwala Insurance also offers
a comprehensive agricultural
package for the farming
community that covers private
dwellings, contents,
commercial all risks, fire
damage to crops, farm
buildings, implements and
contents, livestock, theft,
transit, business all risks and
many others. In addition,
Lidwala offers specialized
covers, including directors’ and officers’
liability, professional indemnity bonds and
guarantees, umbrella liability, marine,
environmental liability, and difference in
condition cover.
Aon Swaziland
Aon, which employs 46,000 people in 550
offices across 125 countries, is a family of
companies specialising in insurance broking,
various areas of insurance and consultancy
services. Clients are served through the
global distribution network by professional
staff, who offer a wide range of specialist
services, providing innovative ideas in risk
management, insurance and consulting.
These clients include commercial and
industrial concerns, financial institutions,
insurers, municipalities, governments and
individuals. Together they comprise a
significant proportion of risks in the
Kingdom.
Aon operates a Four Keys of Service system:
Aon Risk Services is an insurance broker
while the Aon Speciality Group focuses on
speciality products. Aon Re Worldwide is
an international insurance broker and Aon
Consulting Worldwide provides integrated
services in human resources and employee
benefit risks.
The local arm of the organisation was
established in the Kingdom as Swaziland
Insurance Brokers in 1970. In 1996 it was
purchased by Aon Holdings, the world’s
largest broking house and this was followed
by a merger with Bowring and Minet
Swaziland in 1998, resulting in the change
of name to Aon Swaziland. The
shareholders comprise the Aon Corporation,
Swaziland Government, SIDC and the Aon
Swaziland Staff Share Ownership Trust
In June 2009, Aon made a global
announcement that the group had entered
into a once-in-a-lifetime partnership and
brand sponsorship agreement with
Manchester United Football Club, known
as Aon United in 2012
Impilo Yami Insurance Brokers
As a registered, licensed broker under the
Insurance Act, Impilo Yami offers integrated
long and short-term insurance products to
both the business sector and private
individuals in Swaziland. The company was
established in 1992 and has grown to
become the largest Swazi-owned brokerage
in the country, employing 20 staff members,
seven of whom are qualified specialists in
the various categories of insurance broking.
The corporate philosophy is to provide costeffective,
professional services with
commitment to excellence and efficiency.
This objective has paid off with income,
which is mainly based on commissions,
more than doubling over the past decade
and the company is now set to implement
its future growth plan.
This includes diversifying to incorporate a
financial services wing and investing in
education and further training for the staff,
most of whom are already highly qualified
in the various fields relating to finance and
insurance.
There is also a drive to increase corporate
business, thereby contributing to both the
insurance industry and the local economy.
Metropolitan Life Swaziland
Metropolitan, founded in South Africa in
1898, is the largest long-term financial
services group focusing on the lower to
middle income market. The vision is to
create prosperity by providing affordable
products that create financial growth and
security.
Metropolitan is a fully fledged financial
services group providing life assurance,
employee benefits, asset management,
property and collective investment
management and medical aid
administration. The brand is well known in
South Africa and has a proven track record
of offering accessible, affordable financial solutions to its clients. The group brand
slogan of together we can underpins the
company’s belief that it cannot deliver on
its vision alone and requires collaboration
and partnerships at both grassroots and
corporate level.
Metropolitan Life Swaziland is a whollyowned
subsidiary of Metropolitan Holdings.
It was established in March 2008 and aims
to provide affordable financial solutions to
the local corporate and retail sector.
Metropolitan has invested substantial
capital in setting up the business in the
Kingdom and has created employment for
ten Swazi citizens. It is seeking influential
local partners to take a meaningful
shareholding in the business, a strategy that
will both secure local knowledge to assist in
growing the business and, align the local
company with the group’s objectives of
empowering the communities in which
business is conducted.
Prior to the enactment of the Insurance and
Retirement Act 2005, only one insurance
company was able to operate in the country.
The consequence of this previously closed
market was low penetration of life insurance
products and services but now there are
excellent growth opportunities for
Metropolitan Life Swaziland. The stable
political and economic situation in the
country and the dependable legal
framework created by the Insurance and
Retirement Fund Act 2005 contribute to a
favourable operating environment.
Registrar of Insurance & Retirement
Funds
The main function of the RIRF is to supervise
and exercise control over the activities of
insurers and retirement funds. A sound
regulatory and supervisory system is essential
in order to maintain an efficient, safe, fair
and stable insurance industry and to
promote growth and competition in the
sector. This is particularly relevant since the
falling way of the monopoly status
previously held by the Swaziland Royal
Insurance Corporation, enabling more
players to enter the local market.
TAXATION
The following information is a guide only
and should not be relied upon as a substitute
for detailed professional advice.
Legislation
The present Income Tax Act came into effect
on 1 July 2003. It rules that any benefits
received by employees, including housing,
cars, education and utilities, are taxed.
Initially, this tax applied to 20% of the value
of the benefits and gradually increased to
100% for certain categories of benefits over
a five-year period.
Amendments to the Income Tax Act are
designed to bring commercial activities on
Swazi nation land into the tax net, put in
place a branch profit tax of 37.5% for
branches of foreign companies operating in
Swaziland. The tax free level for
retrenchments and terminal benefits is
E60,000.
Corporate Tax
This category is set at a flat rate of 30%, in
line with other SADC states. There is a 15%
withholding tax for royalties and nonresident
management fees, and a
withholding tax of 10% on interest paid to
residents. New concerns that are establishing categories of business not previously in
existence in Swaziland may apply for a
Development Order to qualify them for tax
at 10% flat rate. NGOs are exempt from
tax.
Allowances for the depreciation of
machinery, vehicles and equipment apply
and percentages vary depending on the
nature of the item. Provisional tax is payable
by companies and this is subject to various
rulings.
Personal Taxation
Annual incomes of up to E36,000 are tax
exempt with deductions starting at 20% for
up to E60,000 pa. (In effect, tax payers
receive a rebate of E7200 with an extra
rebate of E2000 for people aged over 60
years). Income earned between E60,000
and E80,000 is taxed at 20%, thereafter
up to E100,000 is taxed at 25% and any
amount over E100,000 is taxed at 33%.
Expenses deemed to be incurred in the
course of generating an income may be tax
deductible, provided they are of a recurrent
and not a capital nature.
Married women must submit separate tax
returns from their husbands and provisional
tax applies to individuals such as the selfemployed
and those who are not regularly
employed.
Tax Administration
Arrangements for payment of provisional
tax may be granted to companies and selfemployed
individuals. The Swaziland tax
year runs from 1 July to 30 June.
Individuals and companies are given 30 days
and four months respectively to complete
tax returns.
The Income Tax and Customs and Excise
Departments are in the process of being
merged to form the Revenue Authority.
The Authority is expected to phase out
General Sales Tax and introduce Value Added Tax within two years of its
establishment.
General Sales Tax
This is payable on most goods and services
and is charged on imported items, with the
exception of food, at the point of entry. The
flat rate is 14% but luxury goods, such as
tobacco products and alcoholic drinks are
taxed at 25%. The Sales Tax Amendment
Bill seeks to replace sales tax with VAT as
noted above. This move is expected to close
loopholes and generate additional income
by taxing more services.
Other Taxes
These include graded tax - which may be
phased out, transfers, stamps, customs and
excise duties, and municipal rates.