PENSION FUND INVESTORS: MINISTER PLEASE RECONSIDER SOME OF YOUR PENSION FUND APPOINTMENTS
This letter is issued in light of the recent appointment to the Investment Committee of the National Provident Fund of the Kingdom of Eswatini of an individual whose prior public role (as Chief Executive Officer of the Royal Science & Technology Park) has been associated with longstanding allegations of corruption, fraud, and financial mismanagement.
Because the Provident Fund retains investment managers in both Eswatini and South Africa, this appointment raises significant legal, compliance, prudential, and reputational risks across jurisdictions. Moreover, the following analysis draws on recent IMF and World Bank reports on Eswatini's financial sector stability, governance challenges, and institutional capacity to emphasize the broader systemic implications of maintaining integrity in fiduciary oversight.
2. Recent IMF and World Bank Findings:
Relevance to Governance, Integrity, and Financial Oversight Recent assessments by the International Monetary Fund (IMF) and the World Bank have underscored the central role of governance, transparency, and institutional integrity in strengthening Eswatini's economic resilience and financial credibility.
These analyses are particularly relevant to the management of public funds and social-security assets such as the National Provident Fund, where fiduciary integrity directly influences fiscal stability, investor confidence, and long-term sustainability.
In its 2024 Financial Sector Stability Review, the IMF highlighted structural vulnerabilities within Eswatini's non-bank financial institutions, including weak supervisory capacity, limited transparency in oversight functions, and gaps in governance accountability.
The report called for enhanced regulatory enforcement and ethical leadership as prerequisites for building confidence in the country's financial system. The IMF further warned that failures in governance within institutions managing public savings could undermine systemic stability.
These findings are directly applicable to the Provident Fund's Investment Committee: the appointment of individuals lacking fitness or probity not only contravenes fiduciary law but also runs counter to the IMF's governance reform priorities.
The IMF 2024 Article IV Consultation Report reinforced these concerns by emphasizing that Eswatini's fiscal position remains fragile due to reliance on volatile Southern African Customs Union (SACU) receipts and inefficiencies in public-sector management.
The report noted that stronger governance frameworks and greater transparency in public financial management are essential to restore investor trust and create fiscal space for inclusive growth. Misgovernance in public entities (particularly those entrusted with retirement and pension assets) could therefore magnify fiscal risks and reduce international credibility, potentially affecting access to concessional finance.
Complementing these findings, the World Bank's Country Partnership Framework for Eswatini (2024-2028) identified transparency, accountability, and fiscal discipline as foundational pillars for achieving sustainable growth. The framework specifically cited the need for robust institutional integrity and professional public-sector leadership to attract private investment and support social development.
A Provident Fund governed by ethical and competent fiduciaries aligns squarely with this agenda; conversely, any erosion of integrity at committee level undermines both domestic reform efforts and international development cooperation.
Furthermore, the World Bank's 2025 Fiscal and Private Sector Reform Support Program reaffirmed that improvements in governance and the quality of public expenditure management are critical to Eswatini's long-term financial health.
The report stressed that restoring public confidence requires visible action against corruption, strong accountability mechanisms, and adherence to the rule of law in all appointments affecting public finances.
The Investment Committee of the Provident Fund; being the custodian of citizens' savings; should exemplify these principles. Taken together, these IMF and World Bank reports provide a clear and authoritative context: good governance, ethical leadership, and transparent fiduciary oversight are not optional aspirations but fundamental economic necessities.
They directly influence the creditworthiness, fiscal performance, and international reputation of Eswatini. Appointing unfit individuals to positions of financial trust therefore represents not merely an internal compliance lapse but a macroeconomic risk, undermining the very reforms that the global financial community has identified as essential for Eswatini's stability and growth.
3. Legal, Compliance, Prudential & Ethical
Risks The appointment of an individual lacking "fit and proper" credentials intensifies the risks already outlined. Investment managers in both jurisdictions face potential exposure to breaches of fiduciary duty, regulatory non-compliance, and reputational damage. This includes liability under the Retirement Funds Act, Public Finance Management Act (PFMA), and the FAIS Act (South Africa), as well as under OECD and Basel governance principles.
Acting under the direction of an unfit individual could void fiduciary protections, invite sanctions from regulators such as the FSRA or FSCA, and constitute professional misconduct. Furthermore, ethical codes such as the CFA Institute's Standards of Professional Conduct and the King IV Report on Corporate Governance require investment professionals to avoid association with persons known to engage in dishonest or corrupt conduct.
Beyond the Fund itself, such governance weaknesses create contagion risk across the broader financial ecosystem. The Central Bank of Eswatini and the South African Reserve Bank (SARB) rely on sound fiduciary oversight within institutional investors to ensure monetary stability, capital adequacy, and the integrity of financial flows.
If funds under public management are influenced by individuals of questionable integrity, it weakens prudential confidence, complicates macro-financial surveillance, and heightens systemic risk across the non-bank financial sector.
For the FSRA and FSCA, the persistence of unfit individuals in fiduciary roles poses a supervisory credibility risk. It signals weak enforcement of governance and compliance standards, undermines investor and contributor trust, and may draw scrutiny from multilateral partners or regional standard-setters such as the Southern African Development Community (SADC) and African Peer Review Mechanism.
This could ultimately impair each regulator's standing in cross-border supervisory cooperation and financial sector assessments. In short, the failure to enforce fit and proper standards in fiduciary appointments not only threatens the Provident Fund and its contributors but also exposes both domestic regulators and central banks to reputational, prudential, and systemic risks.
4. Recommended Compliance & Risk Mitigation Measures
To safeguard their mandates and uphold public trust, all investment managers serving the Eswatini National Provident Fund should:
1. Conduct enhanced due diligence on all fiduciaries and governance structures associated with the Fund, including background checks and integrity assessments.
2. Refrain from executing investment decisions or directives that are influenced by individuals who do not meet the "fit and proper" standard.
3. Escalate and document concerns internally and, where necessary, report them to the FSRA (Eswatini) or FSCA (South Africa). Ensure contractual safeguards; including indemnities and termination clauses; are in place to mitigate third-party and reputational risks.
4. Maintain comprehensive compliance records to demonstrate regulatory diligence.
5. Encourage transparent communication with stakeholders to reaffirm adherence to fiduciary standards and ethical governance.
Failure to take these measures may expose firms to joint liability, reputational damage, and possible enforcement action.
5. Conclusion & Call to Action
The stability of the Provident Fund, the integrity of Eswatini's and South Africa's financial systems, and the confidence of contributors depend fundamentally on uncompromised governance, ethical leadership, and legal probity. Weak governance within a major public fund not only threatens contributor wealth but can distort financial flows, impair supervisory credibility, and undermine confidence in the broader financial architecture monitored by the Central Bank of Eswatini and the South African Reserve Bank.
By linking this specific appointment decision to the broader governance and prudential concerns highlighted in IMF and World Bank reports, this memorandum underscores the urgency of holding fiduciary appointments to the highest standard.
Investment managers, regulators, and monetary authorities in both Eswatini and South Africa are therefore urged to review, remediate, and reaffirm integrity and fitness in all fiduciary appointments and oversight structures affecting the National Provident Fund.
"Those who cannot be trusted with public money cannot be trusted with public office."