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CREDIT- RATING TO UNLOCK FINANCE IN EZULWINI
Vusi M. Matsebula
Town Clerk
Credit Rating to unlock finance in Ezulwini
• Ezulwini is a small predominantly residential town in Swaziland
•It is located along the Mbabane – Manzini corridor where Matsapha
the industrial hub of Swaziland is also located
• Whilst Mbabane is the Capital City, Manzini the economic hub and
Matsapha the industrial town, Ezulwini can be classified as a tourism
hub of Swaziland.
Background
hub of Swaziland.
•Houses the largest number of hotels, tourist attraction sites, close to
nature conservation reserves, cultural centres and other buildings of
national importance.
•The town has a day time population of about 4, 000 and a night time
population of about 2, 000.
Existing Land Use Map
1
Source: Ezulwini Town Board Town Planning Scheme, 2008
Ezulwini Town Board - Background
Ezulwini in Comparison with other Town Boards & Town Councils in Swaziland
Status TownArea (ha)
PopulationPopulation Density
(people/ha)Distance from Ezulwini (km)
To
wn
C
ou
ncil Nhlangano 1,217 9,071 7 113
Siteki 759 8,238 11 90
Pigg's Peak 857 6,212 7 73
Mankayane 807 1,011 1 46
Lavumisa 1,021 1,232 1 163
To
wn
B
oard
Lavumisa 1,021 1,232 1 163
Vuvulane 120 580 5 124
Hlathikulu 1075 1,993 2 86
Matsapha 1,258 13,432 11 22
Ngwenya 535 1,529 3 30
Ezulwini Urban Area 1,719 2,000 0.8 0
Ezulwini Developable Area
1,119 2,000 1.3 0
[1] Based on Swaziland National Population Census Provisional Figures (2007)[2] Of the 1,719 hectares of total urban area (jurisdiction area) of Ezulwini, approximately 600 hectares are identified as non-developable and include theexisting Conservation Areas, Steep Mountain areas (above 25%) and areas along the various drainage lines traversing the urban area.
Services provided by the Local Authority
•Environmental Health Services
•Refuse Collection and Disposal
• Road and Storm Water construction
• Street sweeping
•Town Planning and Building Control
•Parks
•Markets
• Bus and taxi ranks
• Cemeteries
• Animal Pounds
Ezulwini Town Board Challenges
• Lacks infrastructure such as a well developed road network, street
lights, sewerage system and water supply
• Land is owned by few individuals who are disposing it in piece meal
subdivisions
• Central government subventions and funding for Capital Projects is
calculated using the night time population of the various towns incalculated using the night time population of the various towns in
Swaziland
• Funding for any additional projects is through the local banks
• Existing infrastructure needs refurbishment
On going Capital Project (Loop Road)
Ezulwini Town Board Opportunities
• Rapidly growing town with great potential due to its relief and climate
• Most of the population is from the high income group and majority of
households are formal
• Houses most of the leisure lodges in the country with 1, 567 beds
available for tourists
• Is drained by four perennial rivers
• Located between Manzini and Mbabane
• A few minutes drive to Mlilwane Nature reserve, Mantenga Nature
Reserve, Mantenga Cultural Village, Hot Springs, Houses of Parliament,
Ludzidzini Royal Residence and National Stadium etc.
• Surrounded by high populated informal settlements
• Located next to the MR 3 highway
Ezulwini Town Board
• Currently very liquid in terms of finances and we are striving to
maintain this continuously over time.
• Operation finances funded through property taxes, service charges &
operating grants.
• Capital projects are funded through Capital grants, private loans and• Capital projects are funded through Capital grants, private loans and
operating revenues.
• Population mostly from the high income category as a result payment
of property taxes is not been a problem as such 77 % of the Local
Authority finances is obtained from property taxes.
Ezulwini Town Board
•Rapidly growing (two major commercial centres and five
residential townships currently proposed and studies are underway)
• Still has a number of opportunities for new businesses to diversify
the economy of the town
• The Central Government through the Ministries of Housing and• The Central Government through the Ministries of Housing and
Urban Development and Economic Planning and Development is
supporting the move to assist local authorities approach markets for
financing, and there has also been a buy – in from the Councillors
How Credit Rating will assist unlock
financing in Ezulwini
• Credit rating will assist the Local Authority access local markets for
funds to finance its Capital Projects at negotiated and justifiable rates.
• The infrastructure developments will be paid for by spreading the
costs to the tax payers more evenly over a reasonable period.
• There will be less reliance on the Central Government since the local• There will be less reliance on the Central Government since the local
authority will be able to raise its own capital funds by borrowing in the
market place at the best possible interest rates in order to lower the
cost of borrowing.
• Since spending on large items of infrastructure tends to be ‘lumpy’,
borrowing will provide large capital sums for immediate use.
How Credit Rating will assist unlock financing in
Ezulwini (cont..)
•The resulting longer term debt can be serviced from a regular stream
of municipal income whether directly from revenue resulting from the
investment or indirectly through increased tax revenues.
• Credit rating will also assist the Central Government in its drive to
decentralize service delivery.
• Borrowing funds for infrastructure, and repaying them over a number
of years, introduces an element of “intergenerational equity”.
• With the introduction of the new Retirement Funds Act 2005, which
states that Insurance Companies need to invest at least 30 % of their
funds in the country it means there are funds in the local market for the
Local Authority to access.
“Since the life of an infrastructure asset could be thirty years or more,
why should today’s taxpayers meet the full cost and later generations
reap the benefit?
Repaying a long term debt means that those who benefit from the asset
will also contribute to its cost”.
Barry M. Jackson – Obtaining a Municipal Credit Rating, a
brief overview
I thank you.