EPTC faces E96.7 million deficit, liquidity concerns mount as turnaround strategy Stalls
By Kwanele Dhladhla
The Eswatini Post and Telecommunications Corporation (EPTC) has recorded a worrying
financial downturn, posting a consolidated deficit of E96.7 million for the financial year ended
March 31, 2024, a sharp decline from the E13.2 million surplus achieved in the previous year.
According to the recently released financial statements, which were highlighted by Auditor
General Timothy Matsebula in the Compliance Audit Report, which was tabled in Parliament by
Minister of Finance Neal Rijkenberg on Thursday, the corporation also registered a separate
deficit of E111.2 million in the same period, worsening from a deficit of E11.8 million in the
2023 financial year.
Analysts warn that without urgent remedial measures, the downward trajectory could continue, threatening the Corporation’s ability to meet its mandate and forcing
government intervention through a possible bailout.
EPTC management attributed the ballooning deficit to extraordinary costs and financial clean-up
processes. These included:
? Tax interests and penalties: E55.4 million
? Reclassification of write-offs: E37.2 million
? National Contact Centre intercompany provision: E26.6 million
? Towers write-off: E7.4 million
? Provision for uncompleted projects write-off: E32.2 million
Management explained that these extraordinary adjustments were necessary to align financial
reporting standards but inevitably weighed heavily on the bottom line.
Concerns were also raised regarding the Corporation’s turnaround strategy, which was approved
by Cabinet in June 2023. While Cabinet endorsed the plan, it declined to provide the requested
funding, directing EPTC instead to secure external financing for the strategy and for addressing
its pension deficit.
Management confirmed that external funding has not yet been secured. However, certain
elements of the strategy have been initiated using dividends from EPTC’s investment in MTN
Eswatini. Notable progress includes:
? Modernisation of the core network (95 per cent complete)
? Deployment of broadband fibre reaching 15,000 homes
? Wireless last-mile rollout serving 6,555 customers
? Executive-level structural review to improve efficiency
Despite these efforts, the pension fund underfunding remains unresolved, and broader
operational efficiency initiatives are incomplete due to lack of funding.
Adding to the financial distress, the Corporation is grappling with a liquidity crunch. As at
March 31, 2024, current liabilities exceeded current assets by E23.3 million. Current liabilities
stood at E437.1 million, against current assets of E413.9 million.
This imbalance reflects a poor liquidity ratio, exposing EPTC to risks of insolvency. The
Corporation may struggle to meet short-term obligations, settle long-term debts as they fall due,
and cover day-to-day operational costs.
The financial statements paint a sobering picture for one of Eswatini’s most critical state-owned
enterprises. Observers stress that unless a robust and well-funded turnaround strategy is
implemented, EPTC’s financial woes could deepen, undermining its ability to provide essential
telecommunications services in an increasingly digital economy.
Government may be compelled to step in with a bailout if the corporation’s liquidity position
deteriorates further. For now, stakeholders are calling on management to urgently pursue
alternative funding sources and accelerate implementation of cost-saving and revenue-boosting
measures.
EPTC’s struggle underscores the broader challenge facing state-owned enterprises in balancing
developmental mandates with financial sustainability.
