By SIBUSISO DLAMINI | 2025-01-19

Eswatini National Provident Fund (ENPF) Board Chairman Mduduzi Gina has hailed the proposed conversion of the fund into a national pension scheme as a breakthrough reform with huge potential to transform the country’s social security landscape.

Gina described the proposed change as more than just a policy shift or a strategic economic move, but also a historic fulfillment of a decades-long aspiration for workers in the country.

“The conversion has the full support of workers as it was one of the 27 demands submitted to the government of Eswatini in the mid-90s,” said Gina, emphasising that the proposed transformation represents a critical step towards addressing long-term financial security for all workers, including those in the informal sector.

Highlighting the potential of the National Pension Scheme (NPS) in ensuring a dignified retirement for every Liswati, Gina explained that contributions under the envisioned pension scheme would be collected from both formal and informal sector workers, thereby creating a safety net for individuals who have traditionally been excluded from retirement benefits.

“For the street vendor earning irregular wages or the domestic worker without employer-sponsored benefits, this scheme is their gateway to financial security in retirement,” Gina said.

The board chair also addressed the scheme’s innovative portability provisions, which he said ensured that workers can maintain their retirement benefits regardless of job changes or transitions between the formal and informal sectors.

“Membership of the national pension fund will follow workers throughout their careers. This guarantees continuity and security, even for those who frequently switch jobs,” he stated.

The scheme’s mandatory nature for workers under at 45 years of age and below has sparked debate, but Gina defended the provision as essential for the sustainability of the proposed national pension fund.

“Broad-based participation is critical to creating a robust and inclusive system,” he said, explaining that for those over 45 years, the option to buy past years of contributions offers flexibility while ensuring no one was left behind.

Gina shone light on the fact that contributions would guarantee retirees a reliable monthly income, rather than the lump-sum payouts that have been the hallmark of the current ENPF (provident fund).

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“This shift ensures income replacement and protects against poverty in old age,” he added.
Beyond individual financial security, Gina argued strongly that the pension scheme would also act as a powerful engine for economic development.

He highlighted the ENPF’s impressive track record in local investments, with stakes in prominent enterprises such as Montigny, Eswatini Mobile, and Pick n Pay (Lorjaf), among other investments.
As a result, he maintained that by redirecting a greater percentage of its portfolio into local projects, the fund aims to stimulate sectors capable of addressing high unemployment rate, particularly among the youth.

“The NPS will allow us to channel even more resources into critical sectors like infrastructure, renewable energy, and technology. This will create jobs, boost local industries, and contribute to the country’s gross domestic product (GDP) growth,” he said.

“When we invest in road infrastructure, for instance, we’re not just building roads—we’re creating employment and enabling other industries to thrive through ripple effects, and also create a conducive environment for direct foreign investments” he added.

On that account, he called attention to the fact that the ENPF’s track record of prudent financial management lends credibility to the proposed pension scheme.

With total assets exceeding E6.5 billion, Gina assured stakeholders that the same governance principles that have sustained the Provident Fund would guide the NPS.

“The proposed Bill to convert has ensured that there are advanced oversight mechanisms, transparency standards, and member-centric policies to ensure that every contribution is secure and properly managed and accounted for,” he said.

“Every Lilangeni contributed will be accounted for, and every decision will prioritise members’ best interests,” he stated.

To further bolster confidence, Gina guaranteed that the NPS drew lessons from countries like Zambia, which successfully converted its provident fund into a pension scheme.

Zambia’s transition introduced sustainable monthly pensions, inflation adjustments, and a defined benefit plan.

“We have studied global best practices to design a scheme that is both robust and equitable,” he said. Gina’s assurances were echoed by top social security expert Yollard Kachinda, a former Director General at Zambia’s National Pension Scheme Authority during the ENPF’s sixth stakeholder forum recently held, where he urged the nation to embrace the transition.

“A well-structured pension system is a lifeline for retirees, ensuring dignity and security in their later years,” he said. Acknowledging the mixed reactions to the proposal, Gina underscored the importance of stakeholder engagement.

“We’ve initiated comprehensive consultations with employers, workers, and other key stakeholders to address concerns and build trust in the system. This is not a top-down approach—it’s a collaborative effort,” he emphasised. He therefore called on all stakeholders to support the initiative, urging citizens to look at it in two ways, to address the issue of financial security in the future and as an investment vehicle in the country’s future.

“The NPS represents hope, stability, and prosperity for Eswatini. Together, we can ensure that every Liswati can retire with dignity and financial security,” he stated.

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