Illegal appointment of Phalala fund admin exposed 

…Ministry of health admits it was unfair labour practice, commits another illegal appointment in bid to hide it …Court declares similar appointment void.

By Zwelethu Dlamini

The Ministry of Health quietly installed a new administrator to run the Phalala Fund through a process that violated mandatory hiring laws and bypassed every safeguard meant to protect the integrity of public appointments.

Internal correspondence and records reviewed by Inhlase show that the Ministry filled the post without advertising the vacancy, interviewing candidates, or involving the Civil Service Commission’s Promotions Board — steps required under Regulation 28 of the Civil Service Order, 1973.

The Phalala Medical Referral Fund is an Eswatini government programme that assists citizens with accessing specialist medical care. The Fund handles tens of millions in taxpayer money and determines whether critically ill emaSwati receive treatment locally or abroad.

The appointment, made in January 2025, came just weeks after the legal acting term of long-serving Nursing Sister Cynthia Maseko expired. Maseko was appointed Acting Administrator of the Fund in June 2024—her second time performing the role, after first acting in 2021 when a previous administrator left.

Her acting term was legally limited to six months, expiring in December 2024, after which the vacancy was supposed to be advertised and opened to competition under Regulation 28 of the Civil Service Order, 1973. Instead, the Ministry of Health secretly appointed a new administrator, Simangele Dlamini, through a process that the Ministry itself later conceded constituted an “unfair labour practice” and exceeded the lawful six-month limit for acting appointments.

Maseko—who had previously acted in 2021 and again from June to December 2024—was bypassed without explanation, despite her institutional memory and operational experience.

On 4 February 2025, after recognising that the Ministry’s actions breached mandatory recruitment procedures, Maseko instructed her lawyers to write to the Civil Service Commission (CSC) demanding that the appointment be reversed and the post advertised in accordance with the law. The pressure prompted a remarkable admission. On 28 March 2025, Acting Principal Secretary Ncamsile Mtshali issued a written response acknowledging that the Ministry had exceeded the six-month acting limit and that the appointment process constituted an unfair labour practice. 

Instead of reversing the appointment, the Ministry attempted to neutralise the complaint by offering Maseko a Matron I post—a second appointment made without advertisement, interviews or competition. Officers who had been expecting the Matron I post to be opened were illegally superseded, revealing a repeated pattern of rule-breaking.

These unlawful appointments unfolded while the Phalala Fund was experiencing an unprecedented operational and financial breakdown. According to the Ministry of Health 2024/2025 Annual Report  the total budget of E179 928 740.00 was allocated for this Financial Year 2024/25, and a full release of the budget was done during the second quarter of the financial year. 

As of 31 December 2024, the amount owed to suppliers and service providers was E127 907 068.46. Phalala Fund owed E52 774 716.11 to service providers. The report states that contracts with foreign hospitals and specialist service providers expired on 31 March 2024. Although most were eventually renewed to 31 March 2025, several were not renewed in time, resulting in an immediate halt in patient referrals for specialist medical services and creating a significant backlog. Only after the contracts were reviewed and signed were some services restored.

The annual report further shows that referrals only resumed once the year’s budget was released. Debt had severely restricted the Fund’s ability to send patients out, as some service providers demanded that outstanding amounts be cleared before accepting new referrals. This interruption created a bottleneck of desperate patients. During the reporting period, 1,034 patients were referred, of whom 625 were sent for radiology. The remaining 409 were referred for specialist services, including oncology (116 patients), orthopaedics (44), ophthalmology (40), general surgery (32) and urology (27). 

“Over E50 million+ worth of invoices for past financial years will not be processed for payment due to shortage of funds of which most are local service providers. The current budget is not able to pay all arrears for previous financial years. Please note that Phalala also does not have a budget for the current year services since we used most in clearing our debts,” reads the report. 

According to the Ministry of Health, over 200 patients were waiting for assistance from the Phalala Fund as of July 2025.

Inhlase sought the required documents—PSC Form 4, written recommendations, interview minutes and Promotions Board records—but the Ministry of Health declined to comment, saying it could not discuss internal processes with a publication. The Ministry of Public Service also refused to respond directly, citing CSC’s constitutional independence under Sections 176 and 178 of the Constitution, and referred all questions to the Commission. 

The CSC Executive Secretary Nhlanhla Mnisi did not respond at all. The legal implications of these actions became more profound after the Industrial Court of Appeal delivered its ruling in Nkambule and Others v Chairman of the Civil Service Commission and Others (Judgment No. SZICA 41/2025, delivered 22 October 2025).The Court set aside a government promotion for violating the same legal requirements breached in the Phalala case: failure to advertise the post, failure to interview candidates, failure to provide written justification for superseding senior officers and unlawful delegation of authority by the Head of Department. The Court held that promotions made without complying with Regulation 28(1) and (2) and General Order A170 are ultra vires, unlawful and voidable.

Every procedural failure condemned in the Nkambule judgment occurred in the Phalala Fund appointments between June 2024 and March 2025. The Ministry exceeded acting limits, made a secret appointment, bypassed competition, concealed qualification requirements and repeated the same violations with the Matron I offer. The CSC provided no oversight. The Ministry of Public Service deflected responsibility. Three institutions with legal duties to uphold the recruitment framework instead retreated into silence.

These illegalities compromised a fund responsible for life-saving medical decisions. At a time when over 200 patients awaited assistance, when hospitals abroad were refusing emaSwati due to unpaid bills and when confidence in the health system was collapsing, the Ministry chose to install leadership through a process that violated the law and undermined public trust. The Nkambule ruling now provides a definitive legal basis to challenge the appointment and demand accountability for actions that harmed institutional integrity and denied patients timely. 

One senior official, speaking on condition of anonymity, warned that an inexperienced administrator—particularly one without a health background—might believe they were performing well simply because the Fund appeared to be operating “within budget.” 

“The Fund’s allocation is always lower than the medical demand…. What looks like a saving on paper usually means people who needed treatment were denied care,” the official explained. The official added that someone unfamiliar with clinical services may also fail to detect when the government is being overcharged for specialised medical procedures, leaving the Fund vulnerable to inflated billing.

More about the Phalala Fund

The Civil Servants Medical Referral Scheme established in 1995 covers costs of medical referrals to South Africa and Maputo for Civil Servants and their dependents, for specialist care that is not available in Eswatini. In 2002, this service was expanded with the establishment of the Phalala Fund, which provides access to specialised medical care to all eligible Eswatini nationals who are not already covered by another medical scheme. Together, the referral schemes aim to provide health coverage to emaSwati who are in need of specialized services, upon determination by the Phalala Board at Mbabane Government Hospital that options for treatment within the country  have been exhausted. The Phalala Fund covers costs of treatment, medications, accommodation, and transport for patients who are referred to external service providers. Phalala has continued to refer patients in need of specialized healthcare services from Government specialists to private specialist providers within Eswatini and externally to Mozambique and South Africa.