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Friday, 20 May 2011

IMF WARNS OF 30 PERCENT PAY CUTS

The Times of Swaziland, the only independent newspaper in the kingdom, claims today that the International Monetary Fund (IMF) has warned the government it may have to cut public sector pay by 30 percent by the end of the year if it continues to miss its own financial targets in its bid to rescue the Swazi economy from disaster.


Times of Swaziland


20 May 2011


SOURCE


Cut salaries by 30% – IMF


MBABANE – The International Monetary Fund has reportedly suggested that government may eventually have to carry out 30 per cent cuts on the salaries of everyone who is on the government payroll.


This is according to impeccable sources from within the civil service.


Initially, it was suggested that the highest pay cuts would be of 10 per cent; for those who earn more than E300 000 a year.


The IMF said the 30 per cent cut may soon be the only option available to the country, should it continue missing the benchmarks outlined in the Fiscal Adjustment Roadmap (FAR), which government proposed and the IMF endorsed.


This sobering message was delivered to Cabinet on Tuesday by the IMF delegation that was recently in the country.


The IMF team, led by Joannes Mongardini, had been in the country for two weeks to review and monitor the progress that the country has made towards meeting some of the key areas of FAR, which are meant to help get the economy back on track.


While in the kingdom, the IMF delegation met with His Majesty the King, the prime minister, the Minister of Finance, the Governor of the Central Bank, donors, representatives of the private sector and trade unions.

Before jetting out of the country on Wednesday morning, the IMF team briefed the full Cabinet at their weekly meeting on Tuesday, when government was officially told that it had fallen short of meeting the agreed-upon targets.


Key among the benchmarks that government was supposed to have met was a reduction of E240 million in the annual government wage bill.


When last in the country, in February, the IMF had recommended pay cuts towards a five per cent reduction in the wage bill.


The IMF team met with the unions on Monday at the SNAT centre in Manzini.


According to sources, the IMF delegations felt that an agreement between government and the unions was still far off, and, if it eventually came to pass, would definitely fail to meet the end of May deadline.


Sources said on Tuesday the IMF delegation let government in on this assessment and went on to make new proposals.


"The delegation recommended that government sell its shares in various companies in the country to raise money. They recommended that we sell our shares in companies like the SRIC (Swaziland Royal Insurance Corporation) and the sugar companies in Mhlume and Simunye, to mention a few.


"They said, if we continue to fail to take their recommendations on board and implement them, we will find ourselves in a position where we may have to effect 30 per cent cuts across the board before the end of this year," the highly-placed source said.


When approached for comment on this IMF statement, Minister of Finance Majozi Sithole said government had taken a decision not to comment on any IMF recommendations until they had fully discussed them and come up with a government position on them.


Government Press Secretary Macanjana Motsa said the IMF report would be discussed next week.


"Government has received the IMF report and is looking through it. Its contents will be discussed at a special Cabinet meeting scheduled for next week Tuesday," Motsa said.


See also

DID SWAZI PM LIE ABOUT IMF SUPPORT?

http://swazimedia.blogspot.com/2011/05/did-swazi-pm-lie-about-imf-support.html

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