At last, the Swaziland Government has confessed. It cannot pay its public service salaries.
It is possible that the May 2011 payment will not be made – and there is definitely no money to pay salaries after that.
And, Majozi Sithole, Swaziland’s Finance Minister for the past 10 years and a key player in the government actions that has brought Swaziland to its economic knees, also admitted that the so-called ‘Letter of Comfort’ the Government says it has received from the International Monetary Fund (IMF), will not automatically mean that it will get a loan from international banks.
Without the loan, Swaziland will in effect be bankrupt. And even if it did get the loan the money wouldn’t be released until at least July 2011.
Sithole made his revelation on state-run SBIS radio yesterday (9 May 2011).
The Times of Swaziland reported today that Sithole told listeners it would be difficult to pay salaries in May, but impossible for June and beyond. There are between 30,000 and 35,000 public servants in Swaziland.
The Times said, ‘Since openly acknowledging that it is faced with a fiscal crisis, government has, for months, said civil servants’ salaries are a priority and would be guaranteed.’
Sithole said that Government revenue collections were not enough to meet the wage bills. He refused to say if the government would try to get loans from banks in Swaziland to pay the bills. In February 2011 when it last tried to raise money this way through bonds it could only sell one-fifth of the number it needed.
He also refused to say if the government had contingency plans if the banks did not bail him out.
The Swazi Observer reported Sithole saying even though Swaziland had received the letter of comfort from the IMF which makes it eligible to be get credit from international financiers such as the World Bank, that process was not automatic.
SWAZI GOVERNMENT TO BLAME FOR CRISIS