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Tuesday, 28 June 2011

S AFRICAN LOAN NOT AGREED (YET)

South Africa has not agreed to give Swaziland a R1.2 billion loan, despite reports circulating on the Internet that it has.

But, that doesn’t mean that it won’t agree sometime in the future.


Reports circulated yesterday (27 June 2011) after the Swaziland Solidarity Network (SSN) issued a statement condemning the loan. This was swiftly followed by a statement from the Swaziland Democracy Campaign taking the same line.

Such is the way that the Internet works, the SSN statement became ‘the truth’, even though there was no evidence that the loan had been granted.


Today, the Independent on-Line newspapers in South Africa report that the ‘loan could not be confirmed with South African officials but last week the government confirmed it had received a request for a loan and was considering it’, which sounds like the Independent is hedging its bets a bit.


The Sowetan newspaper was also unable to get confirmation of the loan from the South African Government.


So what is going on? We do know for sure that the Southern African Customs Union (SACU) has met to discuss Swaziland’s economic crisis. Last week, the African Development bank refused to grant Swaziland a loan (thought to be for US$100 million), because, contrary to statements put out by the Swaziland Government, it didn’t have the support of the International Monetary Fund.


Meanwhile, behind the scenes there is a flurry of activity involving those who want to see South Africa give Swaziland a loan and those who don’t.


Elements within the South African Government are briefing that they would like to give the loan to Swaziland. Their reasoning is that they don’t want to see Swaziland going the same way as Zimbabwe. For them, the stability of Swaziland’s economy and that of the Southern Africa region more generally is of prime importance.


Yesterday, it became known that Swaziland’s foreign reserves are dwindling month on month and there is only enough left to cover about 10 weeks’ worth of imports and other foreign expenses.


There are also fears that if Swaziland’s economy collapses, the Swazi currency – the lilangeni – would have to de-link from the South African Rand, causing it to become virtually worthless overnight.


While this is going on opposition groups in Swaziland are trying to seize the agenda by circulating reports of a ‘done deal’ on the loan and stressing how South Africa has ‘betrayed’ the Swazi people.


This could play well with trade unions in South Africa and certain elements of the African National Congress (South Africa’s ruling party).


Whatever South Africa decides to do about the loan, it unlikely that politicians can make a decision in secret, parliament would have to discuss it first.


The same goes for any decision the SACU might make. The constituent nations would want to discuss the plan in their own parliaments. And there is no guarantee that a SACU-backed rescue plan would meet universal approval. Lesotho, a nation with grave economic problems of its own, could reasonably ask why it is expected to contribute to a bail out of Swaziland, especially when it is widely acknowledged that successive Swazi governments had squandered money from SACU in past years.


So, it’s not over yet. But as media in Swaziland are reporting today, the Swazi government will not be able to pay public servants’ salaries next month, so time is of the essence.

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