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Thursday, 17 November 2011

PRIVATE LOANS AT LEAST E1.4 BILLION

The loans secured this week to pay civil servants salaries amount to at least E1.4 billion.

Although, the Swazi Government has been secretive about the deal, including the rate of interest charged, it secured with private banks and financial institutions, Majozi Sithole, the Swazi Finance Minister, claims the loans are enough to meet four months’ salary of public service workers.

The estimated monthly wage bill for civil servants is E350 million, making the total loan worth E1.4 billion.

But, Sithole hasn’t said that the loan will only be used to pay civil servants wages. Earlier this week he said the government had standing obligations of E526 million per month; E350 million of this goes towards the payment of salaries for civil servants, and E120 million goes to parastatals while the remaining E46 million goes to the kingdom’s embassies. This is in addition to other non-salary expenditure of the government.

The money is of course a loan and Sithole hasn’t told us how he expects to repay the money.

In effect all he seems to be doing is putting off the day of total financial meltdown by a month or so. Once this loan is spent, Swaziland will be even deeper in debt and still have no way to rescue the economy.

Sithole is still refusing to name the institutions that gave the loans. He told the Times of Swaziland newspaper, ‘They asked government not to be revealed, so we will respect that.’

Meanwhile, Sithole is refusing to comment on a report, also in the Times, that government is close to securing E1.4 billion from two local financial institutions. A source told the Times, the Swazi government secured E1 billion from one of the companies and E400 million from the other.

See also

SWAZILAND DAYS AWAY FROM DISASTER

http://swazimedia.blogspot.com/2011/11/swaziland-days-away-from-disaster.html

IMF CALLS FOR SACRIFICE FROM THE KING

http://swazimedia.blogspot.com/2011/11/imf-calls-for-sacrifice-from-king.html

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