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Thursday, 2 February 2012

SWAZI ECONOMY STILL OUT OF CONTROL

Swaziland’s government has failed to make any headway in its attempt to steer the kingdom away from bankruptcy.

Despite a year of statements from the government, handpicked by King Mswati III, sub-Saharan Africa’s last absolute monarch, that things are getting better, evidence released this week shows the opposite is the case.

The International Monetary Fund has been in Swaziland over the past few days to meet with top politicians and completed its mission yesterday (1 February 2012). In a statement the IMF revealed that the Swazi economy continued to be out of control.

The Swazi Government had announced before Christmas that it would be receiving a ‘windfall’ of about E7 billion from the Southern Africa Customs Union (SACU). It led people to believe that this money would be available to pay public servant salaries for the coming months. Before Christmas the government struggled to meet the December wage bill.

But the IMF has told the government the best use of the SACU money is to pay off some of its debts – especially to the Swaziland central Bank.

The IMF also said the government should immediately cut the wages bill by at least E300 million (1 percent of GDP). An early retirement scheme would help to make this cuts, it said.

‘In order to repay domestic arrears and advances from the central bank, the 2012/13 budget should aim at an overall surplus of E 919 million (3.1 percent of GDP). In addition to adjusting the size of the budget, the quality of spending should be improved, with more resources allocated to education, the fight against HIV/AIDS, and social protection for orphaned and vulnerable children and the elderly’ the IMF said.

The IMF also said the government should aim for a budget surplus in 2012 – 2013 of E919 million (3.1 percent of GDP).

Meanwhile, the government is under pressure to spend. The University of Swaziland has not opened this semester, saying it hasn’t received money from the government to cover administration and salary costs. It is estimated it needs E22 million a month.

Students have been protesting this past week because they have not been paid their allowances and there are reports that schools may close as fees have not been paid by the government.

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