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Friday, 17 February 2012

SWAZILAND LOANS DEAL ‘ILLEGAL’

A Parliamentary committee has accused the Swaziland Government of acting unconstitutionally by raising loans to get the money to pay public service salaries.

A report from the Finance Committee accuses the government of acting illegally when it put up its stake in the Swaziland Posts and Telecommunications Corporation (SPTC) and the cellphone company MTN, as collateral for loans in November 2011.

A great deal of secrecy surrounds the details of how much the government took as loans and from whom.

At the time it was speculated that the loans were worth E1.4 billion (US$180 million), enough to meet four months’ worth of public service salaries.

The Swazi Government refused to reveal the names of those giving the loans, or any details of their terms, claiming commercial confidentiality.

Now, a report from the Swazi Finance Committee tabled this week fills in some background to the deal, but the identity of what the committee calls the ‘entity’ making the loan remains secret.

Marwick Khumalo, chair of the Finance Committee, said the government had set out on a ‘wild hunt for funds’ to pay salaries.

According to the report, Minister of Finance Majozi Sithole informed the committee that in November 2011 it proved difficult for government to pay civil servants salaries.

The Times of Swaziland, the only independent daily newspaper in the kingdom ruled by King Mswati III, sub-Saharan Africa’s last absolute monarch, quotes from the Finance Committee report. It states, ‘In order to pay these salaries [government] had to clinch a deal with an entity and also had to put down shares in SPTC and MTN as collateral and the repayments are to be done over a period of six months.’

The Finance Committee reported that in October 2011 salaries were paid using money received from the Southern African Customs Union (SACU) and the Swaziland Revenue Authority and in December it was through collections and from Swaziland’s financial reserves.

The report says that in January 2012 salaries were paid from SACU receipts and according to Majozi Sithole, the Finance Minister, initially, government had to raise E500 million from parastatals that receive subventions from government.

‘He also stated that the payment of salaries for February would be a challenge,’ the report stated.

Khumalo, the Finance Committee chair, said the committee noted that the acquisition of loans to pay for salaries was done outside the provisions of the Constitution’s Section 204 (2).

‘The minister argued that they were given legal advice by their lawyers in the ministry that what they were doing was in order, using the Treasury Bills and Government Stocks Amendment Act 2010 as the basis for their actions,’ the committee report stated.

Khumalo disagreed and said that piece of legislation dealt exclusively with the sale of treasury bills and government stocks and made no provision for the acquisition of loans and or using government shares as collateral.

See also

PRIVATE LOANS AT LEAST E1.4 BILLION

http://swazimedia.blogspot.com/2011/11/private-loans-at-least-e14-billion.html

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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