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Friday, 2 March 2012

SWAZILAND’S SACU CASH MYSTERY

Swaziland is predicted to have a budget deficit of nearly E2 billion next year, even though this year a surplus of E200 million is forecast.


The deficit raises doubts about how much Swaziland can rely on Southern Africa Customs Union (SACU) receipts.


In his budget speech last month (February 2012) Majozi Sithole, the Swazi Finance Minister, announced that there was expected to be a surplus in the budget of E200,904,000. This, he said, was because there would be a bumper harvest from the SACU receipts and Swaziland would collect about E7.1 billion in 2012/13. This is up from the E2.9 billion Swaziland got from SACU in the financial year just ended.


The SACU money for 2012/13 accounts for about 60 percent of all Swaziland’s income for the year.


The announcement raised a few eyebrows, because the SACU receipts Swaziland gets are dependent on the amount of trade being done in the Southern Africa region, especially through South Africa. But trade has been sluggish, not buoyant, and predictions are that things will not improve substantially in the foreseeable future.


Sithole believes that the SACU money will bail out the country this year and ensure that public servants will get paid and that other government bills will be met. But in his speech he warned that Swaziland should not rely on SACU receipts in future years.


Swaziland is nearly broke and can’t pay its bills. Since August 2011, it has been trying to get a E2.4 billion loan from South Africa, but King Mswati III, sub-Saharan Africa’s last absolute monarch, put the block on that once Pretoria demanded political reforms as a condition.


Last November the Swazi Government went scuttling to private financiers for a loan to pay public service salaries. Then suddenly the SACU money was announced and the government breathed a sigh of relief.


There are now doubts about whether the E7.1 billion from SACU is really money from the customs union or whether South Africa is using it to launder its own money to bail out Swaziland.


Suspicions were raised further this week when the full details of Swaziland’s budget estimates appeared on the Internet. The budget shows that although there is a forecast of E200 million surplus in 2012/13 there are further predictions of DEFICITS of E1.9 billion in 2013/14 and E1.7 billion in 2014/15 – suggesting that the money Swaziland receives from SACU in 2012/13 will not be repeated in the following years.

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