Swaziland’s Government has failed to improve the economy
in any appreciable way and cannot pay its bills. This means immediate public
expenditure cuts are needed if the government is to meet the budget targets it
set itself in February 2012.
These are the latest findings of the International
Monetary Fund (IMF), which has just finished a visit to Swaziland.
The IMF has been assisting the government to get the
economy back on track after years of neglect by successive governments, all
handpicked by King Mswati III, sub-Saharan Africa’s last absolute monarch.
Even though the Swazi Government created its own plan for
what it called ‘fiscal adjustment’, which included reducing public expenditure and
cuts in public sector jobs, it has done next to nothing to implement the plan.
Now, the IMF has spelled out the consequences of this
inaction. In a statement following its visit, the IMF said the government would
find it difficult to pay its bills this year, without increasing domestic borrowing. It also said that one reason for this was that the government had
increased spending this year on security.
The government’s failure to pay its suppliers had meant
that small businesses in the kingdom had suffered and ‘been forced to cut down
their operations’, it said.
The IMF said for the government to meet its own financial
plan it needed an ‘upfront reduction in the wage bill of 300 million
emalangeni, (US$38 million) [and] additional cuts in non-priority recurrent
expenditures’.
The IMF pointed out, ‘These cuts will require sacrifices
by all segments of Swazi society, but the basic needs of the most vulnerable
should be protected as far as possible.’
This is not the first time the IMF has stressed that some
people in Swaziland are wealthy, while others are poor, and the better-off
should make a greater sacrifice for the common good. In November 2011, Joannes
Mongardini, leader of the IMF mission to Swaziland, suggested to the BBC that even
King Mswati and the Royal Family should play their parts by reducing their
budgets.
Nothing happened, although in October 2012 Swazi Finance Minister
Majozi Sithole told the media that King Mswati was prepared to peg the amount
of money he takes from the Swaziland budget and not increase his budget in
future years. This statement was received with widespread scepticism, since the
king continues to spend the Swazi people’s money on luxuries for himself.
In its most recent statement, the IMF also said the
government would have to make further cuts in the 2013 – 2014 national budget,
including cuts in what it called ‘non-priority spending’. It added, ‘Capital
projects should be prioritized and funded based on maximizing their impact on
economic growth and poverty alleviation.’
This implies that projects such as the Sikhuphe International Airport that is at least two years behind schedule for completion
would not get any more money. This is unlikely to be the case, because even though the airport has been widely
criticised as unnecessary and a ‘white elephant’ it is supported by King Mswati,
to the extent that outside of Swaziland, the airport is often referred to as
the king’s ‘vanity project’.
The IMF restated a point it has made for many years that
many of Swaziland’s economic problems were not related to the global economy,
but were situated within Swaziland. It said, ‘Growth in Swaziland has been
weaker over the last ten years than in other SACU [Southern Africa Customs
Union] countries. This is associated with high unemployment, widespread
poverty, rising inequalities, and the highest HIV/AIDS prevalence rate in the
world.
‘A poor business climate and the lack of competitiveness
are key obstacles to attaining higher sustainable growth and creating jobs.’
See also
WHY IMF MUST DITCH SWAZILAND
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