SWAZI MEDIA AND THE FAILING ECONOMY

Two weeks ago I reported that the Swazi media were seriously misleading themselves and the kingdom about the state of Swaziland’s economy.

This was on the occasion of the official opening of the Swazi Parliament by King Mswati III.

The media reported that the Swazi economy was growing, but more work was needed to make it stronger.

I pointed out that in fact the Swazi economy was in danger of collapse because of its over-reliance on funds from the South Africa Customs Union (SACU).

I said that a report on Swaziland from the International Monetary Fund (IMF) in 2007 had warned that the amount of money Swaziland was receiving through SACU made the economy of Swaziland look better than it really was.

Now, a newspaper in South Africa has warned that SACU is close to collapse because of disagreements between member states on how to conduct trade with Europe.

Business Day reported yesterday (Monday 25 February 2008) that SACU was split last year when Botswana, Lesotho, Namibia and Swaziland broke ranks with South Africa and signed an interim economic partnership agreement (EPA) that would govern trade with the European Union (EU).

The report from Business Day which has been picked up by media across the world said,

‘Now, angered by the other members’ decision to initial the pact, it is feared that South Africa might use their move as a reason to break up the union. This would have grave economic implications, especially for Lesotho and Swaziland, which rely heavily on revenues from the customs pool.

‘It is understood that EU Trade Commissioner Peter Mandelson is to meet President Thabo Mbeki this week to discuss South Africa’s position on the EPA. Mbeki, in his state of the nation address this month (February 2008), singled out the EPA and regional integration as priorities this year, but observers said these commitments were not reflected on the ground.’

The row is about member states of SACU ‘breaking ranks’ and making their own deals with the EU. South Africa opted out of the EPA at the end of last year (2007), citing unfair demands by the EU. Under article 31 of the SACU Agreement, member states may not enter into new preferential trade agreements with third parties without the consent of other members, Business Day reports.

The report quotes one commentator, who declined to be named, ‘SA was initially surprised when SACU member states broke ranks, but it can now use this to break up the union. The signs are not positive.’

This manoeuvring puts Swaziland in a difficult position as it relies for about 70 percent of its annual income from receipts from SACU. It is now vital that people in Swaziland have a full, open, detailed debate about the kingdom’s economic future.

On the evidence so far we can’t expect the Swazi media to lead much of a meaningful debate.

See also
SWAZI MEDIA IGNORE ECONOMIC CRISIS