The Swaziland Government should reverse its decision to give ministers and MPs salary increases, to save the Swazi economy, according to a report from the International Monetary Fund (IMF).
The salary increases pledged to civil servants should also be abandoned, if the kingdom is to survive.
And on top of this the government needs to cut back on public expenditure.
The latest warning from the IMF issued on Wednesday (2 December 2009) comes after its team visited Swaziland. According to the IMF the discussions it had with ministers and others was aimed at finding ways to stabilise the Swaziland economy, which as anyone who has been paying attention will know, is on the brink of disaster.
IMF said in a statement that Swaziland has been struggling in the world economy and the cutback in revenue from the Southern African Customs Union (SACU) which in the context of high spending levels, is posing serious risk to medium-term fiscal sustainability’.
Economic activity is sluggish in 2009 and the economic outlook is not good, the IMF said.
The IMF said the Swazi Government needed to educate the public on the need for public spending cuts. Without these, the IMF says, Swaziland will have ‘unsustainable debt levels’. One figure mentioned was that Swaziland’s debt could soon reach 77 percent of gross domestic product (GDP).
The IMF called for immediate public spending cuts ‘in particular, the recent across-the-board salary increases, which are unsustainable given the sharp and permanent drop in SACU revenue, need to be revisited’.
The Swazi Government also needs to shift the public expenditure the kingdom can afford to ‘critical social programs, including investment in human capital and expenditures that foster economic growth’.
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