The following is a statement from the Swaziland Solidarity Network concerning the melt down in the economy of Swaziland.
SWAZILAND INCREASES ITS WAGE BILL DESPITE ECONOMIC MELT DOWN
18th October 2010
In a move that is bound to lower Swaziland’s standing in the eyes of international financial institutions and infuriate the country’s labour unions, the country’s government has released a circular which aims to increase the number of people on its pay roll and the salaries of its politicians. As reported in the Times of Swaziland this circular, which was backdated to the 1st of April 2010, was issued in a press statement released by the Prime Minister’s office on the 14th of October.
This is Finance Circular No.1 of 2010, which replaces Finance Circular No.2 of 2009 which was rejected by parliamentarians who felt that cabinet ministers had been given higher salary increments than themselves. As a result of this disagreement between Swaziland’s politicians, a joint committee comprising cabinet ministers and ordinary members of parliament was tasked to review the initial circular with the objective of finding a compromise. The compromise between the two parties has seen both parties’ aggregate salaries being increased while introducing a plan to give former Prime Ministers a lump sum amounting to half their annual salaries and a monthly pension for the rest of their lives.
When quizzed about this circular, the Minister of Finance, Majozi Sithole, further explained that the money to be paid out to former Prime Ministers will depend on their sources of income after leaving office. In this regard a former Prime Minister who is unemployed will be given a monthly salary of E10 000 while those who are employed will presumably receive less. Moreover, in the event that a former Prime minister passes away, his spouse is to be paid E5000 for the rest of her life. This is a significant amount of money as four former Prime Ministers are still alive to receive this gift from the government.
It is interesting to note that this comes only a few weeks after the government sought a loan of E525 million (US$75m) from the African Development Bank only to be told that it would only receive it if the World Bank approved the country’s capacity to repay the loan. This in itself is compounded by the fact that for many years the World Bank and the International Monetary Fund have been advising the country to reduce its excessive expenditure which comprises Royal expenditure and an unsustainable wage bill. A further crippling factor is that the recent reduction in the country’s revenue as a result its reduced SACU (Southern African Customs Union) has left the country in desperate need of finances and it is estimated that in future it will be forced to dig into its reserves in order to pay its civil servants. Upon depletion of these reserves the country will not be able to sustain itself.
Without any fiscal reforms in place, as shown by the increases in cabinet and parliament salaries, the country is doomed to not only being denied a loan by the African Development Bank but also eventual economic collapse. This will further worsen the plight of the country’s poorest citizens.
Issued by the Swaziland Solidarity Network [SSN]- South Africa Chapter
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