SWAZILAND LENDS MONEY TO ITSELF

Would you lend Majozi Sithole, the hapless Finance Minister of Swaziland, E5 billion?

If you consider his dire record of economic mismanagement in the ten years he has held the job, the answer should surely be: No.

But that hasn’t stopped the Swaziland Central Bank doing just that.

Sithole had to rush to the Swazi Parliament yesterday (4 November 2010) to get an emergency order to get the money. Without it the government can’t pay its bills and public servants won’t be paid.

The E5 billion (about 730 million US dollars) is reported to be about the equivalent of 25 percent of the kingdom’s gross domestic product.

Sithole has been trying to stop Swaziland’s economy from going bankrupt and everything he has tried so far has failed. No one wants to invest in the kingdom, ruled by King Mswati III, sub-Saharan Africa’s last absolute monarch, and Sithole is finding it difficult to get loans (even from banks set up with the specific task of helping developing nations).

A delegation from the International Monetary Fund (IMF) is currently in Swaziland going through the books to see whether the kingdom is worth bailing out.

Sithole reportedly told parliament that the money from the Central Bank was urgently needed if the government was to continue to operate and finance the public service.

Sithole said the government had ‘no cash flow’, which in plain English means it has run out of cash.