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Saturday, 19 February 2011

SWAZILAND BUDGET FAILS THE POOR

We were promised a ‘pro poor’ budget by Swaziland’s Finance Minister Majozi Sithole – but we didn’t get it.


When you strip away the weasel words from the budget statement yesterday (18 February 2011), you are left with one inescapable fact: the Swaziland Government is unable to tackle poverty in Swaziland.


Sithole told the Times of Swaziland, an independent newspaper in the kingdom, this week, ‘The budget to be presented will target mainly the poor. We have put priority on the poor. We have made priorities based on the publics’ needs. The situation is not entirely bad but government must return to a position where there is money to do the things initially budgeted for.’


But that’s not what he delivered. By Sithole’s own admission in his speech, ‘The Ministry of Economic Planning and Development has stated that our economy must grow at least by 5% each year to ensure Government is able to alleviate poverty.’


But Sithole could offer nothing to the kingdom except a promise of a ‘bleak’ future.


He said in his speech, ‘Preliminary estimates reflect that overall gross domestic product will grow by 2.0 % in 2010 after a sluggish growth of 1.2 % in 2009. It is further expected to pickup in 2011, expanding by 3.3 % as economic activity continues to recover. However with the global growth likely to remain weak, a bleak outlook is anticipated especially on the high unemployment levels which are expected to persist for several years, thus the need for decisive action and crucial policy adjustments to cater for jobs creation.’


So 2 percent growth, maybe. And 3.3 percent if you’re lucky. At least Sithole is more realistic than King Mswati III, sub-Saharan Africa’s last absolute monarch, who said in his own speech at the opening of parliament two weeks ago, Swaziland can ‘double our national output.’ That’s double, as in have 100 percent growth.


Employment prospects in Swaziland are abysmal. In the past year Sithole counted 3,900 job losses (that’s the ones he knows about). The much lauded (by the Swazi Government, anyway) Swaziland Investment Promotion Authority (SIPA) was able to create 2,655 jobs between January and December 2010 through foreign direct investment (FDI). That’s a net loss of 1,245 jobs.


And those calculations don’t include the 7,000 jobs that the government says it will cut from the public service.


So where are new jobs coming from? Sithole said, ‘SIPA seeks to foster linkages between FDI [foreign direct investment] and domestic SMEs [small and medium enterprises] with a target of 1,000 jobs created by local SMEs.’ Not enough: nowhere near enough.


The reliance on FDI is misguided since recent history tells us that Swaziland has failed to attract any FDI worth the name – and what little it gets tends to be for textile factories, offering sweatshop conditions.


And this is the rest of Sithole’s plan for jobs, as set out yesterday:


- Improve governance so as to build investor confidence and allow for greater transparency and accountability;
- Improve the export base and facilitate increased participation of the Small and Medium Enterprises (SME) sector in international trade; and
- Attract foreign direct investment (FDI) and provide support for the development and the involvement of domestic investors in the manufacturing and other businesses.


All of these things have been tried in the past and failed. So what’s different now? The sad, inevitable answer is: Nothing.


Finance Minister Sithole and the Swaziland Government cannot come up with an original idea between them. They got us into this mess and they have no idea how to get us out of it.


Expect more of the same in the year ahead.

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