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Wednesday, 2 March 2011

IMF STILL NOT BACKING SWAZI LOAN

The International Monetary Fund (IMF) delegation that left the kingdom today (2 March 2011) is still not backing Swaziland’s bid for a loan to help it out of its economic crisis.


It says it might return to monitor any progress the Swazi Government is making in repairing the economy.


The government wants a $US75 million (E525 million) loan from the African Development Bank (ADB) and needs a letter of support from the IMF, but the IMF does not yet have full confidence that the Swazi Government is doing the right things to put the economy on track.


In a media statement, the IMF said once ‘a number of prior [unspecified] actions are implemented’ by the Swazi Government it could possibly return to Swaziland to monitor the government’s progress on the economy.


In the statement, Joannes Mongardini, the leader of the IMF delegation to Swaziland, said the Swazi Government was being optimistic about the amount of money it could raise in taxes in the coming year.


He also said Swaziland was in economic difficulties because of a large government deficit, partly caused by ‘a 4.5 percent unbudgeted wage increase granted to civil servants and politicians in April 2010’ and the E350 million (US$50 million) extra allocated to the building of Sikhuphe International Airport in November 2010. This was on top of the reduction in money Swaziland received from the Southern African Customs Union (SACU).


He said the government was paying for the deficit by taking government deposits at the central bank, domestic borrowing, and by not paying its bills.


Meanwhile, in a separate development, it is reported in the Swaziland media that the IMF has called on the government to cut salaries for civil servants. The proposal is for a 10 percent cut for people earning E300,000 and above per year; an 8 percent cut for those earning from E200,000 to E299,999 and a 6 percent cut for those earning from E100,000 to E199,999. Those earning less than E100,000 will not have their salaries cut.


It is not reported whether these cuts should also apply to the prime minister, government ministers, MPs and political appointments.


See also


WHY THE IMF MUST DITCH SWAZILAND

http://swazimedia.blogspot.com/2011/02/why-imf-must-ditch-swaziland.html


GOVERNMENT TO BLAME FOR JOB CUTS

http://swazimedia.blogspot.com/2011/02/government-to-blame-for-job-cuts.html

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