The International Monetary Fund (IMF) delegation to Swaziland has told the Swazi Government some home truths about the economic mess in the kingdom.
Top of the list is that the crisis is of the government’s own making and it is its responsibility - and not the IMF’s - to get Swaziland out of it. The government makes the decisions, the only thing the IMF can do is to give advice, Joannes Mongardini, the head of the IMF delegation to Swaziland, said.
‘It is up to the government to decide on the ways through which it wants to adjust. We are advising the government to adjust for the next three years,’ he said.
He went on, ‘We prescribe the solution and it is up to the patient to comply. You can only help a friend if he wants to be helped. But government is now beginning to understand the situation and seeking our advice.’
Mongardini revealed that it was the Swazi Government that had wanted to cut 7,000 civil servants’ jobs, and not the IMF. The IMF advised the government wage bill should be cut by 5 per cent; how that was done was up to the government.
‘We have advised that it’s better to reduce salaries than to cut employment. The large cuts should come from the top,’ Mongardini said.
This news surprised many people since the Swazi Government had allowed us to believe the jobs cuts were forced upon it by the IMF.
‘Government proposed the 7 000 job cuts, not us. Government came to us with the FAR [Government’s proposals for getting out of the economic mess] and we said we were willing to help. This is a home-grown solution,’ Mongardini said.
The IMF prefers that the savings should come from wage cuts from top earners. When you realise that those earning the most are the Swaziland Prime Minister, his deputy, cabinet ministers and members of parliament, you can see why the government prefers to see jobs cuts so that other people suffer and not themselves.
The IMF also said Tibiyo TakaNgwane should pay tax. Tibiyo was created by Royal Charter in August 1968 by King Sobhuza II. According to the Times of Swaziland, the only independent daily newspaper in the kingdom, at the time of formation it was said that it was being created for government’s national development efforts.
Tibiyo owns the Swazi Observer and many investments in property, agriculture and other industries.
What the Times didn’t tell us is that these days the money generated from Tibiyo goes to King Mswati III, sub-Saharan Africa’s last absolute monarch, so the chances of it ever being taxed are remote indeed.
The IMF left Swaziland this week and promised to return soon if there were signs that the Swaziland Government was making a real effort to solve the economic crisis.
It wants to see progress on collecting taxes, reducing the wage bill and abolishing the government’s budgeting and planning committee. If these things are in place by June it is possible that later in 2011 the IMF would support Swaziland’s application to the African Development Bank (ADB) for a $US75 million (E525 million) loan.
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