The report in the Swazi Observer yesterday (11 March 2011) that the African Development Bank (ADB) is ‘is ready to provide government with financial assistance to close its deficit’, is wide of the mark.
The Observer, a newspaper in effect owned by King Mswati III, sub-Saharan Africa’s last absolute monarch, reported ADB President Donald Kaberuka saying this.
But, according to the ADB itself, what Kaberuka actually said was the bank wanted to encourage the government in its plans for financial reform.
According to a statement from the bank, Kaberuka said, ‘The current state of public finances [in Swaziland] is not sustainable.’
The statement continued, ‘He commended the introduction of the Autonomous Revenue Authority and expenditure measure under discussion with the international institutions. The President reaffirmed that the African Development Bank was prepared to fund such a plan and work with Authorities to that end.’
It added, ‘The President encouraged the authorities to quicken and deepen the pace of fiscal reforms by significant expenditure cuts and revenue generation.’
Kaberuka has been in Swaziland this week.
Swaziland is seeking a $US75 million (E525 million) loan from the ADB and has been in protracted talks with the International Monetary Fund (IMF) for a letter of support. Without the letter, Swaziland cannot have the loan.
The IMF has suggested a number of measures the Swaziland Government could make to improve its finances and it is now waiting for the government to decide what it wants to do.
The support (if it comes) from the IMF and the ADB is still a considerable way off in the future.