The African Development Bank (AfDB) has followed the IMF’s lead and withdrawn support for Swaziland.
The AfDB will not pay US$100 million (E800 million) budget support due to the kingdom, because Swaziland has failed to tackle problems with its economy.
Last month (April 2012), the International Monetary Fund (IMF) withdrew support for the Swazi Government’s plan for financial recovery, because Swaziland had failed to reign in public spending and had presented a national budget that took money away from education and poverty reduction and diverted it to other areas, widely understood to include spending on King Mswati III, sub-Saharan Africa’s last absolute monarch.
Majozi Sithole, Swaziland’s Finance Minister, said this week that the AfDB would not pay the annual E800 million budget support it had promised over three years because the government had not met targets it agreed with the IMF.
Sithole said that the government was now hoping to reduce its annual public service salary bill by E300 million, but he said this would be difficult as the government had already failed in a previous attempt to cut it by E241 million.
The Swazi Government would have received a ‘letter of comfort’ from the IMF if it had been able to control its economy, thereby enabling it to get loans from the AfDB and the World Bank.