Swaziland’s Prime Minister Barnabas Dlamini was not
telling the truth when he told Commonwealth Secretary-General Kamalesh Shama in
a speech that the kingdom’s economic recovery strategy was ‘proceeding to plan’.
In fact, the opposite is the case. The International Monetary
Fund (IMF) that had been supporting Dlamini and his government to put into
place its financial and economic recovery plan withdrew from Swaziland because
the government would not stick to it.
Dlamini told Shama at a dinner in his honour following a
visit to the kingdom, that Swaziland faced economic difficulties. But, he
added, ‘We have a Fiscal Adjustment Roadmap and an Economic Recovery Strategy
proceeding to plan.’
But that is not true. In April 2012 the IMF withdrew its
support for Swaziland’s economic recovery plan. The IMF had been working since
2010 closely with the Swazi Government supporting its ‘fiscal
adjustment roadmap (FAR)’ – a plan for recovery that included getting more
revenue through taxes and reducing the public sector wage bill.
The Swazi Government drew up the plan and was aided by
the IMF in its implementation through a procedure known as the staff-monitored
programme.
But, even though the FAR was the work of the Swazi
Government and was completely under its control, the government failed
abysmally to implement it.
Central to the plan was to reduce the public sector wage
bill – that of teachers, nurses and other civil servants – by 10 percent. This
it failed to do.
Joannes
Mongardini, head of the IMF mission to Swaziland, confirmed that it was no longer
working with Swaziland on the staff-monitored programme. He said in April, ‘Government
has yet to propose a credible reform programme that could be supported by a new
IMF Staff-Monitored Programme.’
He added that the national budget announced in February 2012 included, ‘recurrent expenditures that are higher than what can sustainably be financed over the medium term’.
He said the budget did not provide sufficient resources
to repay all domestic arrears.
‘Finally, the budget allocates an increasing share of
resources to some sectors at the expense of education and health,’ he said.
Swaziland sought the help of the IMF because it was
nearly broke and needed loans from international banks, such as the African
Development Bank and World Bank, to survive. It could not get these loans until
it proved its economy was in order and IMF support in the form of a ‘letter of
comfort’ would enable it to do this.
Following the IMF withdrawal, the African Development Bank
said it would not pay US$100 million (E800 million) budget support due to the
kingdom, because Swaziland has failed to tackle problems with its economy.
Prime Minister Dlamini’s dishonesty with the Commonwealth
Secretary-General is nothing new. In
April 2011 he called a press conference to announce that he had received the
letter of comfort from the IMF that would allow Swaziland to get loans from
international banks. The news was greeted as a triumph and published all over the
world.
But it was not true. There was no IMF support and the
Swazi economy has declined even further since then.
See also
SWAZI ECONOMY SET TO HIT ROCKS
SWAZILAND LOSES MORE BUDGET SUPPORT
IS IMF LETTER LOST IN THE POST?
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