Despite finding US$30
million to buy the kingdom’s absolute monarch King Mswati III a second private
plane, earmarking E1.5bn (US$125m) this year to build a conference centre and
five-star hotel to host the
African Union summit in 2020 that will last only eight days, budgeting
E5.5 million to build Prime Minister Barnabas Dlamini a retirement house, and
planning for a new parliament building that will cost E2.3 billion, the Finance
Minister of Swaziland / Eswatini Martin Dlamini has publicly admitted the
kingdom is broke.
He told parliament that
there was not enough money to pay public servants’ salaries or to pay government
suppliers and things were set to get worse.
This was despite the
government in the March 2018 budget increasing
Value Added Tax (VAT) by 1 percent to 15 percent, increasing electricity
tariffs and freezing pensions for people aged 60 and over.
The Swazi Observer newspaper reported on Friday (15 June
2018) that Dlamini highlighted three main areas of budget spending: salaries (E7.7 billion),
transfers to government-subvented enterprises (E5.8 billion), and statutory
expenditure including debt service (E2.3 billion) that added up to E16 billion.
This accounted for the total amount of revenue available to the government, he said.
The
newspaper added, ‘The projected cashflow deficit by the end of the present
financial year would be E7.1 billion. As at March 31, 2018, government arrears
stood at E3.28 billion.’
Dlamini
said budget projections indicated ‘exponential growth in the arrears,’ the Observer reported. He added that issuing
government bonds to get more cash was unlikely to improve the situation.
The cash balance at the end of the first quarter of the financial year was expected to be negative and continue growing, despite the receipt of Southern Africa Customs Union (SACU) revenue at the start of each quarter.
The cash balance at the end of the first quarter of the financial year was expected to be negative and continue growing, despite the receipt of Southern Africa Customs Union (SACU) revenue at the start of each quarter.
The Observer reported, ‘Dlamini further
mentioned that government’s cashflow position had an enormous impact on the
payment of government’s trading partners, including suppliers and contractors,
as well as government’s overall ability to meet its priority expenditure
obligations such as salaries, debt service, statutory payments and transfers.
‘For the
month of June alone, a total of E1.1 billion was required to settle priority
expenditure that could not be postponed. Of this amount, E702 million was for
June salaries (including payment of on-call allowances of E56 million), E363
million was for outstanding deductions for pensions and cooperatives due in May
2018.’
It added,
‘Dlamini said it was essential that government reduced its spending to
financeable levels by identifying areas for possible cuts and cost-saving.’
Despite
the financial crisis King Mswati, who rules Swaziland as sub-Saharan Africa’s
last absolute monarch, continues to live a lavish lifestyle.
On Monday last week King Mswati received
gifts of furniture made of gold and at least E15 million in cheques to mark
his 50th birthday that fell on 19 April 2018. On
that day he wore a watch
worth US$1.6 million and a suit weighing
6 kg studded with diamonds. Days earlier he had taken delivery of
his second private jet. This one, an Airbus A340, cost US$13.2 to purchase but
with VIP upgrades
was estimated to have cost US$30 million.
He also has thirteen palaces and fleets of top-of-the-range
BMW and Mercedes cars.
Meanwhile, seven in ten of the 1.1 million population
live in abject poverty with incomes less than the equivalent of US$2 per day.
The global charity Oxfam named Swaziland as the most unequal country in the
world in a report
that detailed the differences in countries between the top most earners and
those at the bottom.
Last week it was reported that children
collapsed with hunger in their school because the government had not paid
for food for them. The kingdom had previously been warned to expect
children to starve because the Swazi Government had not paid its suppliers
for the food that is distributed free of charge at schools. The shortage is
reported to be widespread across the kingdom.
Medicines,
including vaccines against polio and tuberculosis
have run out in many government hospitals and clinics because drug suppliers
have not been paid. In June 2017, Senator Prince Kekela told
parliament that at least five people had
died as a result of the drug shortages. About US$18
million was reportedly owed to drug companies in May 2017.
See also
KING
EATS OFF GOLD, CHILDREN STARVING
MEDICINE SHORTAGE: FIVE DIE
SWAZI
BUDGET A TALE OF WOE
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