Coronavirus badly hits Swaziland economy, could take years to recover: Finance Minister

The coronavirus pandemic has hit the Swaziland (eSwatini) economy hard and there is a danger that it will not easily recover over the coming years, Finance Minister Neal Rijkenberg warned in his budget speech.

He told the Swazi Parliament on Friday (26 February 2020) that the ‘widespread effects’ of coronavirus (COVID-19) on the economy had ‘significantly and permanently altered the course’ of the government’s economic plans.

Looking forward, he said, ‘If we do not get the basics right, we will remain in an unsustainable fiscal position and we will see the effects of the pandemic persist over the medium term. This will negatively affect each and every Liswati due to stagnating economic growth, subdued employment creation, lower revenue receipts and higher debt-servicing costs.’

He added, revenues were predicted to decline ‘significantly and steadily over the medium term’. He said, ‘the next three years are going to be even tougher’.

He told Parliament, ‘As we are focusing on growing out of this situation we are in, we need to ensure that government is as effective as possible, doing as much as possible with minimum resources.’

He said, ‘In the domestic economy, the coronavirus pandemic accelerated an economic and fiscal deterioration that was already under way. The lockdowns and weak external demand are expected to have triggered an economic recession in 2020 as economic output is expected to contract by 2.4 percent compared to a growth of 2.2 percent recorded in 2019. The lockdowns effected since mid-March are expected to have impacted domestic demand, particularly manufacturing, tourism, construction and other trade sectors.’

 

See also

‘Urgent action needed to save lives’ as hunger grips Swaziland

https://swazimedia.blogspot.com/2021/02/urgent-action-needed-to-save-lives-as.html

Swaziland coronavirus recovery in jeopardy as purchase of vaccine halted

https://swazimedia.blogspot.com/2021/02/swaziland-coronavirus-recovery-in.html

IMF gives Swaziland emergency coronavirus loan but is only half what is needed

The International Monetary Fund has approved a loan of US$110 million to help Swaziland (eSwatini) as it grapples with the coronavirus crisis.

The Swazi Government had earlier said the coronavirus (COVOD-19) pandemic had devasted the economy and it would be US$207 million short of the budget funds it needed for the present financial year.

It applied to the IMF’s Rapid Financing Instrument scheme.

Announcing the assistance the IMF said, ‘The COVID-19 pandemic has magnified eSwatini’s existing economic and social challenges, leading to a sharp decline in growth and large financing needs.’

The announcement was made on Wednesday (29 July 2020).

The IMF added, ‘The immediate priority is to support public health, vulnerable groups and businesses. Once the impact of the pandemic subsides, it is critical to implement the authorities’ fiscal consolidation plan and structural and governance reforms to ensure debt sustainability and achieve a fast and inclusive recovery.’

The IMF said Swaziland’s economy already faced ‘deep economic and social challenges’ before the coronavirus crisis hit the kingdom in March. Swaziland has been on partial lockdown since then. 

The IMF said, ‘Before the pandemic, growth was subdued, the fiscal deficit and public debt were rising, and international reserves declining, amid elevated unemployment and widespread poverty. The pandemic has resulted in a sharp decline in growth and generated large financing needs, magnifying these challenges.’

The coronavirus crisis is worsening in Swaziland. On Wednesday the Ministry of Health announced a record number of positive cases of 147 in a single day. There have been 40 deaths, half of them in the past 14 days. In total 2,551 people have tested positive.

See also

IMF reports Swaziland public debt rising, foreign reserves fallen ‘below adequate levels’

https://swazimedia.blogspot.com/2020/02/imf-reports-swaziland-public-debt.html

Swaziland seeks US$207m IMF loan to save sinking economy as coronavirus worsens

Swaziland (eSwatini) is seeking US$207 million from the International Monetary Fund as its economy continues to slide because of the coronavirus pandemic.

Swazi Finance Minister Neal Rijkenberg said the money was needed ‘to cushion the budget and help address urgent balance of payment needs’ created by the coronavirus (COVID-19) crisis.

Swaziland is already in recession and international trade and tax collections within the kingdom have been badly hit since March 2020 when many businesses were forced to lockdown.

In a statement on Tuesday (28 July 2020) Rijkenberg said Swaziland would seek the money from the IMF’s Rapid Financing Instrument (RFI) which had been set up to help countries to help counter the effects of coronavirus.

Rijkenberg said the coronavirus crisis had ‘severely affected eSwatini’s economy, exacerbating pre-existing economic challenges’ which had led to ‘a significant contraction in economic activity’. 

As of 27 July 2020 the Ministry of Health had reported 2,316 positive cases of coronavirus in Swaziland and 24 deaths. 

He added the government had been forced to spend money on a package of measures to tackle the coronavirus crisis that it had not budgeted for. He said, ‘The package includes additional health spending, ramped up food assistance programs, increased social protection transfers and improved access to water and sanitation facilities for the vulnerable. To accommodate this additional expenditure, additional resources have had to be mobilised, which would have worsened Government’s fiscal position, which had already been in a precarious state prior to the emergence of the scourge.’

The US$207 million represents 5.3 percent of Swaziland’s GDP. Rijkenberg said the request would be presented to the IMF Board before the end of this week and the outcome would be communicated soon thereafter.

Separately, also on Tuesday it was reported that the Labour Commissioner, Mthunzi Shabangu’s office had received requests from 105 different companies to retrench 14,048 workers who were presently on unpaid layoffs. Companies said they could no longer afford to pay employees. Labour Advisory Board discussions are expected to take place on Friday.

The IMF rules for receiving the RFI loan include that the country ‘is required to cooperate with the IMF to make efforts to solve its balance of payments difficulties and to describe the general economic policies that it proposes to follow. Prior actions may be required where warranted.’

In February 2020 before the coronavirus pandemic hit Swaziland the IMF reported the kingdom’s economy continued to be in free-fall. Public debt was still rising, domestic arrears had grown, and international currency reserves had fallen ‘below adequate levels’.

The IMF reported, ‘Economic indicators are expected to remain weak. GDP growth [the total value of goods and services in the kingdom] is projected to temporarily pick up in 2020, as the government plans to repay some arrears, but growth would be subdued afterwards as fiscal imbalances persist and the private sector remains hamstrung.’

The IMF predicted the government’s deficit was expected to remain large and public debt would rise to above 60 percent of GDP over the medium-term and contribute to further reduce international currency reserves.

See also

IMF reports Swaziland public debt rising, foreign reserves fallen ‘below adequate levels’

https://swazimedia.blogspot.com/2020/02/imf-reports-swaziland-public-debt.html

Swaziland hospitals close to overwhelmed by coronavirus, says Heath Minister

https://swazimedia.blogspot.com/2020/07/swaziland-hospitals-close-to.html

Swaziland to increase spending on internal security as prodemocracy groups continue protests

Swaziland (eSwatini) ruled by absolute monarch King Mswati III is to spend more money on national security in the coming year, the Swazi Finance Minister Neal Rijkenberg announced in his annual budget.

Prodemocracy campaigners have been active in recent years and police and security forces have used violence to break up legal demonstrations.

Rijkenberg did not put a figure on the additional expenditure in his speech on Friday (14 February 2020). 

He told the Swazi Parliament, ‘Support to our security forces as we pursue economic stability and growth in the country is key to sustainable development of our nation. This budget seeks to strengthen public order management and state security systems which are important factors in ensuring that the country’s safety and security landscape is conducive for investment.’

The security forces include the army, police force and correctional services.

In recent years police and other security services have been criticised outside the kingdom for their brutal attacks on legal demonstrations. Swaziland is not a democracy and political parties are barred from taking part in elections. Groups advocating for democracy are banned under the Suppression of Terrorism Act.

In Swaziland the King chooses the Prime Minister and cabinet ministers. He also picks senior judges and senior civil servants. 

Following elections in 2018, King Mswati appointed eight members of his Royal Family to the kingdom’s 30-member Senate and another six to the House of Assembly.

Freedom House scored Swaziland 16 out of a possible 100 points in its Freedom in the World 2019 report. It concluded that Swaziland was ‘not free’.

In September 2019 police had used teargas, rubber bullets, water cannon and live ammunition during a strike by public servants. At least 15 people were injured. The violence happened in Mbabane after what local media called ‘a long day of peaceful protest’. The police brutality was condemned by international human rights observers.

In September 2018 the Swazi Police were criticised by human rights groups when they attacked workers led by the Trades Union Congress of Swaziland (TUCOSWA) who were demonstrating in Manzini for salary increases, a national minimum wage and an increase in elderly grants (pensions). Police used teargas and stun-grenades. 

Videos and photographs of brutal police attacks were uploaded on social media.

Swaziland Human Rights Network UK in a statement at the time said, ‘The violent attack on peacefully demonstrating TUCOSWA members is reprehensible as it was a violation of their constitutional right to freedom of assembly and expression.’

It added, ‘The eSwatini government has turned the country into a violent police state where the security services have been turned into tools of suppression to protect the interests of not just the government but the regime of King Mswati III.’ 

The Swaziland National Association of Teachers (SNAT) said in its statement following the budget speech, ‘This means labour unions and other civil society organisations shall be silenced, violently so and no voices of dissent will be allowed. Citizens must keep quiet, toe the line and that equals to peace, money has been set aside to procure guns and all sorts of artillery for that exercise. This is what dictatorships are known for, world over.’

See also

Swaziland police fire rubber bullets and teargas injuring 15 during national strike

https://swazimedia.blogspot.com/2019/09/swaziland-police-fire-rubber-bullets.html

Swaziland democracy leaders call on absolute monarch to arrange talks for political change

https://swazimedia.blogspot.com/2019/12/swaziland-democracy-leaders-call-on.html

IMF reports Swaziland public debt rising, foreign reserves fallen ‘below adequate levels’

The economy in Swaziland (eSwatini) continues in free-fall. Public debt is still rising, domestic arrears have grown, and international currency reserves have fallen ‘below adequate levels,’ the International Monetary Fund (IMF) reported.

The growth in private investment is slowing and declining external competitiveness is hindering the kingdom’s growth prospects. Now, 40 percent of the population is living in extreme poverty and unemployment is high.

The IMF report published on Tuesday (11 February 2020) came after the group’s latest visit to the kingdom ruled by absolute monarch King Mswati III.

The IMF reported, ‘Economic indicators are expected to remain weak. GDP growth [the total value of goods and services in the kingdom] is projected to temporarily pick up in 2020, as the government plans to repay some arrears, but growth would be subdued afterwards as fiscal imbalances persist and the private sector remains hamstrung.’

The IMF predicted the government’s deficit was expected to remain large and public debt would rise to above 60 percent of GDP over the medium-term and contribute to further reduce international currency reserves.

Swaziland’s economy has been in freefall for many years. The government which is not elected by the people but handpicked by King Mswati has failed to pay its suppliers. Public services across the kingdom have ground to a halt with reports of people dying for lack of medicines and children going hungry because the government was unable to pay suppliers of meals for children.

Last week (5 February 2020) Swazi Minister of Finance, Neal Rijkenberg said government suppliers and service providers would have to wait six more weeks for their payments. The government had previously promised payments would be made by the end of January 2020. Previously, the deadline for payment had been set at the end of September 2019.

 

It is unclear how much the government owes and it has itself reported the figure as E4.2 billion and E2.2 billion.

Rijkenberg reported the Office of the Auditor General and the Office of Internal Audit were trying to verify how much was owed. 

In November 2019 the Swazi parliament approved a bill to allow government to seek a E2 billion loan  from the AFREXIM Bank to clear arrears and for other expenditure.

In 2017 Business Insider reported King Mswati had a net worth of US$200 million (about E3 billion in local Swazi currency). The King rules a population of about 1.3 million people and seven in ten of them live in abject poverty with incomes of less than E30 per day. 

See also

Swaziland breaks promise to pay off its suppliers to halt public services meltdown

https://swazimedia.blogspot.com/2019/10/swaziland-breaks-promise-to-pay-off-its.html

 

More deaths in Swaziland as government fails to pay medicine suppliers

https://swazimedia.blogspot.com/2019/05/more-deaths-in-swaziland-as-government.html
 

Swaziland schoolchildren learn under trees or in tents as government runs out of money

https://swazimedia.blogspot.com/2019/05/swaziland-schoolchildren-learn-under.html

King of impoverished Swaziland takes delivery of 79 luxury BMW cars worth US$6 million

King Mswati III, the absolute monarch of impoverished Swaziland (eSwatini), has taken delivery of 79 luxury BMW cars worth about US$6 million.

This happened a week after he took delivery of 15 Rolls-Royce cars.

The Sowetan newspaper in South Africa reported details of the purchase on Friday (8 November 2019).

It reported, ‘Yesterday, 12 trucks loaded with the latest model BMW X3 SUVs and BMW 540 sedans, mostly navy blue in colour and a handful of them in white, waited for hours in Carolina, about 100km from the Oshoek Swazi border post. The 12 trucks took almost the entire truck stop parking space in the small Mpumalanga town.

‘The spanking new fleet was transported from the BMW Rosslyn plant to Manzini in eSwatini in abnormal load trucks with some carrying as many as eight vehicles a truck.

‘An entry-level BMW X3 USV retails at more than R650,000 each [US$44,000], while the BMW 540 sedans retail for more than R1m each.

‘Although it's unclear what the intended use for the vehicles is, most of those navy blue were already fitted with roof top blue lights.’

The Swaziland News, an online publication, reported the cars would be used by escorts of the Swazi royal family.

The Times of eSwatini reported, ‘Sources claimed that a large number of BMWs would be delivered in the country and they would be used as escorts. They also claimed that government did not have the money to buy the cars upfront so it signed a letter of commitment but the claims could not be verified.’

The Sowetan reported that15 ultra-luxury Rolls Royce cars had been shipped into South Africa through the Durban port and delivered to the royal palace at Manzini, Swaziland, a week ago.

It added, Daytona, which was understood to have facilitated the importation of the king's Rolls-Royces, would not disclose any customer details or purchase information but confirmed it was the sole importer of Rolls-Royce motor cars in Southern Africa.

Minister of Finance Neal Rijkenberg refused to answer questions about the purchases in the House of Assembly, the Times reported.

Rijkenberg did say that Swaziland presently had a public debt of E18.6 billion (US$1.2bn). He had been trying to negotiate loans of E2 billion to pay suppliers. 

Public services across the kingdom are in meltdown. At least six children were reported to have died  from diarrhoea in August 2019. Drugs to treat them were unavailable.

In August 2019 the Ministry of Health confirmed in its first quarter performance report delivered to the Swazi parliament that drugs had run out and there were shortages of nurses, midwives and other health professionals. Fuel frequently ran out and ambulances and other vehicles had broken down.

The government has not paid schools fees and support staff have been sacked as a result. Teaching supplies have run out and in some school pupils have been without a teacher for more than a year. Some programmes to feed destitute children at school have been stopped because of lack of funding.

About seven in ten of the estimated 1.3 million population live on incomes less than the equivalent of US$2 per day. On the day news broke of the king’s multi-million dollar purchase it was announced that bread prices would rise.  

 

Some of the BMW cars purchased being transported to King Mswati. Picture souced from Facebook.

 

 

Front page of the Sowetan newspaper

See also

Absolute King of impoverished Swaziland buys himself and wives 20 Rolls-Royce cars worth $15 million

https://swazimedia.blogspot.com/2019/11/absolute-king-of-impoverished-swaziland.html

Swaziland cancer patients refused treatment because Govt. has not paid hospital bills

https://swazimedia.blogspot.com/2019/07/swaziland-cancer-patients-refused.html

 

More deaths in Swaziland as govt fails to pay medicine suppliers

https://swazimedia.blogspot.com/2019/05/more-deaths-in-swaziland-as-government.html

Swaziland breaks promise to pay off its suppliers to halt public services meltdown

The Swaziland (eSwatini) Government failed to meet its promise to repay E3billon (US$200 million) its owes to suppliers by the end of September 2019.

Public services, especially in heath and schools, are in crisis because businesses are refusing to provide goods and services until their bills are paid.

The government has failed to secure loans to settle the arrears. The failure is a significant setback to the government that was not elected but handpicked by absolute monarch King Mswati III.

After it came into power following the September 2018 election it pledged to get the ailing economy back on track.

The Times of eSwatini, the only independent daily newspaper in the kingdom, reported, ‘When asked whether they had been able to meet the September deadline as earlier promised, Ministry of Finance Communications Officer Setsabile Dlamini could only say: “raising money for the settling of arrears is work in progress. However, it still has to go through Parliament.”’

Dlamini added, ‘Government was engaging a number of financiers, both local and external, with a view to pay up the arrears with intent to ultimately bolster eSwatini’s economy for the better.’

The Times reported, ‘Dlamini assured that a detailed austerity measures report would be issued soon.’

It added ‘In his presentation of the integrated annual report, Central Bank of Eswatini Governor Majozi Sithole further noted that the economic activity was projected to decelerate to 1.4 per cent in 2019 from 2.4 per cent in 2018.’

This contradicts a statement by Finance Minister Neal Rijkenberg who as recently as September 2019 told the African Development Bank, ‘We believe there’s not a problem we can’t solve … We believe that we’ve turned a corner. The indicators … are turning from an unsustainable future to a sustainable future.’

In June 2019, he told newspaper editors in the kingdom, ‘Government is working on proposals to financiers to secure funding of arrears of around E3billion as at 31st March 2019. It is important to note that payment of suppliers is an ongoing process, payments have never stopped, we pay as and when revenue is received.’

Meanwhile, the Swazi Government continues to insist that it does not have the money to pay public servants 7.8 percent cost-of-living salary increases. Unions have been striking for more pay while the government has offered zero percent.

Public services across the kingdom have ground to a halt with reports of people dying for lack of medicines and children going hungry because the government was unable to pay suppliers of meals for children.

In 2017 King Mswati was named the third wealthiest King in Africa by the international website Business Insider. It reported he had a net worth of US$200 million (about E3 billion in local Swazi currency). The King rules a population of about 1.3 million people and seven in ten of them live in abject poverty with incomes of less than E30 per day. 

King Mswati and his family live a lavish lifestyle, at the expense of the people of Swaziland. 

The Swazi Government paid US$30 million to buy the King a private jet plane in 2018. King Mswati now has two private planes, 13 palaces and fleets of top-of-the-range BMW and Mercedes cars. He wore a watch worth US$1.6 million and a suit beaded with diamonds weighing 6 kg, at his 50th birthday party in April 2018. He received E15 million (US$1.2 million) in cheques, a gold dining room suite and a gold lounge suite among his birthday gifts. 

His family regularly travel the world on shopping trips spending millions of dollars each time.

Meanwhile, the World Food Program said it could not raise the US$1.1 million it needed to feed starving children in the kingdom.

See also

More deaths in Swaziland as government fails to pay medicine suppliers

https://swazimedia.blogspot.com/2019/05/more-deaths-in-swaziland-as-government.html

 

Swaziland schoolchildren learn under trees or in tents as government runs out of money

https://swazimedia.blogspot.com/2019/05/swaziland-schoolchildren-learn-under.html

Swaziland Govt wage bill chaos as Auditor General reveals error and fraud

In his budget speech Neal Rijkenberg the Finance Minister of Swaziland / eSwatini stated that public service salaries had risen by 125 percent in the past 10 years and he threatened to cut the kingdom’s wage bill. He said the kingdom could not afford to pay cost of living salary adjustments (CoLA).

Now, the Swaziland Auditor General (AG) Timothy Matsebula in his annual report has revealed that the government has no clear idea how much money it is legitimately paying out in salaries. Matsebula reported in the year ending March 2018 the government overpaid its workers by E6.2 million and a further E1.9 million was paid to ‘ghost employees’ – that is workers who do not exist.

He also said that it was impossible to tell how many ghost workers there were in schools across Swaziland.

The AG reported the overpayments were made across a number of government departments. 

The AG stated there was a total loss from public servants of E3.44 million and E15.74 million in the financial years 2017 and 2018 respectively. The figure for 2018 included more than E6 million in unrecovered loans made to civil servants. 

The AG stated, ‘These include salary payment of “ghost employees”, overpayment of salaries, non-staggering of salaries for employees on long-term study leave, unrecovered reimbursement of salary and training costs from officers who have abandoned official training, and unrecovered loans. The salary payment of “ghost employees” comprises of payment of salaries for people who have resigned or exited the public service, employees who have not been reporting for work and/or employees who were suspended for a lengthy period.’

The AG said financial controls were ‘weak’ and risked ‘embezzlement and fraud’. He added, ‘ghost-employees or fictitious employees are included in the payroll system and continue being paid for an extended period of time until they are uncovered or may remain uncovered until retirement age’.

The AG also reported that at schools across Swaziland teachers were not regularly signing registers when collecting their salary advice slips and ‘this poses a risk as it makes it hard to see the presence of “ghost” employee(s)’. This means the number of ghost workers in Swaziland is not known. 

This chaos in government is going on at the same time that Finance Minister is threatening to cut the public sector salary bill. In his budget speech in February 2019 Finance Minister Rijkenberg said, ‘Our growing wage bill is placing insurmountable pressure on our budget and Government has been under immense strain to pay salaries due to the cash flow crisis.’

He added, ‘Given the state of the economy, it is not prudent or possible to budget for a CoLA in 2019/20, as the country simply cannot afford it.’

He said paying the salary increase would contribute to the kingdom’s debts. If debt increased, he said, ‘we will have no option but to cut the wage bill’. He did not give details but it would mean either cuts in salaries or job losses (or both).

Rijkenberg made his bold statement without knowing what the true public sector wage bill is in Swaziland. 

AG Matsebula also reported the Swaziland Government finances were in such a mess that billions of emalangeni could not be accounted for. Government bank balances had been misstated by E1.3 billion. The amount of revenue collected in the kingdom was misstated by E1.35 billion. The amount of income tax and road toll collected was understated by E1.34 billion.

The amount of government financial liabilities was misstated by E13 billion. He stated this could be down to fraud or error.

The AG report is revealing the truth in Swaziland where King Mswati III rules as an absolute monarch and appoints members of the government and top public servants and where political parties are banned from taking part in elections. The kingdom is in chaos and nobody knows where the money is going. 

Public sector workers should not be blamed for the crisis.

Richard Rooney

See also

Billions unaccounted for in Swaziland Govt finances, Auditor General reports

https://swazimedia.blogspot.com/2019/03/billions-unaccounted-for-in-swaziland.html

 

Swaziland Finance Minister threatens public sector job cuts if workers don’t back his budget

https://swazimedia.blogspot.com/2019/03/swaziland-finance-minister-threatens.html

Gap between rich and poor in Swaziland continues to grow, Finance Minister reports

https://swazimedia.blogspot.com/2019/02/gap-between-rich-and-poor-in-swaziland.html