(From Swazi Media Commentary 24 September 2010 www.swazimedia.blogspot.com Also
on Face book at
http://www.facebook.com/Swazi.Media.Commentary?v=wall#!/group.php?gid=142383985790674&ref=ts).
Just how bad is the state of Swaziland’s economy?
It’s
a ‘catastrophe’ if you believe Roman Grynberg, senior research fellow
at the non-governmental Botswana Institute for Development Policy
Analysis, who said
this week that changes made in the past to the way Southern Africa
Customs Union (SACU)
revenues were distributed, added to further changes being discussed for
the future, would have ‘absolutely catastrophic’ consequences for
countries such as Swaziland and would be ‘serious for political
stability in the whole Southern African region’.
Grynberg
was predicting the future, but the present is pretty grim as well.
There
are rumours flying around Swaziland at present that the government of King
Mswati III,
sub-Saharan Africa’s last absolute monarch, is
overspending by E30 million a month (4.2 million US dollars) and is
using its foreign currency reserves to pay bills.
Finance
Minister Majozi
Sithole has already said that government
revenues are so low that ‘non-SACU’ revenues are not enough to
pay the government wage bill. There are well-founded fears that the
government will not be able to pay civil service salaries from next
month (October 2010).
The
government needs income and it needs it quickly. It is trying all the
usual tricks of economists to stay afloat, such as seeking loans,
selling assets, issuing bonds.
So
far they have little success. In August 2010 the World Bank and the
International Monetary Fund refused
to support Swaziland in its effort to secure a 500 million US
dollar loan from the African Development Bank on the grounds that the
government had consistently ignored warnings that its wages and salaries
bill was too high for a kingdom of its size.
There
is little interest in buying bonds in Swaziland (countries all over the
world, most with much more stable economies than Swaziland, are selling
bonds), which leaves the sale of assets as the last resort. But,
Swaziland has few state -held assets, but what it does have is an
unknown amount of wealth ‘held in trust’ for the Swazi people by King
Mswati, but there is little likelihood that he will give up his control
of this money to help out.
All
that is realistically left for Swaziland is aid from the international
community to ensure that people don’t starve and that the health and
education services in the kingdom don’t grind to a halt.
But
the Swazi regime didn’t help its cause earlier this month when police
and security forces harassed and intimidated
foreign nationals
during the Global
Week of Action before
throwing them out of the kingdom.
This
action will not make people in developed countries feel well disposed
to Swaziland.
There
is also suspicion that ‘development aid’ destined for Swaziland doesn’t
go where it is needed, but instead is siphoned off by
King Mswati to pay for his palaces, Mercedes cars and his general
lavish lifestyle.
So
to sum up: there is overspending by E30 million a month, little chance
of selling bonds or assets or securing loans, and a potentially
unsympathetic international community.
Sounds
to me like Grynberg’s ‘catastrophe’ has already struck.
Link http://swazimedia.blogspot.com/2010/09/swaziland-economy-catastrophe.html
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