Monday, 19 November 2012
Thursday, 8 November 2012
Saturday, 14 April 2012
Swaziland’s economy is heading for a shipwreck of Titanic proportions after news that the International Monetary Fund (IMF) has withdrawn support for the kingdom’s financial recovery plan.
Since 2010 the IMF has been working 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.
The government did force through 10 percent salary reductions for politicians, but last month (March 2012) MPs voted to have their pay restored because they said it was unfair that they were the only public sector workers to have taken the cut.
This week, Joannes Mongardini, head of the IMF mission to Swaziland, confirmed that it was no longer working with Swaziland on the staff-monitored programme.
He told the Times of Swaziland, the only independent daily newspaper in the kingdom, ‘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.
Without the support Swaziland is alone. There is little hope it can secure loans from international banks and even a E2.4 billion (US$307million) loan that had been negotiated with South Africa looks likely to be withdrawn as one of its conditions was that Swaziland provided evidence that it was tackling its economic problems.
So what happens next? Since news of the IMF withdrawal broke this week there has been no public statement from the Swazi Government. We know from the past that it has been less than honest with the Swazi people about the state of the economy, with Barnabas Dlamini, the Prime Minister, even claiming a year ago in April 2011 that it had the ‘letter of comfort’ from the IMF supporting its bid for international loans, when no such letter existed.
Finance Minister Majozi Sithole, however, told local media this week he expected to have further talks with the IMF and World Bank starting next Thursday (19 April 2012), but it is difficult to see what they have to talk about, unless the Swazi Government can demonstrate it has control of the economy – which clearly it does not.
IMF CALLS FOR SACRIFICE FROM THE KING
SWAZILAND FAILS ITS IMF TARGETS
Thursday, 17 November 2011
There is no need to retrench civil servants or cut their wages to save the Swaziland economy, a top IMF official said.
Joannes Mongardini, the Head of the International Monetary Fund (IMF) Mission to Swaziland, said there were other ways to reduce the bill in Swaziland without cutting the wages of ordinary workers.
This contradicts the Swaziland Government that has demanded cuts in salaries of 10 percent across-the-board for public service workers.
Mongardini told the BBC World Service Focus on Africa programme yesterday (16 November 2011), ‘We are recommending for the government to reduce the wages bill by 5 percent. This is a relatively moderate amount compared to countries like Greece, Portugal and Ireland.’
Asked by the BBC about the position of public service workers who have complained about the possibility of retrenchments and wage cuts, Mongardini said, ‘We fully understand that this is a politically difficult decision to make.
‘Having said that, the government can find other ways to reduce the wage bill that will not require salary cuts. In particular, some of the largest increases in the wage bill in recent years are due to increased security forces and police personnel and they also are due to very generous allowances that the government has given to politicians and top civil servants.’
Musa Ndlangamandla, the editor-in-chief of the Swazi Observer newspaper, today lambasts the Swaziland Government for stifling the debate about the cause of the financial crisis the kingdom faces.
Ndlangamandla says there is ‘a growing tendency by some in the echelons of power to go to all lengths to stifle public discourse and debate,’ about the economy. He goes on to name Barnabas Dlamini, the Swazi Prime Minister, as one of those culprits.
Writing in the Observer today (17 November 2011) Ndlangamandla tells of a meeting of ‘stakeholders’ to discuss the economy that was cancelled by the government. He writes, ‘This collection of influence brokers in the country’s economic, social and political strata would also have dissected our general spending patterns as a country to try and come up with answers and a way forward on the sad fact that despite the untold grinding poverty the country has faced in the past two decades, over 80% of the country’s wealth is shared by a mere 10% - the privileged few.
‘This group, I suspect, would also have gone through government’s bullet-holed and dog-eared balance sheet with a view to come up with realistic strategies to re-prioritise budgetary allocation.’
Maybe they would. And maybe they wouldn’t. Who knows? because the meeting didn’t take place.
But you can bet your last Rand that they wouldn’t have mentioned the most privileged of ‘the privileged few’, King Mswati III, Sub-Saharan Africa’s last absolute monarch.
The King has made no sacrifice during the present economic turmoil and no one in Swaziland – least of all Ndlangamandla and the Observer, the newspaper in effect owned by King Mswati himself, has publicly dared to point out the fact that the King and his family swill around in vast wealth while some of his subjects are so poor they have to eat cow dung before they can take their ARV medicines for HIV.
But last night a small crack appeared. Interviewed by the BBC World Service radio Joannes Mongardini, the Head of the IMF mission to Swaziland, was asked whether the King and his expenditure is an issue?
Mongardini is a born diplomat. Quietly, he responded, ‘The expenditure clearly poses a factor in transfers to His Majesty and in the context of a fiscal crisis we would expect all Swazis to make a sacrifice in order to reduce government spending,’ – which in diplomatic speak means ‘You Bet I Do.’
So, let’s not stifle the debate – let’s openly talk about the king, his wealth, and how as the most privileged of the few, he has sucked his kingdom dry.
And, if Ndlangamandla wants to be taken seriously as a journalist and commentator on important Swazi national affairs let him start the debate in tomorrow’s Swazi Observer.