The African Development Bank has refused Swaziland a bailout loan as it hasn't met IMF conditions, a move described as "a catastrophe" for the nation.
The African Development Bank has refused Swaziland a bailout loan because the country has not met conditions set by the International Monetary Fund, a report said Friday.
“Our sources say our request will only be considered once we meet the International Monetary Fund (IMF) benchmarks,” Finance Minister Majozi Sithole told the Times of Swaziland.
“The president of the [African Development] Bank is yet to communicate to us and I believe he is also considering other options so that when he communicates he will let us into the options,” said Sithole.
In a sign of how desperately Swaziland needs the cash, Sithole had urged the nation to pray on Tuesday for the loan’s approval.
“This is a catastrophe for the hapless government,” the Times said in a comment.
Without a “letter of comfort” from the IMF, Africa’s last absolute monarchy has little chance of getting loans from international institutions.
The IMF says Swaziland must put in place austerity measures, cutting thousands of government jobs and reducing salaries, before loans will be approved.
Over the past few months, the government has begun cutting salaries of its top earners, including reducing the Cabinet’s pay by 10%.
Civil service unions are resisting salary cuts lower down the scale, arguing that the government top brass will not feel the pinch after they received generous perks last year.
Swaziland has drained its reserves to keep paying salaries for civil servants, who have staged a series of protests against moves to slash their wages.
That has turned the financial crisis into a political challenge for King Mswati III, Africa’s last absolute monarch, as the labour protesters have also begun demanding democratic reforms.—AFP. .