Swazis to get R400m bailout

The South African Customs Union (Sacu) will give Swaziland a R400-million bailout in its next quarterly revenue payments to help the cash-strapped kingdom pay public salaries and prevent threatened national strikes, the Mail & Guardian has learned.

“From what I understand, there is a plan to allocate R400-million through Sacu,” a Swaziland source said, citing information from the presidency.

Another person close to the loan process told the M&G: “This is a concession to help keep Swaziland above water and to stop the country from collapsing altogether. It buys South Africa time to work on a more comprehensive loan package. It is important for Pretoria to get this right.
There is a lot at stake for President Jacob Zuma in terms of keeping Cosatu and the South African Communist Party on side ahead of next year’s leadership contest.”

The South African treasury remains tight-lipped about any loan package it may provide for Swaziland. In an email a spokesperson repeated the department’s statement of June 28 that “technical discussions between South Africa and Swaziland on possible assistance are ongoing”.

It is understood that following meetings last week with members of Swaziland’s civil society organisations, plans are being drawn up for a ministerial taskforce comprising the department of international relations and co-operation, the department of trade and industry and the treasury. This team will work towards opening negotiations with Swaziland about providing financial assistance in return for political reform.

According to a senior Cosatu official, the unbanning of political parties and inclusive dialogue with members of civil society are likely to feature among the conditions of the loan (expected to be more than R1-billion), with a commitment by Swaziland to exercise more ­prudent fiscal management.

Swaziland was plunged into a liquidity crisis after its Sacu income fell by 60% last year due to a drop in regional imports.

Domestic debt has soared above R1-billion and the country’s overall deficit now exceeds R3-billion, according to Finance Minister Majozi Sithole. Swaziland is ruled by King Mswati III, Africa’s last absolute monarch, who is notorious for his vast wealth, lavish lifestyle and 13 shopaholic wives. Critics say it is poor and undemocratic governance that has left the economy so vulnerable.

Attempts to get funding from the International Monetary Fund and African Development Bank have stalled due to a failure to meet certain reform targets. One of these was to reduce the public wage bill, among the biggest in sub-Saharan Africa and equivalent to nearly half the country’s expenditure.

Proposals to cut salaries have been tabled by the finance minister, but they have been vehemently rejected by labour unions, who have staged various strikes and demonstrations. On Wednesday Charles Bennett, the chair of the Swaziland Principals’ Association, was reported by local media to be threatening to close down all the schools in the country if salaries are cut.

The country’s judiciary is also under strain after lawyers started boycotting court sessions over the suspension of High Court Judge Thomas Masuku. The Law Society of Swaziland is considering starting an impeachment process against Chief Justice Michael Ramodibedi, who ordered Masuku’s suspension and also sent out a directive disallowing legal action against the king.

Client Media Releases