Swazis squabble over how SA loan should be spent

Despite the R2.4-billion loan from the South African government to its cash-strapped neighbour, Swaziland is sinking deeper into debt.

While the money is yet to be given to Swaziland — the first installment is due at the end of August — various institutions and organisations disagree on what government should do with the money.

Most of the Swaziland government’s business creditors feel the money should be used to pay them, while others believe it should go towards the country’s education institutions. The country’s only university as well as public schools have closed because of a lack of funds.

By the end of May the government owed independent businesses 1.4-billion-emalangeni (R1.4-billion). The lilangeni is pegged at par with the rand.

Businesses feel that their debt should be paid first once government receives the first instalment of about R800-million.

South African Minister of Finance Pravin Gordhan said the loan will be released in three installments — at the end of August, October and February 2012.

“A lot of companies are closing down because government has not paid them,” said Hezekiel Mabuza, vice-president of the Federation of the Swaziland Business Community (FESBC).

“We hope government will use the loan from South Africa to pay us, otherwise more businesses will close down.” FESBC has a membership of 500 small and medium businesses, and so far over 50 have closed down because government has failed to pay them for supplied goods and services.

“What’s worse, we can’t get stock on credit from South African suppliers because we have outstanding debts,” said Mabuza.

The country’s cash flow problems started in 2010 when Swaziland received 60% less of what it used to get from the Southern African Customs Union. The regional customs union used to contribute more than half of Swaziland’s national budget, but the revenue dropped after the global economic meltdown.


Education sector woes
But the country’s education sector has also suffered a severe blow because of the lack of funds.

The reopening of the University of Swaziland (Uniswa), the country’s only university, has been put on hold because government does not have adequate funds for scholarships, which are awarded to all students who get accepted to the university.

According to Uniswa registrar, Sipho Vilakati, the institution’s budget for this academic year is 241-million-emalangeni. Government has not paid the institution so far and the university, which was supposed to reopen on August 8, after the holidays, is yet to begin lectures.

“The date for the start of lectures this academic year is yet to be decided by the [university] senate,” said Vilakati.

Staff salaries have not been paid in recent months because of the lack of adequate funds.

Public schools also had to close prematurely on August 5 because government has not paid fees for orphans and vulnerable children and for ordinary pupils under the Free Primary Education Programme (FPEP).

Out of the 148.5-million-emalangeni owed for orphans and vulnerable children, government was only able to pay schools 37.7-million-emalangeni. For the FPEP, which caters for grades one to three in all public schools, government owes schools an estimated 47.7-million-emalangeni.

Government is also yet to pay the Examinations Council 3.7-million-emalangeni for exam fees for orphans and vulnerable children.

“Unless we get the money to run schools, there is no way we’ll reopen for the third term,” said president of the Swaziland Principals’ Association, Charles Bennett.

Education is not the only sector affected by the economic crisis.

Crumbling health sector
People living with HIV/Aids feel the money should be directed to the health sector, particularly to ensure that the country has adequate supplies of ARVs and services of HIV-positive people, such as home-based care.

“Government has repeatedly said the health sector will be prioritised, yet we see it crumbling because there are no drugs in hospitals and boycotts by staff have become the order of the day,” said president of the Swaziland National Network of People Living with HIV/Aids, Vusi Nxumalo.

In July people living with HIV/Aids took to the streets after the country’s buffer stock of ARVs fell below the prescribed three-month supply.

Since the loan was announced on August 3, the Swazi government has remained silent on how the money will be used.

Instead, Prime Minister Barnabas Sibusiso Dlamini commended King Mswati III for obtaining the loan, further fuelling fury among progressives who had called on South Africa to withhold the loan to force Swaziland to democratise. The Southern African country is ruled by the monarchy and political parties are not allowed to contest power.

“It goes to show how undemocratic some governments that appear to be democratic on the surface can be,” said Institute of Democracy in Africa programme manager Thembinkosi Dlamini, referring to South Africa.

Also furious about this loan is the Congress of South African Trade Unions whose spokesperson Patrick Craven said workers were disappointed at the vague conditions attached to the loan.

Annually, the Swazi government hosts the Smart Partnership Dialogue where the king and citizens from different sectors of society discuss development issues. However, political parties are excluded from these discussions.

The conditions by the South African government included broadening the dialogue to include all stakeholders and citizens guided by the Joint Bilateral Commissions for Cooperation agreement, which promotes democracy and the respect of universal human rights.

“So long as there are no strict conditions to compel the regime to concede democratic reforms and to share the country’s wealth among the people, the loan will simply be used to maintain the status quo,” said Craven.

And without the conditions for regime change attached to any loan, Swaziland will continue asking South Africa for more money, said secretary general of the Swaziland Federation of Labour, Vincent Ncongwane.

“Without fixing the loopholes, this loan is not going to help us,” said Ncongwane.

Swaziland approached South Africa for the loan after the African Development Bank refused to award Swaziland a R1.2-billion loan because the country failed to meet the International Monetary Fund (IMF) recommendations.

The IMF advised the Swazi government to reduce public servants’ salaries by 4.5% and politicians’ salaries by 10% to save government 240-million-emalangeni a year. However, salaries remain untouched after trade unions opposed the move.

The IMF will return to the country at a date yet to be confirmed to further assess the fiscal situation. – Sapa-IPS

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Advertising

Inside Facebook’s big bet on Africa

New undersea cables will massively increase bandwidth to the continent

No back to school for teachers just yet

Last week the basic education minister was adamant that teachers will return to school on May 25, but some provinces say not all Covid-19 measures are in place to prevent its spread

Engineering slips out of gear at varsity

Walter Sisulu University wants to reprioritise R178-million that it stands to give back to treasury after failing to spend it

Lockdown relief scheme payouts to employees tops R14-billion

Now employers and employees can apply to the Unemployment Insurance Fund for relief scheme payments
Advertising

Press Releases

Covid-19: Eased lockdown and rule of law Webinar

If you are arrested and fined in lockdown, you do get a criminal record if you pay the admission of guilt fine

Covid-19 and Frontline Workers

Who is caring for the healthcare workers? 'Working together is how we are going to get through this. It’s not just a marathon, it’s a relay'.

PPS webinar Part 2: Small business, big risk

The risks that businesses face and how they can be dealt with are something all business owners should be well acquainted with

Call for applications for the position of GCRO executive director

The Gauteng City-Region Observatory is seeking to appoint a high-calibre researcher and manager to be the executive director and to lead it

DriveRisk stays safe with high-tech thermal camera solution

Itec Evolve installed the screening device within a few days to help the driver behaviour company become compliant with health and safety regulations

Senwes launches Agri Value Chain Food Umbrella

South African farmers can now help to feed the needy by donating part of their bumper maize crop to delivery number 418668

Ethics and internal financial controls add value to the public sector

National treasury is rolling out accounting technician training programmes to upskill those who work in its finance units in public sector accounting principles

Lessons from South Korea for Africa’s development

'Leaders can push people through, through their vision and inspiration, based on their exemplary actions'