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Mswati III will foot Swaziland’s debt, but at what cost?

Swaziland’s King Mswati III, Africa’s last absolute monarch, is personally funding a bailout of his government in a manoeuvre to acquire control of the local arm of mobile phone firm MTN and SwaziBank at knock-down prices, dissidents said on Thursday.

The emergency loan may ease an immediate public funding crisis. But Mswati’s broader plan could inflame public anger against the British-educated monarch, who has at least a dozen wives and a personal fortune estimated at $200-million.

The impoverished southern African nation’s appointed government, which has been shut out by commercial banks and the International Monetary Fund (IMF) and World Bank, admitted last week that civil servants would be paid late this month because it had run out of money.

However, on Thursday the Times of Swaziland said it was on the verge of securing a loan from two “entities” to the tune of $172-million — equivalent to around 3 months of civil service pay.

The paper did not give details but Lucky Lukhele of the Swaziland Solidarity Network, an exile group based in Johannesburg, said Mswati was the original source of the loan.

Cash cow
The funds were being channelled via the local unit of financial services group African Alliance, Lukhele said, and the government was using state-owned SwaziBank and its stake in the local unit of MTN, Africa’s biggest mobile operator, as collateral.

SwaziBank has been valued at around $125-million while MTN Swaziland is seen as a cash cow on account of monopoly rights that have allowed it to impose call charges significantly higher than neighbouring South Africa.

Mswati, who is accused of running the nation of 1.4 million people as a personal fiefdom, is already MTN Swaziland’s biggest shareholder and has been pressing the state telecoms firm to sell its holding to him at well below market value.

“The king is literally loaning the Swazi government his money that he has stolen from the Swazi coffers. He’s doing it through African Alliance,” Lukhele told Reuters.

“African Alliance is about to take over Swazi Bank and is about to take over all of the shares [in MTN] on behalf of the king,” he added.

Secret deal
Mario Masuku, leader of the banned PUDEMO opposition party, said he understood the deal to be broadly as Lukhele described.

“That’s what I’ve also gathered but it is something that is not openly clear to people,” he told Reuters. “It is the king who is manoeuvring these finances through his connections and all the companies where he is connected.”

Government spokesperson Percy Simelane said details of the deal, including any collateral posted, were secret.

“That is between the borrower and the companies that were involved,” he said. “The agreement does not include the rolling out of specifics.”

Unprecedented public dissent
Officials at African Alliance in Swaziland did not immediately respond to requests for comment.

Swaziland’s year-long budget crisis has hit HIV/Aids treatment programmes in what is the world’s worst-afflicted country and has spurred unprecedented public dissent against Mswati.

Political upheaval in North Africa has emboldened the protesters and the moustachioed monarch is said to have been particularly upset at the death of Libya’s Muammar Gaddafi, a close friend, at the hands of opposition gunmen last month. — Reuters

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