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Wednesday, March 12, 2014
- While Swaziland struggles to alleviate its fiscal crisis with foreign aid because of its World Bank classification as a lower middle-income country, the government has increased the budget for King Mswati III, Africa’s last remaining absolute monarch and one of the richest royals in the world. This move came despite figures showing that while the number of people living on less than two dollars a day has dropped by six percent between 2001 and 2010, the welfare of the poorest people, which make up 30 percent of the population, has not improved.
“It has been shown that the economic growth experienced by Swaziland during the 2000s has not been pro-poor,” reads the Swaziland Household Income and Expenditure Survey report. More than 160,000 people depend on food aid while 26 percent of the productive age group of 15 and 49 years lives with HIV.
Swaziland’s projected budget revenue for this year stands at a tiny 1.2 billion dollars, with grants amounting to a “minimal” 57 million dollars, according to finance minister Majozi Sithole.
Now that the government is facing fiscal challenges, the country is feeling the foreign aid squeeze more intensely. Following the slash in Southern African Customs Union (SACU) receipts with which Swaziland used to finance its budget by up to 60 percent, the country needs foreign aid more than ever before.
Pat Muir, principal secretary at the ministry of education and training, says, “the country’s World Bank classification makes it impossible for us to partner with international organisations that could assist us with some of our services”.
Sithole decries the skewed distribution of wealth in the country, which contributes to the country being classified as a lower middle-income country. This status is based on an elite representing only 10 percent of the population but controlling 60 percent of the country’s wealth.
Forbes Magazine in 2009 listed Mswati, whose wealth is estimated at 100 million dollars, excluding an alleged 10 billion dollars which was put in trust in his name by the late King Sobhuza II, his father. The government of Swaziland has not come out to deny these claims.
Despite the fiscal crisis, the government increased Mswati’s budget from 24 million dollars in 2010 to 30 million dollars in 2011.
This happens at a time when the government, as advised by the International Monetary Fund (IMF), is cutting salaries by five percent and freezing wages for the next three years to bring down the public wage bill, the biggest in the region, by five percent annually.
“Civil servants would have to make a choice between earning 90 percent of their salaries, or nothing at all if they insist on getting 100 percent of their wages,” Sithole announced a while ago.
Obviously such measures do not apply to the royal budget.
Swaziland’s lower middle-income status also presents a problem to civil society organisations as donors’ focus shifted to least developed countries.
According to Emmanuel Ndlangamandla, the director for the Coordinating Assembly for Non-Governmental Organisations (CANGO), foreign aid to Swaziland started to dry up from the 1990s.
“Since then, NGOs have been downscaling operations because donors are not interested in funding Swaziland because of its lower middle-income status,” says Ndlangamandla.
What has further compounded the problem, states Khangezile Dlamini, the general secretary for Council of Swaziland Churches (CSC), is the system of governance that breeds corruption and does not allow transparency.
“Donors tell us that government hosts the king’s birthday celebrations every year, yet it fails to provide for its poor people,” said Dlamini. Despite the fiscal crisis, government still plans to host the king’s birthday celebrations on Apr. 19.
She said CSC had to discontinue a programme where the organisation was installing boreholes for poor communities in drought-prone areas. “Our donors told us that government should be responsible for providing these services to its people.”
Corruption in the country is a major problem, with Sithole claiming that the government is losing 11 million dollars every month to this scourge: “We’ve also been seeing a lot of over-expenditure on the part of government where departments would buy big expensive cars just to use on tarred roads.”
The conspicuous consumption over the years has been worsened by the availability of money from the SACU receipts. “A big party has come to an end,” said Joannes Mongardini, the IMF Africa head of mission.
The drop in SACU earnings followed the global economic meltdown that had reduced the amount of exports from SACU, of which Botswana, Lesotho, Namibia and Swaziland (BLNS) are members, along with South Africa.
SACU receipts have been reduced from over 700 million dollars for 2009/2010 to about 400 million dollars for 2011/2012, finance minister Sithole pointed out as motivation for loans to be made available by the African Development Bank (AfDB).
“We need assistance to increase our non-SACU revenue,” Sithole said at a budget analysis forum where the AfDB and the IMF were in attendance.
Swaziland is under the IMF’s staff-monitored programme which requires that a delegation from the international financial institution visits the country every six months to observe its fiscal management.