SWAZILAND ON BRINK OF COLLAPSE

Now, it’s official: Swaziland is on the brink of financial collapse.

I’ve been warning for some time that the kingdom ruled by King Mswati III, sub-Saharan Africa’s last absolute monarch is living beyond its means.

With 70 percent of the one million population earning less than one US dollar a day and receipts from the Southern African Customs Union about to be cut to ribbons, there is next to no money coming into the government in Swaziland.

But the Swazi Government continues to give its members and ordinary MPs vast wage increases while at the same increasing money it pays to civil servants.

Now the International Monetary Fund (IMF) has warned enough is enough.

It met with the Swazi Finance Committee last week and said the government must stop its reckless expenditure. The salary bill for civil servants now stands at 54 percent of the kingdom’s budget.

Finance Committee chairman MP Marwick Khumalo last Friday told the Swazi Parliament, ‘We met with the IMF team on Wednesday and it must be said that they were not happy with Swaziland and a red flag was raised. The team said Swaziland was on the brink of collapsing because money was being wasted on paying government personnel and those in leadership positions.’

The IMF, according to Khumalo, warned of tough times ahead as the kingdom was also faced with dwindling SACU receipts and therefore could not afford to continue spending money on salaries for personnel.

As the Times of Swaziland, the kingdom’s only independent daily newspaper reports today (1 December 2009), this is not the first time that the IMF has sent such a warning to Swaziland as it previously advised the country to cut down on its number of government employees.

This advice has not been heeded, however, as the Swaziland’s illegally-appointed Prime Minister, Barnabas Dlamini, when taking up office, promised there would be no civil service retrenchments. Dlamini instead promised that all vacant government posts would be filled and this includes temporary teachers whom government has since engaged on a full time basis.

SWAZI FINANCE MINISTER CASH ‘HOAX’

A cash windfall for social projects worth at least E100m (10m US dollars) promised by Swaziland’s Minister of Finance may not exist.

I reported in March 2009 that Majozi Sithole told the Swazi Parliament that the government had managed to retrieve the E28m it had spent (illegally) on a deposit for a private jet for King Mswati III, sub-Saharan Africa’s last absolute monarch.

Sithole said the money had grown from E28m and with interest it was now worth E100m. The money was reported to be from donor agencies and was be used for unnamed social projects in Swaziland.

I doubted the truth of the statement at the time and now it seems I am not alone.

According to the Times of Swaziland, the kingdom’s only independent daily newspaper, the E100m has now grown to E400m, but nobody knew where the money is. The newspaper calls the claim that the money exists ‘a hoax’ and asks has the ‘Swazi nation been taken for a ride?’

The money was said to be under the trust of Professor Frans Whelpton at the University of South Africa. It was also said that the donors refused to allow the money to be given directly to the Government of Swaziland. By the government’s own admission about E40m a month is lost to corruption in Swaziland.

Whelpton told the Times that he has not received any money and he doesn’t know who the donors are.

The Times said the funds would no longer come from Canada as had originally been announced but would now come from Germany.

In an interesting twist this week, Barnabas Dlamini, Swaziland’s illegally-appointed prime minister, tried to blame Whelpton for the confusion.

According to the Swazi Observer, the newspaper in effect owned by King Mswati, Dlamini told a breakfast meeting that Whelpton was involved in the project of his own accord and that the Swazi Government were ‘extra careful in our dealings with him’.

Dlamini went on to say, ‘We’re waiting to see whether the donor money is there as promised by him.’

The incompetence of the government is staggering. The whole sorry affair stared because the government had secretly and illegally entered into a contract to buy a private jet for the king. When news leaked out and the outcry travelled around the world, the government was forced to abandon the contract and lost the E28m deposit.

This was in 2002 and since then the government has often told the Swazi people the money is to be refunded. And each time, nothing happens.

I doubt if much will come from the present debacle. I can’t see any connection between a lost jet deposit worth E28million and E400 million of donor funds for health and education projects.

What I can’t work out is whether the Swazi Government is simply lying to get itself out of a hole or whether the prime minister and the finance minister genuinely believe that donor agencies would be so lax as to give a professor E400m to spend as he saw fit in Swaziland.

And the final twist in the saga: the company that was to provide the jet has an outstanding court claim against Swaziland for breach of contract – for a cool E47m.

GO FIGURE, SWAZI FINANCE MINISTER

Swaziland Finance Minister Majozi Sithole’s is in a bit of a hole.

In his recent budget speech he managed to mislead the Swazi people on two occasions by giving statistics that were not true. The question now is: did he lie or is he just no good at his job?

The two cases involve a long standing dispute over the purchase of a private jet for King Mswati III and the unemployment figures.

The king’s jet first: seven years ago Sithole, then as now Finance Minister, and Swaziland’s present illegally-appointed Prime Minister Barnabas Dlamini, who was also PM at the time, were leaders in a secret plot to buy the king his own jet. When news leaked out there was an outcry both inside Swaziland and abroad and the purchase was dropped, but not until Swaziland taxpayers had been forced to lose E28 million (2.6 million US dollars at today’s exchange rate) on a deposit.

Since the scandal was exposed in 2002, the Swazi Government has been telling the people that it is close to getting the deposit back. In his budget statement last week (27 February 2009), Sithole said the money was now on its way. When questioned on this is said that his government had been able to secure not E28 million, but E100 million.

The Swazi Observer, the newspaper in effect owned by King Mswati III, reported Sithole then said the E100 million represented the E28 million, plus interest at the rate of 10 percent per year.

Let’s halt there. Ten percent of E28 million is E2.8 million. Multiply that annual interest by the number of years this saga has been going on (seven) and you get E19.6 million. Add the deposit and the interest together and you get E47.6 million – nowhere close to the E100 million claimed by Sithole.

The discrepancy in Sithole’s arithmetic is plain for all to see, but no member of parliament questioned the figure and (frankly) the Observer made itself look pretty stupid by simply taking the minister’s word for it.

At least the kingdom’s only independent daily newspaper, the Times of Swaziland, eventually caught up with the fact that Sithole’s sums were wrong.

But by then the story had moved on. It seems a sum of E100 million does exist, and is in deposit in South Africa, but it is not the jet deposit. The money is reported to be from donor agencies and can be used for social projects in Swaziland, but it is not money that the Swazi Government is allowed to touch. The Finance Minister insists that this money is in fact the jet money.

Now, Lobamba Lomdzala MP Marwick Khumalo has raised suspicions in the House of Assembly. He says that if it turns out that Sithole has fooled the House about the jet deposit, a motion of a vote of no confidence against him would be moved. If Sithole loses this he should be sacked.

Now on to unemployment.

According to a report in the Times, Sithole announced during the National Budget Speech that the current unemployment rate for Swaziland stood at 28.2 per cent.

No it doesn’t. If only 222,771 people are employed from a labour force of 559,528, that means 336,757 are not employed. Now do the arithmetic: 336,757 as a percentage of 559,528 is 60.1 percent – nowhere even close to Sithole’s figure of 28.2.

If we are kind to Sithole and say he made a slip of the tongue and meant to say that only 222,771 people are UNemployed – it still gives an unemployment rate of 39.8 percent – 11 percent higher than what he told Parliament.

Where does he get the figures from? Does he just pull them from a hat and hope nobody will notice he’s talking nonsense?

So why the discrepancies? Did he lie to Parliament (and if so why?) or is he no good at his job?

Sithole delivered his ninth annual national budget as Finance Minister last month – you be the judge.