The Swazi Observer, the newspaper in effect owned by King Mswati III, has told Barnabas Dlamini, Swaziland’s Prime Minister, his deputy and the Finance Minister to all resign.
‘[The] PM has allowed himself to be party to the collapse of our economy and there is no better punishment than to ask him to leave,’ Thulani Thwala, the editor of the Observer says.
Thwala, writing in his own newspaper today (29 December 2010), also calls for Majozi Sithole, the Finance Minister, and Themba Masuku, the Deputy Prime Minister (DPM), to quit.
Thwala writes, ‘Reality is; we are in trouble as a countryand definitely 2011 will be such a mountain to climb for many of us. In a nutshell, we are dead walking. Who is to blame for the situation we find ourselves in as a country? Look no further than the PM, DPM and Finance Minister Majozi Sithole.’
He goes on, ‘Here are three thoroughly educated Swazi men who are letting everyone including the King down. With their education combined, we should not be swimming in financial troubles.’
He goes on, ‘Now, the reason I picked on the three is simple; the current PM has been finance minister before, the longest serving one at that. The current DPM was once finance minister, a good one, if you like. And we have Majozi who has been in the finance office for over 11 years now.’
Writing on Sithole, Thwala says, ‘He has allowed people to plunder state funds without raising a finger,’
He goes on, ‘I ask; how did Majozi (an economist by profession or birth) fail to spot that our financial standing was collapsing in the 11 years he has been minister?
‘In normal countries, Majozi should have been asked to leave. He has allowed people to plunder state funds without raising a finger. Allowed lunatics (by his own admission) to keep government’s safe keys.
Thwala writes, ‘I know Majozi would argue that he has been issuing warnings in his recycled budget speeches and people ignored to listen. To me that is not good enough. His cabinet colleagues have been flying non-stop (business class or first class) to an extent that some are now personally known to pilots of the international flights.
‘I can’t find a single record where Majozi attempted to barricade some of his colleagues from attending the many useless international conferences. It would not surprise me to learn that some ministers attended swimming and cooking workshops overseas.’
He writes, ‘It would help if Majozi resigned. I strongly feel someone like Dumsani Masilela would make a good finance minister.’
Writing on Masuku, Thwala says,‘The DPM will also have to go, simple because of his status as an accomplice, an educated one at that, to the heartless strangling of the economy.’
Thwala also accuses Dlamini, who was illegally appointed Prime Minister of Swaziland by King Mswati, sub-Saharan Africa's last absolute monarch, and cabinet colleagues of greed and feathering their own nests by buying government land for themselves at vastly discounted prices.
The Swaziland Government must not be allowed to get away with claiming that the economic meltdown in the kingdom is not of its making.
Time and again Majozi Sithole, who has been Swazi Minister of Finance for the past ten years, alludes to the world banking crisis that started in 2008 as the major cause of Swaziland’s present perilous state.
But this is simply not true. Swaziland’s economy was in a mess long before 2008 and Sithole and the ruling elite in Swaziland, which is headed by King Mswati III, sub-Saharan Africa’s last absolute monarch, must take the blame.
Theirs is a record of poor economic performance – the worst in the whole of sub-Saharan Africa.
And none of this is a secret, although politicians and the media in Swaziland have very short memories and would prefer that we too forgot the truth.
By a coincidence of timing just as Lehman Brothers was collapsing in the United States in 2008, triggering a worldwide banking crisis, the International Monetary Fund (IMF) was issuing a progress report on Swaziland.
The IMF saw a raft of poor performances in all parts of the Swaziland economy, with slow growth, poor gross domestic product (GDP) and 66 percent of the population living in poverty while 20 percent of the population claimed two-thirds of the income.
The report appeared in the IMF Survey Magazine dated 28 July 2008. Here are some extended extracts from that report that clearly show that Swaziland’s economy was heading for the skids, long before the banking collapse. It therefore it follows that the major economic crisis that Swaziland faces today is not connected to that collapse.
The survey reported, ‘When the rest of sub-Saharan Africa was growing over the last decade, the economy of the Kingdom of Swaziland stagnated.
‘The slow growth may have worsened already difficult conditions in the tiny, landlocked country where in 2001, the latest year for which there are data, about two-thirds of its 1 million residents lived in poverty and 20 percent of the population claimed two-thirds of the income. A major contributor to the stagnating Swazi economy has been its financial sector, which, while in the main healthy, has taken steps backward in the past decade.
‘Swaziland's real per capita GDP growth declined from an annual rate of 2 ½ percent during 1980-94 to 0.7 percent since then. In contrast, real growth in all of sub-Saharan Africa has averaged 1 ½ percent annually since 1995 and in other lower-middle-income countries, growth averaged 7 ½ percent.
Shallower banking system
‘Some studies suggest that the deeper the financial system—that is, the more access businesses and individuals have to varied financial services—the better equipped it is to mobilize resources and the more important is its effect on growth, poverty reduction, and income equality.
‘But instead of deepening, or increasing its role in the economy, Swaziland's banking system has, by almost any measure, become shallower. Private sector lending, money supply, and bank deposits as a percentage of GDP have all declined since 1995 while high poverty and income inequality persist in a country that also has the highest incidence of HIV/AIDS in the world.
Financial, real economies linked
‘There are a number of important linkages between the real economy and the financial sector in Swaziland that explain, at least in part, the country's performance:
‘The country mobilizes too little domestic saving(8 percent of GDP) to finance investment, and foreign savings have fallen off since the 1980s and 1990s. Annual investment rates have declined from 25 percent of GDP for the period 1981-94 to 19 percent since then—far below other low-income and lower-middle-income countries in the region.
‘• High government spending, well beyond current revenues, has produced a large civil service wage bill that, together with poor selection and appraisal of public investment projects, has hurt growth.
‘• Access to finance is limited, which constrains financing of growth-enhancing investment projects. The commercial banking system has concentrated on export financing and bypassed a large portion of the adult population. The World Bank estimates that only 35 percent of the Swazi adult population has access to a bank account—too low, given its stage of development . There is no public credit registry, and private credit bureaus cover only 38 percent of the population.
‘• Despite the sizable loans it receives from banks, the export sector has not been an effective engine of growth and employment. Swaziland's main exports are soft-drink concentrates, sugar, textiles, and pulp paper. But growth prospects for those exports are limited because of intense competition from other countries and gradual erosion of preferential arrangements with trading partners such as the United States and the European Union, as well as adverse movements in Swaziland's real exchange rate.
‘• Swaziland has a weak investment climate, which tends to push up the cost of capital and the rate of return investors seek. With few viable real investment opportunities in Swaziland, most private domestic savings—in particular from pension funds and insurance companies—are invested in South Africa's deeper financial markets, which offer a wider array of financial services to a broader spectrum of investors. In response, Swazi authorities have required pension and insurance companies to gradually return a portion of those investments to the domestic market.
‘• The financial sector has become more vulnerableas a result of inadequate regulation and supervision of nonbank financial institutions (NBFIs), especially the savings and credit cooperatives (SCCOs) that have sprung up to fill the financial needs of the many Swazis abandoned by the commercial banking sector. Since 2002, lending by SCCOs has grown 116 percent, compared with 26 percent for banks. Among the NBFIs, pension funds and insurance companies are generally sound, but some SCCOs face severe financial difficulties that could undermine confidence in the financial sector and limit SCCOs' recent gains in access to finance.
‘• The depth of financial markets is further limited by lack of access to collateral for many borrowers. About 60 percent of the land is held in public trust and cannot be used by farmers, for example, to secure loans to invest in increasing agricultural yields. As a result, most of the people who live on these public lands are limited to accumulating savings in traditional assets such as livestock. With no incentives, or ability, to access the formal financial sector they have to rely on subsistence agriculture. The limited prospects for scaling up agricultural yield and growth are a blow to a country in which most people live in rural areas.’
Taken as a whole the IMF report shows that the Swaziland economy has been in decline for many years. The report was published in 2008, but the failings it recorded had been identified for many years before. The international financial community had repeatedly warned the Swaziland Government that it could not continue to be reckless with the economy without there being a major disaster.
That disaster has arrived. Next time Finance Minister Sithole or Barnabas Dlamini, Swaziland’s illegally-appointed Prime Minister, or King Mswati, or any of his other hangers-on try to tell us it’s all the fault of the global banking crisis, hold up a mirror to their faces and show them who it really was who destroyed Swaziland.
Now, people may die as a result of the Swaziland Government’s mismanagement of the economy.
As the money runs out, doctors in the kingdom are not being paid their on-call allowances – even though the government had said health services would not be affected by the economic meltdown.
To force the government to pay, doctors have threatened not to respond to emergencies,‘something that is going to place people’s lives in danger,’ according to a report in the Swazi Observer, the newspaper in effect owned by King Mswati III, sub-Saharan Africa’s last absolute monarch.
The newspaper reports, ‘Last month [November 2010], government announced a freeze on overtime allowances for civil servants, but had said nurses and doctors were not going to be affected. However, non-availability of funds has forced government to ignore its responsibility to pay doctors their allowances.
‘In the past lives were lost when medical staff effected a work-to-rule strategy and chances are that if doctors live up to their threat the country could be headed for a crisis where getting medical attention was concerned.’
‘Principal Secretary in the Ministry of Health, Stephen Shongwe, confirmed that doctors were not paid, stating that it was due to circumstances beyond the ministry’s control. He said doctors should understand that.
‘Shongwe said government had challenges with its cash-flow at the moment but the doctors would be paid, hopefully next month.
‘Asked where government would have got the money by then, he stated that he believed there would be money in the coffers. Shongwe said sometimes they had to give doctors cheques but it was impossible now because of the cash-flow.
Last month, I questioned whether we could believe Majozi Sithole, the Swazi Finance Minister, when he said the spending cuts the government wanted to make to stop the economy collapsing completely would not fall on health or education. It looks like I was right.
The failure to pay doctors is only one of a number of examples of how the Swaziland Government is failing to pay its bills due to what it likes to call a ‘cash-flow crisis’. Click on the links below to see other examples.
The Swaziland Cabinet and government have lost the moral right to govern, one of the kingdom’s leading pro-democracy activists says.
The whole Cabinet led by Barnabas Dlamini, the kingdom’s illegally-appointed Prime Minister, has colluded in abusing their positions by awarding themselves land worth up to twice what they are paying for it, according to Musa Hlophe, coordinator of the Swaziland Coalition of Concerned Civic Organisations (SCCCO).
He says, ‘This, at a time when the government is facing financial meltdown and has to borrow from the banks just to get salaries.
‘Yet the Cabinet can award some of its members a collective E1 million pay rise.
‘I assume the others agreed to it because they are next.’
Hlophe writes in his regular column in the Times Sunday, an independent newspaper in the kingdom ruled by King Mswati III, sub-Saharan Africa’s last absolute monarch, that the Human Rights Commissionshould act.
‘It is in charge of the Code of Conduct for Ministers and surely this massive unreasonable enrichment is a breach of the code.
‘If it is not the Human Rights Commission then it is the Anti Corruption Commission.
‘Why are our constitutional watchdogs silent?
‘Have they no bark? Have they no bite?
‘The current Minister of Justice [Rev. David Matse] was once Chairman of the Human Rights Commission.
‘He told the country and the world that it would be judged by international standards of transparency and effectiveness. What happened?’
Hlophe also criticises Majozi Sithole, the Swazi Finance Minister, for an interview he gave last week where Sithole was able to offer no concrete plan to get Swaziland out of the economic mess it is in today.
Hlophe writes, ‘As a man tasked with bringing the country’s finances back from the brink of disaster, he seems to have no ideas other than trying to stop small areas of corruption such as the amount of overtime the cleaners in his office get.
‘He says, “For us to get out of this situation we need to turn this crisis into an opportunity. That is for us to restructure and do a lot of structural reforms that we need in a number of areas as a country.”
‘What does that mean?
‘It is bland generalisation and mumbo-jumbo.
‘What we as a people need to know is what structural reforms are necessary in which parts of the country.
‘What have they promised the IMFand how is it going to affect us?
‘We know that thousands of civil servants are going to lose their jobs but which ones?
‘I have not yet met one who is seriously thinking about taking the package government is offering.
‘They know that when the money runs out there will be no more.
