Swaziland can pay state salaries, in IMF talks


Swaziland can continue to pay state salaries this year, but is in daily talks with the International Monetary Fund on how to ease a financial crisis, says a government minister..

Jabulile Mashwama, minister of commerce, industry and trade, also said job cuts being discussed in talks with lenders would only be a short-term solution.

Mashwama said rare protests in the tiny African kingdom last week calling for the government’s resignation were spurred by a lack of information about state finances amid fears that civil servants would not be paid this month, Reuters reports.
“The real risk is that we don’t have finance at the moment sufficient to meet … needs. But from where we sit now, we will continue to pay salaries. There’s no risk not to pay salaries this year,” she said on the sidelines of an African investment forum in Dubai.

Africa’s last absolute monarchy has suffered a 60-percent drop in income from the Southern African Customs Union, which accounts for two-thirds of state revenues, partly due to slumping trade in the wake of the global financial crisis.

Mashama declined to comment on proposed changes to the revenue sharing deal in the 100-year-old customs union which could further reduce Swaziland’s share.

The minister said the government is in daily contact with the IMF, whose mission left the country three weeks ago, to help resolve the crisis in Africa’s third largest sugar producer.
“We are working with the IMF to find solutions for the current scenario, we are in talks,” she said. “What is acceptable for us is what will work for our people.”

Thousands of Swazis marched on the prime minister’s office last Friday to demand the government resign. Government sources told Reuters that 7,000 of the country’s 35,000 civil servants would be retrenched in the next three years in an attempt to cut state spending on salaries.
“It’s one scenario that has been suggested … it’s always an option to retrench,” she said. “But I think it’s a short-term scenario versus a long-term scenario. We’re looking for something a bit more sustainable here then just saying let’s cut for today. And then what tomorrow?”

A $145 million loan from the African Development Bank will only be granted if some IMF criteria, including reducing the state’s wage bill, are met.

Mashwama declined to say what other economic concessions were on the table, saying talks were confidential.

Unemployment in the nation of 1.4 million people is about 40 percent, with 70 percent of the population living below the national poverty line.