A cash crunch gripping Swaziland, Africa’s last absolute monarchy, intensified on Friday after South Africa admitted it had not paid the first slice of an emergency 2.4 billion rand loan in August, as previously expected.
The absence of the funds, seen as the final lifeline of an unelected administration that appears to have run out of money, may mean civil servants receiving their pay late, if at all — piling more political pressure on King Mswati III.
The crisis has already sparked unprecedented demonstrations against the UK-educated monarch, who has at least a dozen wives and a fortune estimated at US$200 million, and more marches are planned around independence day celebrations next week.
“It is a material fact that progress can only be achieved through action and sometimes confrontation,” South Africa’s powerful NEHAWU health workers union said in a statement callling for a mass uprising.
“The people of Swaziland owe it to themselves and the next generation to make a united stand against this corrupt and brutal dictatorship.”
Security forces in the landlocked nation of 1.4 million used tear gas and baton charges to break up marches earlier this year, sparking condemnation from foreign governments and boosting the case of dissidents pushing for regime change.
The main demands are the unbanning of political parties, release of Swaziland’s five political prisoners and the charting of a route towards democratic rule — conditions that South Africa alluded to when it unveiled the loan a month ago.
However, treasury officials in Pretoria declined to say what caused the loan delay or when the deal might be concluded.
“No money will be transferred until the paperwork has been signed,” spokeswoman Kershia Singh said. “We were aiming for August. It’s obviously taking longer than we anticipated.”
The loan negotiations followed a personal mission to Pretoria by Mswati after he tried and failed to get money out of lenders such as the International Monetary Fund (IMF).
At the time, the agreement was heavily criticised by unions formally allied to South Africa’s ruling African National Congress, who said it was merely propping up a repressive regime.
The IMF is demanding big cuts to what is officially Africa’s most bloated bureaucracy, but this week gave a critical assessment of reforms, saying the government had missed targets for axing a budget deficit of more than 14 percent of GDP.
The crisis has spilled into the wider economy, hitting growth and raising fears of a collapse of the currency and banking system if Swazis decide to empty their accounts and convert savings into rand, the most widely used hard currency.
The fiscal problems stem from a 2009 recession in South Africa that triggered a collapse in revenues from the SACU regional customs union that has historically accounted for two-thirds of Swaziland’s budget.
The government has kept its head above water by eating up central bank reserves and running up at least US$180 million in unpaid bills, but has made only half-hearted efforts to rein in spending on the military and royal household.
The government has hit its formal credit limit at the central bank, whose reserves amount to just 2.2 months of import cover, but has continued to borrow, using its oil reserves as collateral.
The crisis has dealt a heavy blow to an already impoverished population.
The main university has been closed for months, and stocks of HIV/AIDS medications are thought to be down to about two months in a country with one of the highest infection rates.