Note: This article is from the Guardian.
Swaziland has failed to pay more than m (£6.3m) in grants to Aids orphans, the IMF says, despite the vast wealth enjoyed by its absolute monarch.
The tiny southern African kingdom needs to take urgent action as it struggles to maintain spending on HIV/Aids, education and the elderly, the IMF warned after a two-week fact-finding mission.
“The fiscal crisis has reached a critical stage,” the global body said. “Government revenue collections are insufficient to cover essential government expenditures.”
The IMF’s Joannes Mongardini told the BBC that the Swazi government had “owed” m in grants to orphans and m to elderly people since September. More than 25% of Swaziland’s adult population were infected with HIV/Aids, and tens of thousands of children orphans, he added.
The government has blamed its financial problems on the global crisis and a sharp decline in income from the Southern African Customs Union (Sacu), following a new tariff deal.
But civil society activists claim extravagant spending by King Mswati III and his 13 wives has exacerbated Swaziland’s slump. The British-educated monarch has a fortune estimated at anywhere between 0m and 0m, while the majority of Swaziland’s 1.4 million people live in absolute poverty.
This year has witnessed unprecedented street protests and calls for the overthrow of Mswati, although these have fallen short of the uprisings in north Africa.
In power for 25 years, Mswati is said to have been particularly upset last month at the killing of Libya’s Muammar Gaddafi, a close friend.
Despite the pressure, Mswati, who did not meet the IMF delegation because of a month-long religious retreat, has declined to accept a 0m bailout from neighbouring South Africa due to its demands for political reform.
The IMF, World Bank and African Development Bank have also made clear any assistance will carry political strings.
Opposition groups are demanding the lifting of a ban on political parties and the release of five political prisoners.
Mary Pais Da Silva, co-ordinator of the Swaziland Democracy Campaign, said: “The king is living in luxury while his people are dying from poverty and lack of antiretroviral drugs. He’s not interested, he’s not affected.”
She added: “The country is on the brink of economic collapse. Their failure to pay this money and their failure to pay salaries comes back to the fact that they are refusing the conditions imposed by South Africa because they lack the political will.
“Only democratic reforms are going to get us out of this situation. No country is going to want to give a bailout with conditions as they are right now.”
The IMF said proposed spending cuts had been undermined by “overruns” in defence outlays, leading to a 2011/12 budget deficit projection of 10% of GDP. The landlocked southern African country’s original target had been 7.5%.
So far, Mswati’s appointed administration, which oversees what is officially Africa’s most bloated bureaucracy, has kept its head above water by running through central bank reserves and delaying payment of bills, including state wages. By the end of September, those arrears stood at 4m, or 5.3% of GDP.
“This is reducing private sector activity, with various enterprises dependent on government contracts having to lay off workers or shutting down,” the IMF said, forecasting 2011 GDP growth of just 0.3%.
The IMF said the wage bill had also risen because of an increase in security force numbers.
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