The R7 billion (US$879 million) Southern African Customs Union (Sacu) payout to Swaziland for the 2012-13 financial year could keep King Mswati III's tottering government afloat for much of this year.

It will cover approximately half the national budget and, crucially, will enable him to continue paying the R366-million monthly wage bill - pacifying the powerful public sector unions which provide the muscle to Swaziland's resurgent pro-democracy movement.

Sacu revenues are crucial for Swaziland. Last year a change in the formula of Sacu disbursements to the customs union's five members slashed Swaziland's share by 62%, to R1,9-billion, precipitating an economic crisis that fuelled opposition militancy and threatened to topple Mswati's rule.

Now, with opposition formations in some disarray (Vol 30 No 1), Mswati has won some breathing space.

But his track record suggests he will not use it to alleviate and repair the country's social and health catastrophe, a major cause of Swaziland dystopian condition, in turn a product of the autocracy.

Prime Minister Sibusiso Dlamini says the money is needed to repay loans from parastatals and private companies - borrowed towards the end of 2011 to pay the wage bill. This amounted to about R1,4 billion.

Dlamini has been tight lipped on what the Sacu windfall will be used for. There is good reason to suppose that Mswati will squander much of it on resuscitating his large vanity construction projects, among them a second international airport and royal technology park, as well as private investment schemes to boost his already bloated state earnings.

The government has repeatedly come close to defaulting on salary payments to public servants, and the powerful public sector unions have twice forced the government to scramble to pay up or risk a general strike.

The drop in Sacu revenue has been the single biggest external factor undermining the Swazi economy. Coupled with a general lack of fiscal planning and spending surreally skewed to providing for the massive royal family and the monarch's grandiose projects, the economy had been artificially cushioned by Sacu payments.

This all came to an end in late 2010 when the revenue payments were cut. In 2008 the country had received R6,6 billion from Sacu and in 2009 R5,2 billion. The unexpected 2012 increase has been billed as a return to the years of plenty.

In addition, the new Swaziland Revenue Authority (SRA), which took over the system of inefficient tax and customs operations from different government departments in January 2011, has significantly tightened up the system of customs revenue declarations at its border posts, resulting in increased payments into the Sacu's Revenue Fund.

Faced with the massive drop in Sacu revenue at the end of 2010, Mswati cast around for creditors, at first approaching the African Development Bank via the International Monetary Fund, and then South Africa, from which he had initially hoped to borrow R10 billion. Pretoria's eventual offer of R2,4 billion, made last August, came with terms and conditions that include moves towards democratisation.

Mswati balked and refused to sign the memorandum accepting the loan. But he has tried to impress South Africa that the door to democratic change remains at least ajar by stage-managing a semblance of civil society-government conviviality, mainly using malleable figures on the periphery of the pro-democracy movement and the churches.

Mswati's "reforms" have meant little for frontline anti-government activists in the trade unions and the still-banned People's United Democratic Movement (Pudemo). Opposition formations are planning countrywide protests for 12 April, the anniversary of the imposition of royal diktat in 1973 by Mswati's predecessor Sobhuza II.

Mswati's overtures to the opposition have been at best desultory and he is keen to avoid unbanning political parties ahead of next year's heavily circumscribed Tinkhundla elections. But he does not want to be seen to reject Pretoria's offer outright. His mandarins still refer to being "in talks" with South Africa on the bailout, which they repeatedly depict as on the verge of completion.

The R7 billion will come in four payouts of R1,75 billion each, starting in April. Mswati has reportedly already earmarked part of it to pay for refining in South Africa of crude oil to be shipped from Equatorial Guinea to Swaziland via South Africa, under a deal struck between Mswati and President Teodoro Obiang Nguema Mbasogo, during a brief visit to Mbabane earlier this month - a thinly disguised bribe to persuade Mswati to break ranks with other SADC countries in the vote for a new African Union Commission chair.

The project is ostensibly designed to ease fuel supplies and prices in Swaziland, with an undisclosed cut of the profits going to the king. The deal will "stabilise the country in numerous ways", gushed a spokesperson of the National Consumers Association; the Fuel Retailers Association was reportedly "excited" by the deal. But anti-government groups have criticised the scheme as a private business deal for Mswati, showing "the middle finger" to any notion of SADC and South Africa's ideas of regional economic progress.

Meanwhile, the government continues to try to force public servants' unions to entertain the 5-10% salary reductions and 7 000 jobs cuts suggested by the IMF.

Talks at the public service ministry between government officials and the civil servants and teachers unions remain deadlocked. They even turned to protest last week when public servants' union president Quinton Dlamini sang Nkosi Sikelel' iAfrika when Public Service Minister Magobetane Mamba requested that delegates pray at the start of negotiations - having already shocked government representatives by turning up in his trademark South African Communist Party cap and shirt. He is now under threat of prosecution.

The government also shows no sign of devoting any funds to alleviate the burgeoning food crisis in the country (Vol 29 No 27), now compounded by the destructive toll on subsistence farming of drought interspersed by flash floods. With the prices of meat, maize, milk and eggs all expected to rise this year, the impact on the 60% of Swaziland's 1 million people who live in poverty will exacerbate Swaziland's social catastrophe.

And orphans and vulnerable children (OVCs), who make up about 20% of the population, remain at the sharp end of the government's budgeting, as it continues to default on the OVC fund for education and support, now over R80 million in arrears. Similarly, there is no end in sight to the dearth of drugs for HIV and TB patients - who make up over 26% of the population - or even to ensure stocks of basic supplies for public health clinics.