7 February 2013

Swaziland: 'Times' Lies Over Economic Recovery

Photo: Nadia Neophytou
File photo: Swaziland Protests in London

The Times of Swaziland newspaper and the kingdom's Finance Minister Majozi Sithole have combined to mislead the Swazi people about the state of the economy.

Under the headline 'Financial crisis in Swaziland is over - IMF', the newspaper reported, 'It is now official; Swaziland is out of the financial crisis it had plunged into since 2010, the IMF has declared.'

The paper then allowed Sithole to say, 'We have no problems with their assessment that we are out of the crisis.'

But, the IMF never said Swaziland was out of its financial crisis.

The Times and Sithole misrepresented a report called Restoring Sustainability in a Global Environment Options for Swaziland that was widely circulated yesterday (6 February 2013) and written by Olivier Basdevant, Emily Forrest, and Borislava Mircheva.

It was published by the International Monetary Fund, but the IMF clearly stated at the beginning of the report, 'The views expressed in this book are those of the authors and should not be reported as or attributed to the International Monetary Fund, its Executive Board, or the governments of any of its member countries.'

So, no endorsement from the IMF for Swaziland.

The authors do not say the financial crisis in Swaziland is over. They say the opposite.

Commenting on the management of the economy (on page 49 of the report), they say, 'The current economic policy stance in Swaziland is unsustainable over the medium term. On current trends, the fiscal position is likely to deteriorate further, reflecting uncontrolled spending coupled with a projected decline in Southern African Customs Union (SACU) transfers over the medium term.

'Given that external budget financing from donors has not been secured yet and domestic financing is limited, the government is not expected to be in position to repay all its arrears in 2012/13, despite the higher SACU transfers. The financing gap could nonetheless be filled with credible policies aimed at reducing the wage bill by E300 million, thus restoring confidence in fiscal policy.'

There seems to be a concerted effort by Finance Minister Sithole and the Times to mislead the Swazi people and the international business community that the financial crisis in the kingdom is over.

Last month (January 2013), the Times Sunday published an interview with Sithole in which he said the IMF had been 'shocked' by the kingdom's 'economic resurgence' having 'spelled doom for the country a long time ago'.

Sithole claimed receipts of E12.2 billion (US$1.1 billion) due this year to Swaziland, mostly from SACU, meant, 'I can safely say the economy is now under control. We have survived the worst economic challenges ever.'

Media in Swaziland took him at his word - all broadcast news in the kingdom, ruled by King Mswati III, sub-Saharan Africa's last absolute monarch, is state-controlled and one of the two national newspaper groups is in effect owned by the king.

But, once news travelled beyond the Swaziland borders, economists, bloggers, journalists and expert observers on the kingdom pointed out the truth: nothing had changed with the economy.

Swaziland is tied with Somalia as having the worst performing economy in Africa and the government continues to have one of the highest public sector wage bills per capita in sub-Saharan Africa. It cannot fund health and social welfare projects, but continues to waste millions of emalangeni bankrolling King Mswati, his 13 wives and a Royal Family so large, no one is sure how many members it has.

On that occasion Sithole was forced to climb-down and admit the economy had not recovered. The Weekend Observer, one of the Swazi king's newspapers, reported him saying the receipts from SACU and money collected internally from taxes did not necessarily mean that the kingdom had overcome its financial woes but only that this came as some form of relief.

The Observer reported that Sithole granted the newspaper an interview after, 'Commentators from outside our border, also said the minister's pronouncements were not in tandem with the obtaining situation on the ground.'

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File photo: Swaziland Protests in London

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