Swaziland's public spending is so out of control the kingdom has to rely on income from a customs union to pay public service salaries, but it is not enough, Finance Minister Martin Dlamini told Parliament.
The admission comes as hospitals go short of vital medicines, children go hungry at school and elderly peoples' pensions go unpaid. Meanwhile the budget for King Mswati III who rules Swaziland as sub-Saharan Africa's last absolute monarch increases.
Dlamini reported in his mid-year budget review on Wednesday (6 December 2017) that the Swazi Government was at least E2.5 billion (US$180 million) in arrears by the end of July 2017.
He told the House of Assembly that this did not include E619 million which government had been operating on a cash flow deficit at the end of the second quarter, up to September 2017.
He said the funding gap was projected to increase to E4.5 billion by the end of the financial year, 31 March 2018, the Times of Swaziland reported.
He said the kingdom relied on money from the Southern African Customs Union (SACU) receipts as a revenue source for the budget. The newspaper reported him saying, 'Despite its volatility, SACU has now become the only reliable source of payment of civil servants salaries.'
The newspaper added, 'He said it was worth mentioning that even with the higher than average SACU receipts for 2017 which stood at E7.1 billion, government was unable to meet the entire wage bill obligations through this source of revenue.'
The money from SACU was only enough to cover 2.5 months of salaries in each quarter, he said.
The Swazi Government which is not elected by the people but handpicked by King Mswati has lurched from one financial crisis to another for many years. In the past few months it has not paid bills for medicines and food for schoolchildren which has resulted in great hardship among King Mswati's 1.3 subjects. Seven in ten live in abject poverty with incomes of less than US$2 a day.
In November 2017 it was announced there was not enough money to pay people who reached the age of 60 this year their elderly grants (pensions).
In February 2017 King Mswati's budget was increased by US$14 million.
In October 2017 it was reported that the Government was broke and 'living from hand to mouth' and public servants' salaries had been paid late in recent months.
The happened as it was publicly revealed that senior public servants received an 18.9 pay increase that month. Meanwhile, ordinary public servants had been told by government they would get no increase at all this year. A dispute between workers and Government over this continues.
Also in October 2017, it was reported the government had borrowed E1.2 billion from the Central Bank of Swaziland.
In September 2017 the International Monetary Fund (IMF) reported that increased government spending in Swaziland resulted in the highest deficit since 2010. It said the outlook for the future of the economy was 'fragile' and that the medium term outlook was 'unsustainable' without policy changes.
It also said the governance of public entities was poor.
The IMF recommended that the government should contain 'the bloated government wage bill', curb non-essential purchases and prioritize capital outlays.