7 May 2018

Swaziland: Swazi Govt 'Runs Out of Cash'

opinion

The Swazi Government has run out of cash and is living hand-to-mouth. It has to wait for the Swaziland Revenue Authority to put tax collections into its account each Monday before it can pay bills.

The revelation was made by the Sunday Observer (6 May 2018), one of the newspapers in Swaziland in effect owned by the kingdom's absolute monarch King Mswati III.

In March, Martin Dlamini, the Finance Minister announced the Government owed its suppliers E3.1 billion.

The newspaper reported that the latest cash crisis to become public knowledge involved mothers who received child maintenance payments through the Deputy Prime Minister's Office. This involved fathers who are public servants and have court orders against them for maintenance payments that are collected through salaries. The Times of Swaziland, the only independent daily newspaper in the kingdom, had reported that the money had been collected but not passed on to the mothers. Instead, it had been used by the government to pay debts. About E600,000 (US$48,000) is reportedly collected for maintenance payments each month.

The Observer reported that payments were being delayed. It said government was 'living-hand-to-mouth' and issuing cheques in 'dribs and drabs'.

The newspaper reported, 'According to well-placed Ministry of Finance sources, there is no money in government's coffers and the situation has bred a system of wait and see before cheques are printed.'

It quoted the source saying, 'Government has no money so what we do is stall printing and issuing because they will bounce causing embarrassment.'

The newspaper said government depended on the Swaziland Revenue Authority. 'Every Monday they sweep money from their collections account into government's consolidated funds.'

Although the newspaper reported government waited for funds from the Swaziland Revenue Authority no mention was made of two other sources of funding. The King holds 25 percent of all mining royalties and controls Tibiyo Taka Ngwane, a conglomerate that includes, Dalcrue Agricultural Holdings, Inyoni Yami Swaziland Insurance, Royal Swaziland Sugar Corporation, Ubombo Sugar Limited, Bhunu Mall, Nedbank Swaziland, Simunye Plaza, The Swazi Observer, Tibiyo Properties, Maloma Colliery, Parmalat Swaziland, Swaziland Beverages and Swazi Spa Holdings.

The King holds these 'in trust' for the Swazi nation but no records are made public of how profits are spent. In 2016 it was reported Tibiyo Taka Ngwane had revenues of E239 million and assets worth E1.8 billion.

Last month Swaziland held so-called 50/50 Celebrations to mark the King's 50th birthday and the half-century anniversary of the kingdom's Independence from Britain. The Swazi Government has been coy about the costs of the celebrations.

On 19 April 2018 King Mswati wore a watch worth US$1.6 million and a suit studded with diamonds at a party for 700 guests. Days before he took delivery of his second private jet. This one, an A340-300 Airbus had a purchase price of US$13.2 million, but with VIP upgrades it reportedly cost about US$30 million, paid or out of state funds.

The King also has 13 palaces and fleets of top-of-the-range BMW and Mercedes cars. His wives regularly travel the world on shopping sprees costing millions of dollars. Meanwhile, seven in ten of the 1.1 million population live in abject poverty on incomes less than the equivalent of US$2 per day.

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.

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