Thursday, May 19, 2011


Times of Swaziland

19 May 2011


Retrench 7 000 now

MBABANE –Swaziland has been advised by the IMF to implement the enhanced voluntary early-retirement scheme – EVERS – without delay.

This will be one of government’s means to try and reduce its wage bill, which is considered to be one of the highest in Southern Africa.

About 7 000 civil servants have to go home for the process to have an effect on the wage bill.

The Fiscal Adjustment Roadmap that was adopted by Swaziland last year aimed at reducing the civil service by 20 per cent through implementation of EVERS but the scheme was suspended after government workers’ unions vehemently opposed it.

In its statement released yesterday, the IMF said: "The mission continued to encourage the authorities to find means to cut the wage bill by E240 million, as envisaged under the programme, and to implement without delay the voluntary early retirement scheme, EVERS."

This comes after the International Monetary Fund found Swaziland’s fiscal adjustment roadmap not to be on the right track.

At the conclusion of its mission in the country, the IMF said under its Staff-Monitored Programme, Swaziland’s performance was mixed.

Firstly Swaziland missed two fiscal quantitative targets; the first being overall financing of the budget which was off the mark by E581 million (1.9 percent of GDP), the second was in respect of payment of domestic arrears which was off the mark by E59 million (0.2 per cent of DGP).

The other missed target was on the net international reserves of the Central Bank, which was off the mark by $34 million (approximately E238 million).

The only target that was met, the IMF said, was on the structural side, which is the benchmark of commitment register in all line ministries.

"However, the end-April benchmark on the submission to Parliament of amendments to the income tax order was missed.

"The authorities have indicated that they now expect the order to be submitted in June. Discussions to bring the programme back on track will continue and performance will be released in August 2011, based on end-June targets," the IMF said in its statement.

The organisation said it had agreed with views of Swaziland’s authorities that government was faced with severe liquidity constraints over the coming months.

"In this context, the mission advised the government to take immediate measures to cut expenditure and mobilise additional financing in order to avoid the accumulation of additional payment arrears, including on wages. A large fiscal adjustment is needed to bring the programme back on track and reduce the fiscal deficit in line with available financing," the statement reads.

...get second cellphone company

MBABANE – The International Monetary Fund has called for the proposed sale of an international tender for a new mobile licence to be implemented.

It also stated that it is in full support of government’s plan to privatise the SwaziBank.

These two initiatives were first announced by Minister of Finance Majozi Sithole in his budget speech last February.

For SwaziBank already there is rumour that a number of institutions, including a local investment company, have formally indicated intentions to buy the bank.

Besides backing these plans, the IMF said it "also recommended the mobilisation of additional sources of domestic financing, including through the divestiture or the scrutinisation of other government assets".

During its previous visit to the country, the IMF had advised government to sell some of its shares in local institutions, including those with local financial institutions.

Govt, IMF in bid to cut SD’s spending by E900m

MBABANE – Government and the IMF want to cut the country’s spending by E900 million.

Already, the IMF said, the spending cuts have been identified and could improve the country’s fiscal position if implemented ‘swiftly’.

"This and the continued structural impediments to growth are projected to dampen the real GDP growth to -1.9 per cent in 2011. Consumer price inflation is projected to rise to about eight percent in 2011, reflecting higher domestic taxes and levies on various products, as well as the increase of international food and fuel prices," the IMF said.

It added: "Mirroring the sharp fiscal adjustment, the current account would improve to 12.3 per cent of GDP."

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