Public service pensioners marched through the streets of the Swaziland capital on Tuesday (17 April 2018) to protest at plans by the unelected government to ‘loot’ their pension funds.
They were led by the Swaziland National Association of Teachers (SNAT) with the Trade Union Congress of Swaziland (TUCOSWA), Swaziland Youth Congress (SWAYOCO) and representatives of other trade unions. They delivered petitions to government ministries in Mbabane, and to parliament at Lobamba.
They want a decision to take their Public Service Pension Fund (PSPF) under government control reversed.
In Swaziland, King Mswati III rules as sub-Saharan Africa’s last absolute monarch. Political parties are banned from taking part in elections and the King appoints the Prime Minister and other top ministers. Advocates for democracy are prosecuted under the Suppression of Terrorism Act.
Pensioners fear money in the PSPF will be misused by government. On Friday the King took delivery of an A340 Airbus, his second private jet. It was paid for out of public funds and may have cost as much as US$30 million. The King also has 13 palaces and fleets of top-of-the range BMW and Mercedes cars.
Meanwhile, seven in ten of the estimated 1.1 million population live in abject poverty with incomes less than the equivalent of US$2 per day.
The Swazi Observer, a newspaper in effect owned by the King, reported on Wednesday the pensioners said the PSPF was ‘now at risk of being depleted by government’. It added they said ‘government will find it easy to loot the pensioners’ money’.
In a separate development, the Swazi Government intends to compel insurance companies and retirement funds in the kingdom to invest at least 50 percent of their funds in Swaziland. At present, the requirement is 30 percent.
Financial Services Regulatory Authority (FSRA) Chief Executive Officer Sandile Dlamini told local media as at December 2017 total assets held by retirement funds and insurance companies were E32 billion (US$2.66 billion), with less than E5 billion invested locally.
In his budget in March 2018 Minister of Finance Martin Dlamini said foreign-owned banks in Swaziland would be expected to pay 2.5 percent of their annual income to the government. This prompted warnings from the banks that they might leave the kingdom.
Swaziland’s economy is in freefall and has been for many years. Government increased Value Added Tax by 1 percent in the budget. State pensions for people aged 60 and over were frozen, but E5.5 million was earmarked to buy the Prime Minister Barnabas Dlamini a retirement home. E1.5 billion will be spent on a conference centre and five-star hotel to house an African Union summit.
Finance Minister Dlamini listed a catalogue of problems during his budget speech on 1 March 2018. He said he took his lead when constructing the budget from the King who in his speech opening Parliament in February 2018 commanded his government, ‘to prepare a budget that is based on available resources’.
Dlamini told Parliament, ‘The public sector has grown at a much faster pace over the years creating significant dependency in the economy and compromising growth and employment creation. This has led to the large size of government, increased the wage bill significantly, and limited the space for social and infrastructure spending.’
He added, ‘Government spending continues to outpace its ability to raise enough revenues resulting in cash flow challenges and accumulation of arrears.’
He said the Government owed E3.1 billion to its suppliers for goods and services and it was trying to find ways to find money to repay these debts.
Dlamini added, ‘In recent years, Government has not been able to raise enough revenues to cover the ever increasing expenditures, which is a clear indication that the current Government model cannot be sustained in the medium-term.’ He announced a freeze on all government recruiting.
The cost of food in the kingdom rose 19 percent in 2016 and a further 2.6 percent in 2017. The slowdown in price increases was put down to improved weather conditions for agricultural production after a drought.
Transport costs rose 9.6 percent in 2016 and a further 3.9 percent in 2017. Communication costs (mainly phones) rose 4.7 percent in 2016 and by a further 0.4 percent in 2017.
Swaziland has been given a B2 rating (on a scale from A – C) with a ‘negative outlook’ by international credit rating agency Moody’s, Dlamini said. The poor rating is ‘due to the financial and economic pressures we continue to face’, he added.
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