Tuesday, February 11, 2020

IMF reports Swaziland public debt rising, foreign reserves fallen ‘below adequate levels’

The economy in Swaziland (eSwatini) continues in free-fall. Public debt is still rising, domestic arrears have grown, and international currency reserves have fallen ‘below adequate levels,’ the International Monetary Fund (IMF) reported.

The growth in private investment is slowing and declining external competitiveness is hindering the kingdom’s growth prospects. Now, 40 percent of the population is living in extreme poverty and unemployment is high.

The IMF report published on Tuesday (11 February 2020) came after the group’s latest visit to the kingdom ruled by absolute monarch King Mswati III.

The IMF reported, ‘Economic indicators are expected to remain weak. GDP growth [the total value of goods and services in the kingdom] is projected to temporarily pick up in 2020, as the government plans to repay some arrears, but growth would be subdued afterwards as fiscal imbalances persist and the private sector remains hamstrung.’

The IMF predicted the government’s deficit was expected to remain large and public debt would rise to above 60 percent of GDP over the medium-term and contribute to further reduce international currency reserves.

Swaziland’s economy has been in freefall for many years. The government which is not elected by the people but handpicked by King Mswati has failed to pay its suppliers. Public services across the kingdom have ground to a halt with reports of people dying for lack of medicines and children going hungry because the government was unable to pay suppliers of meals for children.

Last week (5 February 2020) Swazi Minister of Finance, Neal Rijkenberg said government suppliers and service providers would have to wait six more weeks for their payments. The government had previously promised payments would be made by the end of January 2020. Previously, the deadline for payment had been set at the end of September 2019.
It is unclear how much the government owes and it has itself reported the figure as E4.2 billion and E2.2 billion.

Rijkenberg reported the Office of the Auditor General and the Office of Internal Audit were trying to verify how much was owed. 

In November 2019 the Swazi parliament approved a bill to allow government to seek a E2 billion loan  from the AFREXIM Bank to clear arrears and for other expenditure.

In 2017 Business Insider reported King Mswati had a net worth of US$200 million (about E3 billion in local Swazi currency). The King rules a population of about 1.3 million people and seven in ten of them live in abject poverty with incomes of less than E30 per day. 

See also

Swaziland breaks promise to pay off its suppliers to halt public services meltdown

More deaths in Swaziland as government fails to pay medicine suppliers
Swaziland schoolchildren learn under trees or in tents as government runs out of money

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