Swaziland / eSwatini is broke and ‘is facing an unprecedented economic crisis’, Finance Minister Neal Rijkenberg said on Wednesday (27 February 2019) when delivering the kingdom’s national budget.
The ‘economic outlook remains subdued’, he said. Foreign direct investment into the kingdom ruled by King Mswati III, sub-Saharan Africa’s last absolute monarch, is getting worse – with a contraction of 0.4 percent in Swaziland’s GDP for 2018.
‘The economy has stagnated and we are failing to attract investment as the gap between the rich and poor continues to grow,’ Rijkenberg said. He added that for too long, ‘this economic reality has not been addressed’.
He made no mention of the vast spending by King Mswati and his Royal Family who continue to spend lavishly. The King has 13 palaces and fleets of top-of-the-range Mercedes and BMW cars. He and members of his extensive Royal Family (he has had at least 15 wives) live opulent lifestyles and are often seen in public wearing watches and jewels worth hundreds of thousands of dollars.
The King wore a watch worth US$1.6 million and a suit beaded with diamonds weighing 6 kg, at his 50th birthday party in April 2018. Days earlier, King Mswati took delivery of his second private jet aircraft that with upgrades was estimated to have cost US$30 million.
In recent years public hospitals have run out of vital medicines and schools have closed because supplies of food to feed children have run out. This is because the government failed to pay suppliers.
In Swaziland, seven in ten of the estimated 1.3 million population live in abject poverty with incomes less than the equivalent of US$2 per day.
In his speech Rijkenberg said, ‘A key component of our crisis is Government’s growing wage bill – in the last ten years our wage bill has grown by 125 percent.’
He said receipts from the Southern African Customs Union (SACU) were declining. He said the Swaziland Government’s financial situation was ‘untenable, in the medium term’ as SACU receipts were expected to decline further.
Rijkenberg said in his speech, ‘We are in trouble because our private sector is too small and its growth is too slow. We are in trouble because we have not been balancing our books. We are in trouble because we have not developed a strong policy framework to address the needs of our people. We are in trouble because we have failed to leverage our natural resources, human capital and our strengths.
‘We are in trouble because we have failed to adequately address corruption. We need a holistic, integrated approach that immediately and radically addresses these structural imbalances and failures - one that requires sacrifice, but that ultimately benefits every Liswati [Swazi person], especially the poorest and most vulnerable.’
He warned, ‘We have to grow our economy, create jobs, and attract investment. We have to educate our children, care for our sick and provide a social safety net for our most vulnerable citizens. We do not have the luxuries of time and infinite resources. We must act now and do so with what we have in our hands.’
He added, ‘Recent history has shown that spending our way out of an economic crisis is not the solution. It is clear that tough measures are required to achieve lasting prosperity. Meaningful growth will be achieved by enabling the private sector to lead and do what it does best, which includes growing our economy and creating employment. Government can no longer be the employer of choice in the Kingdom as it is today.’
Rijkenberg said, ‘Government will do its part to enact new policies and pass the required legislation to de-regulate and open the economy for business. This new, enabling environment will allow the private sector to take the lead, unlocking results like food security, accessible and affordable internet infrastructure, a renewable energy industry, increased tourism and full utilisation of our Special Economic Zones.’
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