Swaziland no longer needs SA loan

MANZINI – Swaziland will no longer pursue a R2.4 billion loan from SA because the money is no longer needed, Swazi finance minister Majozi Sithole said last week. “I can safely say the economy is now under control. We have survived the worst economic challenges ever,” said Sithole. A windfall from the Southern African Customs Unions (Sacu) makes the loan superfluous, Sithole said. This year Sacu receipts of R7.1 billion are up from R2.8 billion received in 2011/12. The Sacu receipts, combined with R4.8 billion gathered from local taxes, including the introduction of VAT in 2012, puts R12.2 billion into the Swazi treasury. This is enough to pay the bills for now, Sithole said. The controversial loan from SA was sought during King Mswati’s visit to SA in August 2011. No MoU for the loan was ever signed, however. The SA government was criticised domestically for loaning out a substantial amount of money during an economic recession when the funds might be used as a stimulus at home. In November 2011, Swazi foreign minister Mtiti Fakudze led a delegation to Pretoria to finalise a loan agreement with his SA counterparts, having unilaterally removed codicils committing the Swazi government to dialogue with political opposition groups as a condition for receiving the money. The rewrite created an impasse which put the loan in limbo. The loan conditions also committed Swaziland to adhere to International Monetary Fund (IMF) advice on economic reform, which also reportedly irritated the Swazi leadership. The Swaziland government has been at loggerheads with the IMF for years, particularly on the subject of government spending. INSERT ‘I can safely say the economy is now under control.’ – Swazi finance minister