Swaziland’s worsening fiscal crisis has sown division in the highest echelons of power. Senators strongly protested against the cabinet’s decision to cut their salaries, and echoed the country’s progressives in calling upon Prime Minister Barnabas Sibusiso Dlamini’s government to resign.
“We can’t give our money to the same government that admitted to losing R80 million a month to corruption,” said senate president Gelane Zwane.
While the House of Assembly reluctantly agreed to a proposed 10 percent wage cut, senators have adamantly dared the government to slash their salaries. All other politicians including the cabinet, advisers to the monarch and constitutional boards have accepted the 10 percent pay cuts.
The inevitable, however, happened on Friday when politicians received salaries with the 10 percent cut.
Civil servants have also said they might consider pay cuts under a new political dispensation. But the government did not cut their salaries as expected this month.
“We’re still firm in our decision against the pay cuts,” Swaziland National Association of Teachers general secretary Muzi Mhlanga said. “We can only consider wage cuts under a multiparty democracy.”
The government is trying to reduce the wage bill, which exceeds R300m every month.
“On Monday, senate will decide on the next step after cabinet’s decision to cut our salaries against our will,” Zwane said.
Of the 32 senate members, King Mswati III appointed 21 while the rest were elected by the House of Assembly.
The cabinet forced wage cuts on senators after a standoff between the senate and cabinet, where the latter refused to withdraw the contentious Circular Number 1 which awards politicians lucrative perks costing the government R60m a year.
The debate on wage cuts has led to Finance Minister Majozi Sithole offering to resign if the parliament decided he was the cause of the problem.
The prime minister said on Friday that it was clear that considerable sacrifices were needed in public sector pay.
“Government is facing difficult cash flow problems, especially projections of May and June. That’s why government is taking steps to reduce spending so that expenditure is matched by physical cash.”
While the government cuts salaries, inflation is at 5.53 percent and is projected to rise to 8 percent this year.
“I had already committed the money which was taken from my salary,” Zwane said. “This means we’re going to lose our houses, cars and fail to pay school fees for our children.”
Just when the government thought its fiscal crises were getting better after receiving what the prime minister called a letter of comfort last month from the International Monetary Fund (IMF) to facilitate a R1.2 billion loan from the African Development Bank and World Bank, it looks like the problem is far from over.
An IMF mission, which was in the country between May 4 and May 18, painted a bleak future for the country.
And the government failed to live up to the expectations of a programme approved by the IMF in April. It missed on the overall financing of the budget by R581m and on domestic payment arrears by R59m.
In April the government strengthened its security as it prepared for what was meant to be the biggest demonstration by trade unions. Workers called on the government to vacate office after the fiscal crises that are also threatening their jobs.
The government’s Fiscal Adjustment Roadmap calls for the retrenchment of 7 000 public servants.
Workers demanded that King Mswati III introduce a multiparty democracy and put in place a government accountable to the people.
While the government succeeded in silencing dissenting voices, through security forces, the fiscal crisis does not seem to be going anywhere.
The huge deficit is financed through significant domestic borrowing, with arrears at R1.3bn, and drawing from deposits from the Central Bank of Swaziland. This has resulted in a decrease in foreign reserves to 2.6 months of import cover.
The government, therefore, has no choice but to cut the wage bill by R240m a year as advised by the IMF.
“Our civil service is excessive in numbers and cost in relation to gross domestic product and simply cannot be sustained at the present and expected level of government revenue,” Dlamini said.
The IMF advised the government to implement a voluntary early exit package and to privatise public enterprises.
It was up to the government though to decide on which IMF advice to use and which to discard, Dlamini said.
“Not every bit of advice is palatable or even practical.”
As things worsen, the government intensified revenue collection through the Swaziland Revenue Authority (SRA).
SRA commissioner-general Dumisani Masilela said he was concerned about the impact of the state of the economy on revenue collection. - Mantoe Phakathi