Former US ambassador to Swaziland John Sprott felt the need to justify the existence of a fully staffed embassy in the tiny country rather than a mere consulate when a large US embassy was in Pretoria just three hours away.
“I told state (the US State Department) that if there is a collapse in Swaziland there will be a major refugee problem in South Africa and a problem for the region,” Sprott said.
That was almost 15 years ago, when the situation in the kingdom was relatively sanguine. But a steady economic decline since then documented by the International Monetary Fund (IMF) in periodic warnings has since last month shown signs of a worsening slide.
Unpaid government suppliers fear that their business may have to close, government vehicles lack petrol, and a massive loan to government coffers from the central bank to cover short-term necessities like civil servant salaries all suggest an accelerating crisis.
Should South Africans fear an influx of Swazi economic refugees? South Africa’s government has expressed no alarm about Swaziland’s economic crisis, but a potential tsunami of Swazis seeking jobs (while their domestic unemployment escalates) and health services (while the underfunded local health care system fails) would not be heading Mozambique’s way for relief.
“Although we deal with incoming refugees and not outgoing – we had many refugees in Swaziland from South Africa and Mozambique in the 1990s – Swazis (seeking employment) will go to those neighbouring countries,” said Mildred Lukhele, a financial officer for the refugee aid organisation Caritas, located in Manzini and financed by the UN High Commission on Refugees.
South Africa has always drawn Swazis seeking jobs, from a century ago when Queen Regent Labotsibeni urged Swazi men to find employment in South African mines to earn money to buy back lands confiscated by British colonial authorities. The 11 border crossings offering egress to South Africa are perpetually busy.
Trade and human traffic has always been controlled and manageable. But what will happen when the occasional individual jumping a border fence multiplies by the thousands? The IMF recommends a reduction of Swaziland’s government workforce by a third, by about 10 000 people. Prime Minister Sibusiso Dlamini cautioned that such a reduction would bring civil unrest.
Every Swazi worker supports 10 dependents according to the Central Statistics Bureau, and unemployment is already at 40 percent.
Government’s compromise is to cut 7 000 public sector jobs next year. Government is Swaziland’s largest employer, but also the essential customer for dozens of businesses.
“It is appreciated that government is facing a problem, but unfortunately some businesses, especially the SMEs (small and medium enterprises) are likely to close their operations if the problem persists,” said Ambrose Dlamini, the president of the Federation of Swaziland Employers and Chamber of Commerce.
With private property scarce in the kingdom, investors with ambitions larger than renting office space or a shop must negotiate for use of the huge tracts of land controlled by the government.
However, this week the ministry of housing and urban development suspended the sale or lease of all government land indefinitely.
“Whether they realise it or not, or care or not, with this decision they have also suspended foreign direct investment into Swaziland indefinitely,” said a US business executive whose planned investment depends on the lease of a government-owned structure.
If the government’s inability to honour commitments to its health and social services partners continues, a breakdown in these services is inevitable.
“Swazis can be passive and I fear many will simply die if they can’t get treatment here, but there are thousands who will go to the facilities in South Africa. The South African hospitals can’t turn them away, because it is a humanitarian crisis,” said Alex Mnisi, an HIV testing and counselling officer who works in Manzini.
You won’t find information about the money crunch on the government’s website. This week the internet server that manages the site yanked it from the web because of an unpaid R100 000 bill.
“It’s not a cash flow problem, like government says. It’s a structural problem. The public payroll is bloated way beyond what this country needs, as the IMF has been saying for years,” said an economist attached to the Mbabane branch of a South African bank. “The banking sector is still inaccessible to a majority of Swazis who can’t avail themselves of financial services, and spending on non-essential big-ticket projects is still prioritised.
The eventual end of the global recession will not remedy Swaziland’s economic crisis and the concomitant scenario of Swazis seeking jobs and humanitarian relief in South Africa. The IMF has noted that Swaziland’s economic decline pre-dates the current global slump by years, while other SADC (Southern African Development Community) countries were seeing robust gross domestic product (GDP) and foreign direct investment growth rates.
“When the rest of sub-Saharan Africa was growing over the past decade, the economy of the Kingdom of Swaziland stagnated,” the IMF reported.
“Swaziland’s real per capital GDP growth declined from an annual rate of 2.5 percent during 1980/94 to 0.7 percent since then.
“In contrast, real growth in all of sub-Saharan Africa has averaged 1.5 percent annually since 1995, and in other lower-middle income countries growth averaged 7.5 percent,” the IMF noted.
As culprits the IMF points to, among others, the government’s non-essential spending priorities and the inability of the export sector to boost the economy.
Even if government can curb excess spending, causes for economic underperformance will not have been addressed.
How will jobs be created? How will social services be funded?
Will the response of South Africa be a rollout of the welcome mat, or some other reaction? – Independent Foreign Service