The Swazi economic crisis is getting more desperate as the South African loan to the Kingdom lies in limbo.

Business is one of the most affected sectors as the government fails to pay suppliers who are already in arrears with financial institutions.

“When approval of the loan was announced we were very optimistic that government would prioritise paying suppliers,” Federation of Swaziland Business Community vice-president Hezekiel Mabuza said.

However, since South Africa approved a R2.4 billion conditional loan to its cash-strapped neighbour in August, the kingdom has not received a cent of the money that was meant to be released in three tranches from the SA Reserve Bank to the Central Bank of Swaziland (CBS).

The first instalment was supposed to be made at the end of August, then October and the last one in February, according to Finance Minister Pravin Gordhan.

CBS governor Martin Dlamini said the banks were waiting for the two governments to sign the memorandum of understanding (MOU) regarding the loan.

“The signing of the MOU is a political issue that I’m not conversant with,” Dlamini said. “Otherwise the central bank is ready.”

President Jacob Zuma’s government approved the loan on condition the kingdom undertook confidence-building measures, guided by the Joint Bilateral Commissions for Co-operation agreement, which promotes democracy and the respect of universal human rights.

While the government has not come out to clarify the delay surrounding the loan, a senior royal family member and adviser to King Mswati III said the country could not be sold for a paltry R2.4bn.

Prince Mahlaba criticised South Africa’s conditions, arguing that they would allow for political parties, which do not freely operate in the kingdom.

Swaziland also failed to meet the International Monetary Fund’s conditions, particularly the cutting of public servants’ salaries to reduce the wage bill.

Since then the loan issue between the two governments has been deadlocked, and the Swazi economy continues to crumble.

President of Federation Swaziland Employers and Chamber of Commerce Tineyi Mawocha said the judicial crisis was not helping the situation.

Courts are grounded after a private lawyers’ boycott following a fallout with Chief Justice Michael Ramodibedi, whom they accused of mismanaging the judiciary. It has been two months now since lawyers downed tools.

“Business is reeling under pressure,” said Mawocha, who is also the managing director of Standard Bank Swaziland. “People are struggling to service their loans.”

Mawocha said that while banks were doing their best to help government suppliers, who are defaulting because of the fiscal crisis, there was a limit to the grace period.

Because financial institutions are also guided by regulations, explained Mawocha, repossession could not be ruled out once the grace period was exhausted.

“But with the ongoing judicial crisis where courts are grounded we can’t even repossess because we need the strength of a court order to be able to do so,” Mawocha said.

Business is not the only sector feeling the pinch – schools have not opened on time owing to government’s failure to pay for Free Primary Education and orphans and vulnerable children.

The opening of the University of Swaziland was also delayed because the government did not have enough money for scholarships.

The government has also announced that there is no money to pay the quarterly elderly grant of R600 to over 40 000 beneficiaries.

The construction of the multi-million Sikhuphe International Airport remains grounded because there is no money to pay suppliers and contractors.

Although the Swaziland Revenue Authority, launched in March, has exceeded its R1.35bn target by collecting R1.6bn it looks like more needs to be done to get the Swazi economy back on its feet after the country’s Southern Africa Customs Union share was reduced by 60 percent last year. - Mantoe Phakathi