Ezulweni: The International Monetary Fund has likened Swaziland’s current dire financial situation to "a good party that has come to an end". Joannes Mongardini, leader of the IMF team that is presently in Swaziland, said, when every party comes to an end those who have been enjoying themselves must come face-to-face with reality. He said Swaziland’s ‘party’ was based on the country’s receipts from the Southern Africa Customs Union, which have drastically declined.
"When you look at the budgetary situation of Swaziland, it is like a good party that has come to an end. When there is a party, it is easy for people to drink, eat and dance but when the music stops it is up to the people to adjust to the realities on the ground," Mongardini said.
His description of the Swaziland situation was termed by Dumisani Masilela, Commissioner General of the Swaziland Revenue Authority, as a ‘powerful analogy’.
Mongardini made this statement yesterday at the Royal Villas during an ‘open stakeholder dialogue on the 2011-2012 budget and Fiscal Adjustment Roadmap’ which was attended by Minister of Finance Majozi Sithole, EU Ambassador representatives of United Nations agencies, the World Bank, the African Development Bank, Members of Parliament, employers and civic society groups.
Mongardini said the most daunting challenge with the 2011/2012 national budget was the availability of finances to implement it. The IMF representative said even though Swaziland’s financial situation is dire, the country has, however, not reached an insolvency crisis.
"It is a liquidity crisis; it is a case of having enough money to carry through the budget," Mongardini said, noting that time had come for Swaziland to adjust to new realities and to make sacrifices along the way. He outlined that the successful implementation of the Fiscal Adjustment Roadmap was very critical in ensuring that Swaziland came up with the revenue to help finance the national budget.
Mongardini said one of the short-term measures for government would be to draw significantly from the Central Bank as well as commercial banks.
"Banks need to provide short-term financing to avoid wage arrears by government. Pension Funds also have to provide financing. We also have to use proceeds from privatisation to reduce debt financing," Mongardini said.
He continued: "The government liquidity needs in the short-term are high and require the Central Bank, banks, and pension funds to contribute."
Mongardini said the IMF was pleased to note that Swaziland had taken some of the advice they had given the kingdom, especially regarding the health and education sector.
"The IMF of today has changed from that of the 80s but we are now much more policy advisors rather than dictating policies," Mongardini said and gave the example of Mozambique, where he said the IMF had helped to grow its economy to 78 per cent through a 10-year programme run in that country.
"We know there are challenges facing Swaziland and we hope the international community will help," he added.
* Majozi clashes with PS Madlopha
EZULWINI - Finance Minister Majozi Sithole yesterday clashed with Ministry of Public Service Principal Secretary Evart Madlopha regarding the proposed wage freeze for civil servants.
It began when the principal secretary wanted to know from the minister whether the wage freeze was a policy or a mere suggestion.
"We have a highly unionised civil service and they will be asking about the meaning of a wage freeze because there are the cost of living adjustments which are provided for by the Collective Agreement government has with its employees. We need to be clear what we are talking about," Madlopha said.
The PS said he had not heard of any strategy from the Ministry of Finance on how the civil servants would be assisted in coping with life in the three years when there would be no salary increase.
"How will the civil servants survive when electricity, water, bread and fuel prices are expected to go up. What is the Finance Ministry doing to help the civil servants?" Madlopha queried.
In response, Sithole said he was shocked by Madlopha’s questions because the PS was the one who was representing government at the negotiation table regarding the issue of the wage freeze.
He said, by listening to Madlopha’s questions, it would appear that he took the side of the government employees during the negotiation process yet he had to represent government and convince the workers to accept the wage freeze.
"We are aware that this is a negotiable issue which is why the unions need to be engaged. Madlopha has to win this argument for us - he is responsible for the civil service," Sithole said.
The minister said the wage freeze cannot be imposed on the civil servants because of the existing collective agreement.
"Let us go and negotiate with them. Initially, the workers in their talks with the IMF appeared to be willing to accept the wage freeze just as long as the politicians don’t also give themselves a raise," Sithole said.