Mbabane: Government has dismissed suggestions by the South African Institute of International Affairs (SAIIA) that the country be incorporated into the Republic of South Africa (RSA) as a province. The suggestion was made amidst statistics that Swaziland gets 70 per cent of its budget from the RSA. Such statistics were also disputed by government when responding to questions from this newspaper.
The suggestion was made by Dr Mzukisi Qobo, head of the Emerging Powers and Global Challenges Programme, during a presentation at a SAIIA conference recently. Dr. Qobo also alleged that Swaziland and Lesotho have no claim to sovereignty because of their dependency on South Africa.
The government of Swaziland responded: "There is no such thing as Swaziland being 75% dependant on RSA. This relation speaks to the geographic location of the two countries and its associated history. We export over 70% of our goods to RSA and import about the same amount. These exports and imports are paid for and are not free.
"It is also important to highlight that Swaziland is not getting transfers or handouts from RSA, but her share from the SACU revenue pool. This pool is made up of a collection of customs and excise revenues which is subsequently shared among members through a formula that was agreed by all five member countries.
"It is still our belief, as Swaziland, that the migration from the 1969 formula to the 2002 formula was reached through consensus and all countries agreed that it is reflective of each member’s contribution into the pool. The second point to note is the fact that sovereignty is not necessarily a function of economic development. There are much poorer countries than Swaziland, some of them receiving grants in excess of 50% of total government revenues but still remain sovereign states."
Dr. Qobo also said the declining SACU revenue would make things all the worse for Swaziland - so much that this country’s economy would be impossible to sustain. The government responded by saying it was aware of the changing economic tides that have been brought about by the independence of not just RSA but also Mozambique.
"An enabling environment for economic growth and employment creation has thus changed from the static cushion previously provided by the political woes that our neighbours were facing into a very competitive game. It is for that reason that we have created institutions focusing on not just attracting foreign investors but also encouraging domestic investment (our SIPA, SEDCO, FINCORP, SIDC, etc).
"All these initiatives speak to the fact that nothing would come easy for us as a country and actually there is no country that is having it easy, we are all competing for development and improvements of livelihoods for our people.
"Government is in the process of drafting a Fiscal Adjustment Roadmap that confronts the question of fiscal sustainability head-on. Some of these initiatives in this package have already started to be implemented such as the reduction in government spending. This adjustment programme targets at not just reducing spending but also increasing revenues as well as stimulating private sector growth."
Responding to SAIIA’s suggestion that Swaziland would be better off incorporated into South Africa as a province, government said: "Forget it, it will not happen."
How SD will reduce dependency on SA
Mbabane: Government says tightening its belt is one of the means to save the economy and reduce dependency on South Africa. When the Prime Minister, Barnabas Sibusiso Dlamini, made his New Year message, he said Swaziland would have to adopt a belt-tightening approach this year.
"The Government of the Kingdom of Swaziland has engaged her co-operating partners in a bid to avoid an economic crisis in the country. This has entailed applying for budget support to smooth out the effects of a sudden and destructive reduction on government spending. This support however does not come free of charge as these are loans that have to be paid in the near future.
"Over and above that, Government has to display that it will be going back to sustainability in the future thus ongoing preparation of the Fiscal Adjustment Roadmap, which is a comprehensive strategy of bringing our economy to a sustainable path."
Government says if the dependency was understood in the context of trading more with South Africa, it should not be a cause for concern. "It makes economic sense to have close ties with your neighbour. You produce and sell to them what they need and you import from them what you need. This is what trade is about and what SADC and SACU advocate."
Finance Minister Majozi Sithole had also said statements that SA gives Swaziland aid money were a misconception because the country was entitled to its share of the SACU revenue.