There has been a lot of criticism and questions about the issue of Swaziland getting a large loan from South Africa to help overcome its financial crisis. Some argue that South Africa should not have approved the R2,4 billion loan to a government that has been wasting money, while most of the people are living in poverty.
Some argue that South Africa should not have approved the R2,4 billion loan to a government that has been wasting money, while most of the people are living in poverty.
The country has been rocked by recent protests after civil servants said they had not been paid. The crisis also caused the University of Swaziland to cancel classes. In addition, there are reports that the country, which has a high HIV infection rate, is running out of supplies of antiretroviral drugs to treat the disease.
Swaziland was plunged into a financial crisis following the worldwide economic downturn in 2009, which caused a drop in income from the Southern African Customs Union. This is a customs sharing scheme between South Africa, Botswana, Lesotho, Namibia and Swaziland. King Mswati tried, but failed to get cash from other sources.
The economic and political downfall of Swaziland will not only affect the Swazi nation, but will also have a negative effect on its neighbouring countries, especially South Africa.
It could lead to a situation similar to that in Zimbabwe, where the economic and political crisis forced a flood of illegal immigrants to seek refuge and jobs in South Africa.
Helping to stabilise the situation in Swaziland, the loan from South Africa will prevent a similar a situation from arising there.
“The loan guarantee was on condition that the government of Swaziland undertakes confidence-building measures, guided by the Joint Bilateral Commissions for Cooperation (JBCC) Agreement,” the Minister of Finance, Pravin Gordhan said.
The JBCC Agreement promotes the principles of democracy, respect for universal human rights and the rule of law. Minister Gordhan added that Swaziland would have to give renewed energy to these principles by extending the discussion process to include all interested parties and citizens of the country.
He gave the assurance that the money was provided by the South African Reserve Bank on a 5,5 per cent interest rate.