South African largesse raises alarm for Swaziland's impoverished

South Africa's US$375 million rescue package for Swaziland has caused a storm of protest as it props up the playboy despot who runs the country.
King Mswati III of Swaziland is one of Africa's last absolute monarchs. Ian Jones
King Mswati III of Swaziland is one of Africa's last absolute monarchs. Ian Jones

As far as bailouts go, it is small potatoes, but South Africa's US$375 million rescue package for the tiny kingdom of Swaziland has caused a storm of protest as it props up the playboy despot who runs the country.

Swaziland, the landlocked country on South Africa's eastern border, is ruled by one of Africa's last absolute monarchs, King Mswati III. In May, the country's budget deficit was 14.3 per cent, the same level as Greece's.

Under King Mswati's leadership, this country of just over one million people has been pushed to the edge of bankruptcy, say his many critics, who fear the rescue package will perpetuate his rule and do nothing for a population mired in poverty.

The monarch brooks no opposition, using a tame, unelected parliament to rubber-stamp his decisions. Calls from the IMF and World Bank to cut back on his profligate lifestyle have been ignored.

"It is a wrong decision," says Mario Masuku, the leader of Swaziland's banned opposition People's United Democratic Movement, adding that the bailout was "throwing money into a porous bucket".

The country is in bad financial shape, and has about a $140m (Dh514.2m) debt payment falling due. Without the bailout, Swaziland risked running out of funds to pay civil servants, as well as for vital services such as hospitals.

The decision has been met with protests by opposition activists, businessmen and economists, who say the king uses the national treasury as his personal ATM. An audit by the World Bank and IMF shows $50m in state funds was spent last year by the king's household. The 43-year-old King Mswati has 13 wives - each with her own palace - about 27 children and hundreds of royal hangers-on, all of whom depend on him for their upkeep.

In 2005, King Mswati's decision to buy himself a $500,000 Mercedes Maybach limousine made international headlines, coming as it did amid appeals for aid for his starving countrymen. The same year, he bought each of his wives a new BMW.

According to Forbes, his personal fortune is about $200m. Two thirds of Swazis, meanwhile, subsist on less than $1 a day, and many are forced to live in semi-exile in South Africa, in the hope of finding jobs.

And according to the UN, 40 per cent of the adult population is infected with the HI-virus, making it the highest prevalence of the disease in the world.

The financial crisis has affected treatment of the disease, and desperate patients are reported to be resorting to traditional medicines such as cow dung to fight off the virus.

The country's GDP is $3 billion a year. It exports agricultural and mining produce, and has some tourism. However, up to 60 per cent of its income is from a customs revenue-sharing scheme administered by South Africa. The Southern African Customs Union (Sacu) is the world's oldest customs union. Import taxes collected at South African ports are shared with some of its smaller neighbours, a convention set up by the apartheid government in 1970 to buy their compliance.

The Sacu convention has remained in place ever since, and beneficiaries such as Namibia, Lesotho and Botswana depend on the revenue to balance their books.

But perhaps none more so than Swaziland. Without the Sacu finance, the country would in all likelihood cease to exist.

This should give democratic South Africa enormous leverage over the king, say activists. But so far, Pretoria has been reluctant to lean on Mswati, for fear it would send the wrong signals to other African states. At the same time, South Africa also fears another Zimbabwe-style failed state on its borders.

"It's not in our interest to have an economy in trouble that could place a burden on the South African government," said Pravin Gordhan, the South African finance minister.

Mr Gordhan said he hoped King Mswati would "create space" for political dialogue, but added: "It's not our place to dictate to them."

The monarch, meanwhile, has welcomed the bailout.

"We are thankful, and also appreciate the assistance we have received from South Africa," King Mswati was quoted as saying in the Times of Swaziland newspaper. "This shows that they are good neighbours."

Published: August 16, 2011 04:00 AM


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