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IMF stops its SD project

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MBABANE – Swaziland’s financial crisis faces fresh challenges as the Interna-tional Monetary Fund has stopped its monitoring p-rogramme for government.

This comes after the previous prog-ramme, supported by the IMF management on April 4, 2011, went ‘off-track’, according to IMF representative Joannes Mongardini, in August 2011. Government is yet to propose a financial reform programme that will be supported by a new IMF Staff Monitored Programme.

Such a position means the country’s chances of getting financial assistance from international organisations such as the World Bank and African Development Bank are slim.

These two institutions normally solicit the IMF’s positive assessment of a country’s economic policies before issuing financial aid to it.

Responding to a questionnaire from the Times, Joannes Mongardini, who is head of the IMF mission to Swazi-land, said even though Swaziland was no longer under the IMF Staff-Monitored Programme, "we (the IMF) continue our dialogue with the authorities on ways to improve budget management".

"Government has yet to propose a credible reform programme that could be supported by a new IMF Staff-Monitored Programme. Specifically, the 2012/13 budget included recurrent expenditures that are higher than what can sustainably be financed over the medium term," Mongardini said.

Furthermore, he said: "The budget also does not provide sufficient resources to repay all domestic arrears. Finally, the budget allocates an increasing share of resources to some sectors at the expense of education and health."

Asked about the country’s chances of getting financial aid, Mongardini said that would depend on the executive boards of the various international organisations and the actual circumstances pertaining to Swaziland’s request. "Having said that, it is common practice for the African Development Bank and the World Bank to request a positive assessment of economic policies from the IMF before disbursing financial assistance," Mongardini noted. Minister of Finance, Majozi Sithole, also confirmed yesterday that government was working with the IMF and World Bank in drawing up a new fiscal programme.

"We will be meeting with the IMF and World Bank from April 19 to 23 during the spring meetings, to speak to them about the revised fiscal programme. We recently met with a team from the African Development Bank that was in the country and spoke to them on the fiscal progra-mme going forward," Sithole said.

The minister said meeting with the IMF and World Bank teams was meant to find out if the fiscal programme to be proposed was in line with their expectations.

IMF frowns upon reversal of 10% pay cuts


MBABANE – The Inter-national Monetary Fund (IMF) says the reversal of the 10 per cent wage cuts will have a negative effect on the wage bill.

Responding to a questionnaire from the Times, Joannes Mongardini, Head of the IMF Mission to Swazi-land, said there was still a great need for a reduction of the wage bill.

"The reversal of the 10 per cent wage cut on ministers, royal advisers, and parliamentarians is projected to cost E6 million on the 2012/13 budget. While this is a small portion of the total wage bill of E4.6 billion (one of the largest in Sub-Saharan Africa in relation to the economy, at 15.2 per cent of gross domestic product), such a reversal is likely to undermine Government’s efforts to reduce the wage bill over the medium term in line with its own Fiscal Adjustment Roadmap (FAR). We believe that a significant reduction in the wage bill is essential to exit from the current fiscal crisis in Swaziland. We remain flexible about how Government intends to implement such a reduction," he said.

The Finance Committee in Parliament recently had a report nullifying the pay cuts adopted after the parliamentarians had raised concerns that they had not been implemented on the whole civil service.





Praise God!!!!...Now the country can forget about the misery that would have come with being a victim of the "economic hitmen" IMF, World Bank and African Development Bank. The African Development Bank is a disgrace to the African continent as a whole since it uses and implements Western policies that would only benefit developed countries. Government should engage in consultations with countries like India, China, Brazil, Pakistan, Iran and others who will not provide aid with ridiculous conditions like the Western countries. Phambili ngelive lemaSwati phambili!
Apr 12, 2012, 5:05 AM, Lobusika Dlamini


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