Wednesday, August 3, 2011

SA loans billions to Mswati's kingdom

03 Aug 2011

2.5 billion rand to be exact

South Africa has agreed to a 2.5 billion rand ($368-million, 259-million-euro) loan to neighbouring Swaziland, which is suffering a crippling financial crisis, the Reserve Bank said Wednesday.

Spokesman Hlengani Mathebula confirmed the deal but declined to give details on the loan.

“The South African Reserve Bank is just a facilitating mechanism,” he said.

The loan amounts to just one-quarter of the request reportedly made by Swazi King Mswati III.

South Africa’s powerful labour unions, key allies of the ruling African National Congress, have joined Swazi activists in pressing for Pretoria to demand democratic reforms in exchange for the loan.

Mswati is Africa’s last absolute monarch and the financial crisis has sparked a series of demonstrations since April demanding reforms.

“We are thankful” to South Africa, Mswati said at a palace briefing late Tuesday.

“This shows that they are good neighbours.

“We hope that the financial assistance we have received will assist in alleviating the country from the fiscal problems,” he added, according to the independent daily Times of Swaziland.

The king sought to deflect accusations of financial mismanagement, saying Swaziland is “not the only country faced with fiscal crisis, but the world over”.

“But it must be stressed that this is not a gift but a loan, which naturally should be repaid.

“This is why every Swazi must play his or her role by working hard wherever he is to ensure that the country gets back to its feet the soonest,” he said, according to the royal-owned Observer newspaper.

  • Swaziland has been battling to stay solvent after losing 60 percent of its revenues from a regional customs union, the government’s main source of income, last year.

The government froze public-sector salaries and asked unions to accept pay cuts, leading to mass protests that were violently put down by security forces.

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