Govt refutes Swazi bailout date claims

2012-08-28 09:00

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Johannesburg - The National Treasury denied reports on Monday that South Africa would release the first tranche of a R2.5bn bailout to Swaziland in September.

The media had falsely interpreted a response by Finance Minister Pravin Gordhan to a parliamentary question as saying the payment would definitely be made next month, the Treasury said in a statement.

"This is not true. Negotiations by financial authorities of the two countries are still underway," it said.

"The September 2012 reference in the minister's reply... was in terms of an intended payment schedule, which... was subject to the conclusion of negotiations by financial authorities of the two countries."

According to Reuters, the first tranche of three equal payments of R800m would be subject to Swaziland meeting certain fiscal and technical conditions.

The loan was negotiated last year when the Swaziland government faced a funding crisis after losing 60% of its revenue from a regional customs union.

The revenue usually accounted for two-thirds of the country's income.

The announcement of the bailout was criticised by South African organisations and unions because of King Mswati III's lavish lifestyle and his crackdown on organisations seeking democratic reform.

Political parties were banned from the country by King Ngwenyama Sobhuza II in 1973.