Murky bailout creates unease in Swaziland

2011-11-19 07:38

The Swazi government was tight-lipped yesterday over details of a bailout package that has enabled the tiny kingdom to stay afloat, amid dissident claims that public bank shares were used as collateral.

After warning last week that it would not be able to pay public-sector workers on time this month, the Swazi government announced Tuesday that it had pulled together enough loans to cover its payroll.

But the news has created anxiety about where the money came from and what strings are attached.

The South Africa-based Swaziland Solidarity Network, citing “highly placed sources“, claimed that the bulk of the 1.4 billion emalangeni (about R1.35 billion) loan came from a company with close ties to King Mswati III, Africa’s last absolute monarch.

It said the government had offered its shares in several banks and companies as collateral and warned that the company, African Alliance, could gain control over the banking system.

“At the stroke of a pen the people of Swaziland are facing a real risk of losing whatever little family silver that the country still has. It would not be surprising if African Alliance emerges out of this illicit deal as the future super bank of Swaziland,” the solidarity network said in a statement.

It added that the king himself was funding the bailout and channelling the money through African Alliance in a bid to increase his control over the country’s assets.

But the investment firm denied lending the country money.

“I would like to know where we would find a billion rand to give to the government of Swaziland,” Tony da Costa, the company’s chief executive, said yesterday.

“It is not correct that we are acting on behalf of his majesty. Nor have we ever.”

A second investment firm allegedly involved in the bailout, South Africa-based Interneuron, confirmed it had made a proposal to the Swazi government but said no deal had been clinched.

The government refused to disclose details of the bailout.

“Rolling out the specifics of the deal is not part of deal. It is up to them, if they want to reveal the terms,” government spokesperson Percy Simelane told AFP.

Exiled Swazi businessman Mandla Hlatswayo said that “nobody knows what conditions are involved, nor is it through a public process, allowing scrutiny. It is not based on market value. There has been no comparative bidding.”

The fiscal crisis – sparked by a 60% drop in revenues from a regional customs union last year – has fuelled criticism of Mswati, who is known for his lavish lifestyle, 13 wives and fortune estimated at $100 million (about R80 million).

Opponents of the regime have called for democratic reforms and the un-banning of political parties, which were outlawed in 1973.

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