DID YOU KNOW THAT SWAZILAND DEPEND ON THE CUSTOMS AREA AGREEMENT (SACU) FOR UP TO 75% OF ITS BUDGET. READ THE REPORT BELOW TO GET A PICTURE OF THE MASSIVE CONTRIBUTION TO STATE FUNDS IN SWAZILAND BY SOUTH AFRICA. SO APART FROM SWAZILAND BEING A DONOR NATION FROM THE LIKES OF USA AND EU AND ASIA WE ARE ALSO A DONOR NATION OF SOUTH AFRICA. Mzukisi Qobo, head of the Emerging Powers Programme and Global Challenges at the South African Institute of International Affairs (SAIIA), a think-tank, noted in a recent SAIIA presentation at the University of the Witwatersrand in Johannesburg that according to rough estimates, Swaziland relied on customs revenue for 75 percent of its budget. Most of the customs revenue is produced by South Africa, the continents largest economy, and about 90 percent of the SACU regions GDP is generated by South Africa. Qobo commented that 1.15 percent of South Africas GDP, about R27 billion (US$3.7 billion), was directed to Botswana, Lesotho, Namibia and Swaziland, and described the SACU distributions as development aid in disguise. This interpretation would make South Africa the largest foreign donor in the world - on the basis of percentage of GDP - surpassing the United States, Britain and Japan, whose overseas development aid constitute less than one percent of GDP. The International Monetary Fund (IMF) has consistently warned Swaziland about its reliance on SACU money, and recommended reductions in public sector spending and diversification of revenue sources, which at least one Swazi government official has dismissed as meddlesome and irrelevant because, unlike the World Bank, the IMF has no mechanism to assist Swaziland financially. Qobo SAYS that such a heavy dependence on South Africa by Lesotho and Swaziland undermined their claim to sovereignty, and issues of incorporation should be considered. Lesotho and Swaziland have small impoverished populations, large numbers of HIV-infected people, and few or no natural resources - although the Lesotho Highlands Water Scheme supplies Gauteng Province, South Africas industrial hub, with more than 50 percent of its water needs. One in four Swazis between the ages of 15 and 49 are living with HIV - at 26.1 percent the worlds highest prevalence - in a population of about 1 million. Lesotho, with about 2.1 million people and unemployment of around 40 percent, has the worlds third highest HIV prevalence - 23.2 percent of people aged between 15 and 49 are infected. Charles Ndwandwe, an economist at a financial institution in Mbabane told IRIN. Swazilands government is dependant on outsiders for its budget. At least two-thirds of the people live in chronic poverty and do not pay taxes, so if this outside aid disappears, government services stop. Swazilands Prime Minister, Sibusiso Dlamini, acknowledged that unemployment had reached 40 percent. The Central Bank of Swaziland has reported that economic growth is below population growth for a third decade, with the result that resources to alleviate poverty are diminishing rather than increasing. Swaziland is ruled by southern Africas last absolute monarch, King Mswati III, and his luxurious lifestyle is often seen as incongruous against the poverty of most of his subjects. Mzukisi Qobo SAID ( head of the Emerging Powers Programme and Global Challenges at the South African Institute of International Affairs (SAIIA) ) Another concern was having no accountability over how these [SACU] resources are utilized in Swaziland.Swaziland is ruled by southern Africas last absolute monarch, King Mswati III, and his luxurious lifestyle is often seen as incongruous against the poverty of most of his subjects. From a benefit-creation point of view, it IS extremely hard to justify why South Africa continues to expend massive financial resources on building an ailing customs union arrangement, while social stability at home [in South Africa] is on the verge of implosion. The more pressing question for South Africa is how to reconcile these massive transfers with deep-seated socio-economic challenges within the country, (Qobo) QOBO WANDERED IF THE LARGE NUMBER OF POOR IN SOUTH AFRCA KNEW THAT a significant portion of the fiscus - which could have gone towards building houses, better schools and road infrastructure - migrates to pay for public servants, prop up the royal household in Swaziland, and maintain the lifestyle of elites in the countries LIKE SWAZILAND? Any CHAMGES with SACU would have ramifications across the southern African regional. Peter Draper, head of the trade programme at ( South African Institute of International Affairs)(SAIIA) .....there is consensus in official structures that the country cannot afford to indefinitely carry the fiscal burden imposed on it by the revenue-sharing formula. ....abrupt withdrawal by South Africa from SACU would effectively create two failed states in Swaziland and Lesotho, with all the associated economic, social and political fallout, in a region already grappling with Zimbabwes astonishing 10-year economic decline......And if South Africa pulled the plug on revenue transfers, the administrations in .... Swaziland would collapse overnight. That would propel thousands of poor people to join Zimbabwean, Mozambican, and other African citizens to cross South Africas borders in search of economic opportunities, Draper and Khumalo pointed out. SEE ALSO ARTICLE saiia.org.za/opinion-analysis/scoping-the-future-of-sacu-a-hundred-years-on
Posted on: Mon, 05 Jan 2015 12:57:12 +0000
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