FSEJ/AFRODAD CO HOST Swaziland Loan Contraction Process and Debt Management wORKSHOP

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24TH July 2014
Stakeholders Present.
FSEJ Partner Organizations-SEJUN;SRWA;IRALE;SNUS;SWACBTA AND SUDF
OSISA
CANGO
Auditor General’Office
Central Bank
Members of Parliament.

The African Forum and Network on Debt and Development (AFRODAD) and the Foundation for Socio Economic Justice (FSEJ) co-hosted a workshop for stakeholders to validate findings of research conducted by the former on loan contraction and debt management in Swaziland.

In Presentation AFRODAD argued ; The causes of Africa’s debt crisis are varied and complex. A lot of emphasis has been put on external factors while overlooking internal ones. Notwithstanding the external factors, it is clear that the causes of the debt crisis in many African countries are also attributable to poor debt policy, a weak institutional and legal framework, and lack of accountability, transparency, and inclusiveness of the institutions involved in the loan contraction process.

The study found that the economy of Swaziland’s loan contraction and debt management process has greatly deteriorated owing to the fluctuations in Southern African Customs Union (SACU) currency exchange rates, the external shocks of the global recession on the economy, an excessive civil service salary-wage bill and poor loan contraction and debt management policies. For instance a sound Public Finance Management (PFM) system such as an appropriate and robust legal and institutional framework is largely not in place thereby leading to the vast accumulation of both domestic and external debt.
Although Swaziland’s debt levels have remained relatively sustainable, Swaziland’s loan contraction and debt management process leave a lot to be desired as they largely do not conform to the legal and institutional regulatory frameworks for public borrowing and debt management. This increases Swaziland’s risks of falling back into the debt crisis if the current prevailing situation continues to reign unabated.

This study seeks to create awareness for all stake holders in the development of Swaziland and to warn that if debts are accumulated but not for the purpose of profit generating projects that will enhance the livelihoods of Swazis then the poverty margin will go above the 60% mark.