Home | Feature | ARE YOU LISTENING?

ARE YOU LISTENING?

31/08/2018 04:02:00 By Martin Dlamini

Font size:

IF you thought things were bad financially in this country, you may as well brace yourself because it is about to get worse.

This is the warning from the Central Bank of Eswatini (CBE) this week as the country’s books of accounts now threaten the pegging of our currency to the South African Rand unless drastic fiscal reforms are instituted. The bank has clearly spelt out what needs to be done and where, if we are serious about averting a crisis.

All financial doctors seem to prescribe the same medicine for our ailing economy but for some reason government refuses to ingest it. “Public salaries and employment policies need to be revisited. Capital spending has to be more selective, and where possible, State Owned Enterprises (SOE) need to be more financially independent,” CBE General Manager Policy, Research and Statistics Sikhumbuzo Dlamini told a gathering of financial gurus on Wednesday.

The GM said, more recently, there had been difficulties in fully paying public salaries as mentioned by Minister of Finance Martin Dlamini in Parliament. The bank has stressed the need for the 2018 fiscal deficit to be brought back within financing means and avoid new arrears.

The CBE GM said priorities include; better value for money in education and health, aligning wage dynamics to productivity such as controlling public wage rises, increasing market flexibility in wage determination, simplifying business regulations and improving the institutional environment. Sounds familiar? Of course it does! The question is: Are our aspiring MPs listening and do they know what he is talking about?

If they have the interest of the country at heart, coupled with the intention to actually do something about it, then they will make every effort to visit the CBE GM to break it down for them. Failure to do so would be removing the assurance of receiving the salaries that they drool over. Nothing to do with money is guaranteed anymore. Ask the unpaid suppliers.

Having to go for months without salaries is not far-fetched either. It is well documented in the history of other nations that are situated not too far away from Eswatini. In fact, the committee tasked with reviewing the salaries of politicians needs to be very busy these days with downscaling the perks and basic salaries of the incoming group.

This is a good opportunity to fix all that went wrong with these salaries before anybody reports for duty after the Secondary Elections. If there was any circular that would be most welcome at this point, it would be one that slashes these salaries by no less than 40 per cent. It is also one that would cut down on parastatals, merge ministries and suspend travel for civil servants until the debt to suppliers has been paid up in order to save the jobs that these businesses carry.

If the incoming MPs are promising to fix the economy, they ought to commit themselves to the recommendations that are critical to help reboot the economy of Eswatini. One should congratulate those who made it through the Primary Elections. You are the people’s choice and nobody can change that.

We can only hope that the people made the right decision and you can demonstrate this through your effective contribution to Eswatini’s economic recovery.
The Central Bank GM further warned that bank credit is declining, bad credits with banks are rising, with international reserves lowering and their coverage of base money, which is critical for the pegging of the Lilangeni, has halved since 2014. Is anybody listening? Some years ago we made fun of some countries nearby over the worthless value of their currencies. We laughed at them needing a bucket full of notes just to buy bread. Now we are teetering on the edge of a worthless currency at the rate we are going, unless we face reality and change - drastically.
If banks are not lending money the way they should be and businesses cannot service their loans because their customers are cash-strapped or can barely make ends meet, then we are in serious trouble. Dlamini said without policy changes, government’s financing problems were damaging the economy and growth prospects. “A shift in policies is needed to bring the country back to sustained growth and avoid another crisis,” Dlamini advised. Good advice, but once again we ask; is anybody listening?