ESWATINI ‘BEGS’ WORLD BANK FOR EMERGENCY LOAN RELIEF

MBABANE – Money matters! The Kingdom of Eswatini is pushing hard to get assistance in terms of debt service relief loan from the International Monetary Fund (IMF) and the World Bank.

At the moment, the Eswatini government has approached IMF for a E647 million emergency loan to help fight the threatening COVID-19 crisis. The kingdom is on a 21-day partial lockdown which, according to government projections, will last until next month.
Pressure is mounting and government is looking in every corner for financial assistance.

Though the country has not been listed among the 25 African countries to receive or benefit from relief loans related to COVID-19, Minister of Economic Planning and Development Dr Thambo Gina has urged the board of governors at the World Bank that debt relief for all African countries must be undertaken in a coordinated and collaborative way.

He said when it came to service relief loans; the World Bank and IMF should consider awarding equal opportunities to low-income countries (LICs) and middle-income countries (MICs). Eswatini, according to World Bank, is being regarded as MIC the hence the country is being sidelined from emergency loans.
The minister made this request on Friday when addressing at least 25 board of governors from the World bank during a video conference call since they couldn’t go to Washington physically to attend the meeting due to travel bans. He said his submission to the board also covered the Kingdom of Eswatini.

Gina, who will be turning 70 years next month, currently serves as a governor at World Bank and Chairman of the African group which consists of 22 countries. His duty here, among other things, is to discuss the fiscal challenges faced by countries and how they can be assisted and benefit from the World Bank.

His Friday submission at the Development Committee Plenary Session, which was chaired by the President of Ghana, comes at a time when Eswatini has been excluded from the list of the 25 that will benefit from immediate loans from IMF.

The exclusion of Eswatini was communicated through a press statement issued by Managing Director of the IMF Kristalina Georgieva. According to an article published on Wednesday by our sister publication, the Times of Eswatini Daily news, Georgieva said grants would be provided to the poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and would help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts.
The MD stated that the grant provided about US$ 500 million (about E9.3 billion).
E697m loan request rejected

Reacting to the exclusion of the kingdom from the relief loans, Minister of Finance Neal Rijkenberg said after the outbreak of COVID -19, the country approached the IMF for a loan amounting to E674 913 000 (about US$36.7 million) to be used in the fight against the pandemic. 
When addressing the governors, Gina said the sudden stop in economic activity would put further pressure on the developing countries’ underlying macroeconomic vulnerabilities. 

He said in the absence of bold and possibly unorthodox measures from both governments and, more importantly, the international community, the ensuing economic impact would compel governments to implement austerity measures, leading to additional cuts in social spending and implementation of development programmes.

“The novel COVID-19 pandemic continues to plunge the world into a socio-economic turmoil of unprecedented magnitude. Additional to its devastating human and health crisis, the pandemic has brought a sizeable part of the world economy to a stand-still. African countries will be hit the hardest due to their frail private sector characterised by the large informal sector, weak fiscal balances and limited coverage of social safety nets,” the minister said, before commending the world Bank for launching the Fast Track COVID-19 Facility to provide a fast and flexible response to support developing countries in dealing with the spread of the pandemic.

“Further, we encourage the WGB to increase support to the most affected and least resourced countries,” he said.
The legislator continued; “We support the call by the Heads of the two Bretton Woods Institutions to the G20 bilateral creditors to suspend debt repayments for countries affected by the COVID-19 pandemic when they request forbearance.”

want 2-yr debt break

He further requested the BWIs to extend debt service relief to low-income African Countries for two years. “Similarly, we support the call by the African Finance Ministers in Addis Ababa for development partners to consider debt relief and forbearance of interest payments for all African countries, LICs and MICs alike, given that the global economy has entered a period of a synchronised slow down,” he said.

The minister further urged the WBG and IMF to provide post-epidemic financial support and interventions to stabilise, improve and enhance the recovery efforts and resilience of our countries to deal with the pandemic and similar outbreaks that could have a significant impact on economies. “In this respect, we suggest that a full assessment of the impact on economies, livelihoods and social environment be carried out to inform the design of a post-pandemic economic stimulus package for the affected countries,” he said.

Government recently sought a supplementary budget of E100 million to fight the spread of the coronavirus. The much needed budget would help purchase the personal protective equipment (PPE) which is on demand.

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