Record national debt as govt spends on prestige projects

Government overspending has burdened Swaziland with a record national debt that is now cause for concern both domestically and among the country's development partners. "The growing deficit is straining available financial resources, and has been financed in part by a draw down in the government's foreign exchange reserves," said finance minister Majozi Sithole in a statement. The national debt has hit a record 1 billion lilangeni (US $145 million). The deficit represents 6 percent of the country's GDP, about double the size considered healthy for a small economy like Swaziland, the International Monetary Fund (IMF) said in a report released last month. The deficit also equals the amount of loans and grants acquired by Swaziland from foreign donors and lending institutions this past year, according to a report compiled by former prime minister Sibusiso Dlamini, but released last week. Swaziland had negligible deficits before 1999/2000, when King Mswati embarked on a series of high-value "Millennium Projects". Currently in various phases of planning or construction, the projects include a 1.7 billion lilangeni airport in the eastern lowveld, and an international trade fair and amusement park outside Manzini, 35 km east of the capital Mbabane. The IMF has criticised the projects as unaffordable in the light of declining tax revenues and foreign investment, and mounting humanitarian needs brought on by AIDS, food shortages and persistent poverty that ensnares about two-thirds of the population. "The country faces urgent humanitarian needs that are unmet," said the IMF report. The government has not released business plans to prove the Millennium Projects' profitability. Environmental impact assessments have reportedly been neglected as pressure is brought by project sponsors in government on local authorities to have construction permits granted. Construction has begun on the airport, though no airline has committed itself to using the facility, and the nation's chief carrier, SAA Airlink, told government it wished to remain at the current Matsapha Airport outside Manzini. "Of particular concern [about government's role in the economy] in recent years have been weaknesses in fiscal transparency and accountability, the slow pace of legislative change, and lapses in the rule of law," said the IMF report. At the weekend, Ephraim Hlope, principal secretary in the Ministry of Economic Planning and Development, which is overseeing the Millennium Projects, blasted the IMF report. "Some of their concerns are ill-timed, and were not properly understood. The projects are fully backed by the private sector," Hlope said in a statement. "All the projects that they complained about are for the benefit of the country, and are very vital. These projects are the foundations on which the country's economy has to be based. It is vital that we develop our infrastructure when we want to really compete effectively in the international community," Hlope said. Among the projects are twin sports stadia and a "water ride amusement park" currently under construction in Manzini. "Of course, there is government money involved in these projects," said an economist with one of the South African banks doing business in Swaziland. He noted there was growing unease over the government's apparent lack of concern about reigning in spending as the IMF has urged