Murky bailout creates unease in Swazi

After warning last week that it would not be able to pay public-sector
workers on time this month, the Swazi government announced Tuesday
that it had pulled together enough loans to cover its payroll.

But the news has created anxiety about where the money came from and
what strings are attached.

The South Africa-based Swaziland Solidarity Network, citing “highly
placed sources”, claimed that the bulk of the 1.4-billion-emalangeni
($170-million, 126-million-euro) loan came from a company with close
ties to King Mswati III, Africa’s last absolute monarch.

It said the government had offered its shares in several banks and
companies as collateral and warned that the company, African Alliance,
could gain control over the banking system.

“At the stroke of a pen the people of Swaziland are facing a real risk
of losing whatever little family silver that the country still has. It
would not be surprising if African Alliance emerges out of this
illicit deal as the future super bank of Swaziland,” the solidarity
network said in a statement.

It added that the king himself was funding the bailout and channelling
the money through African Alliance in a bid to increase his control
over the country’s assets.

But the investment firm denied lending the country money.

“I would like to know where we would find a billion rand to give to
the government of Swaziland,” Tony da Costa, the company’s chief
executive, said on Friday.

“It is not correct that we are acting on behalf of his majesty. Nor
have we ever.”

A second investment firm allegedly involved in the bailout, South
Africa-based Interneuron, confirmed it had made a proposal to the
Swazi government but said no deal had been clinched.

The government refused to disclose details of the bailout.

“Rolling out the specifics of the deal is not part of deal. It is up
to them, if they want to reveal the terms,” government spokesman Percy
Simelane told AFP.

Exiled Swazi businessman Mandla Hlatswayo said that “nobody knows what
conditions are involved, nor is it through a public process, allowing
scrutiny. It is not based on market value. There has been no
comparative bidding.”

The fiscal crisis – sparked by a 60-percent drop in revenues from a
regional customs union last year – has fueled criticism of Mswati, who
is known for his lavish lifestyle, 13 wives and fortune estimated at
$100 million.

Opponents of the regime have called for democratic reforms and the
un-banning of political parties, which were outlawed in 1973. –