South Africa Offers Bailout to Swaziland

Posted August 3rd, 2011 at 8:10 am (UTC-5)
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South Africa has agreed to bail out its cash-strapped neighbor Swaziland.

South Africa's central bank said Wednesday that the loan is worth nearly $370 million, but did not provide further details on the package.

Activists in Swaziland and labor unions in South Africa have said any economic bailout should be tied to political reforms by Swazi leader King Mswati.

The king is Africa's last absolute monarch. His tiny country is facing a steep budget shortfall and a wave of protests since April calling for greater democracy.

Officials in Swaziland say the loan has not yet been finalized.

Swaziland was hit hard by the global recession, which triggered a sharp drop in revenue from a regional customs union.

In June, Swaziland's finance minister, Majozi Sithole, said salaries for civil servants could be delayed or cut in half in coming months if the country is unable to obtain loans.

Sithole said a loan application to the African Development Bank was unsuccessful although he said the government was working to meet budget cuts demanded by the International Monetary Fund.