IMF sizes up Swazi finances

Johannesburg - An International Monetary Fund delegation began a two-week visit to cash-strapped Swaziland on Monday to see if the country is doing enough to win the fund's blessing to secure foreign loans.

"The IMF team has so far met the minister of finance, the governor of the reserve bank and is due to meet trade unions and cabinet later in the week," the delegation's head, Joannes Mongardini, told AFP.

Swaziland has already failed several times to satisfy IMF demands for greater austerity. The IMF team left Swaziland in May complaining of missed budgetary reform targets and government overspending on defence and capital projects.

The small southern African country needs the IMF's blessing to borrow much-needed cash from the World Bank and the African Development Bank.

A major stumbling block is the IMF's insistance Swaziland cut spending on wages for civil servants, which account for more than half of government spending.

Unions say the government has hardened its stance over the controversial issue of salary cuts in the lead-up to the IMF's visit.

"This loan is a curse for the workers. We are back to square one. The government is trying to please the IMF," Vincent Dlamini, secretary general of civil servants' union NAPSAWU, told AFP.

The government says it wants to cut civil servants' salaries by 4.5%.

The government's move to slash salaries sparked large protests in April that were forcefully put down by King Mswati III's regime.

The government is reeling after a 60% drop last year in revenues from a regional customs union, its main source of income.

The financial crisis has resulted in fuel rationing that has grounded all but emergency government vehicles and forced the university of Swaziland to close for two weeks due to a funding shortfall.

The government has also suspended all non-essential official trips outside the country. Those officials who do fly will be downgraded from first to economy class.

During their two-week visit the IMF is expected to discuss the possibility of taxing a lucrative investment firm owned by the royal family as a way to replenish state coffers.