Sunday, December 26, 2010

Swaziland: Declining Customs Union Revenues Threaten Aids Response

Mbabane — An economic meltdown in Swaziland, exacerbated by a major decline in revenue from the Southern African Customs Union (SACU), is unlikely to leave the national AIDS response unscathed, say local health officials.
"There will be an impact on the health sector, but to what extent we cannot say," said government economist Deepak Sardiwal of the Ministry of Economic Planning and Development.

Revenue from SACU - the world's oldest customs union, comprising Botswana, Lesotho, Namibia, Swaziland and South Africa - contributed 76 percent of the Swazi government's income in 2009 but dropped in 2010 and is expected to continue declining over the next decade.
The global recession has been blamed, but according to Khaled Ahmed of the Health Economics and HIV/AIDS Research Division at the University of KwaZulu-Natal in South Africa, the decline in SACU tariffs and revenue collection is part of a policy shift towards freer trade within the region that is likely to continue.
Rather than put aside some of the additional revenue generated by SACU while it was plentiful, the Swazi government went on a spending spree and ignored warnings from the International Monetary Fund (IMF) that its public sector bureaucracy was bloated far beyond the needs of a small country of one million people.
"Today we sit with no savings or new receipts. We've dug ourselves into a pretty deep hole, according to the IMF. It's serious, very serious," Derek von Wissell, director of the National Emergency Response Council on HIV/AIDS (NERCHA), told IRIN/PlusNews.