South Africa announced in August that it would be loaning its neighbour Swaziland about $355 million to help the country’s economy get new life, but the loan has not yet been received by Swaziland.
There are concerns about Swaziland’s ability to repay the loan, the country is also failing to meet one of the conditions (political reform) set by South Africa. Traditionalists in support of King Mswati III say, although they need the loan from South Africa, their country is not for sale.
Swaziland does not really have a second option as the International Monetary Fund says it will not be releasing anymore loans to the government, until it meets its conditions including cutting government spending and decreasing the size of the civil service.
The government is already trying to cut the civil workforce, but is offering employees IOU packages instead of paying the packages in cash.
The South African government says Swaziland has not signed the memorandum of Understanding, which will only be signned once Swaziland agrees on the conditions.
The loan will not be released until the MOU is signed.