HIV, public health and economic crisis in eSwatini
Despite being a small country, eSwatini has the world’s highest HIV prevalence rate in the world. This has meant the virus has become the main public health concern especially given that 27.2% of all adults live with HIV.
Meanwhile, new HIV diagnosis stand at 9.37 (per 1,000), and as much as 3 900 AIDS-related deaths. Increased morbidity and mortality characterize the AIDS epidemic in eSwatini. Meanwhile, life expectancy has dropped from 56 years in 1995 to 49 years in 2013. Luckily, the availability of Antiretroviral Treatment (ART) has helped slow down the previously fatal HIV infection into a manageable chronic illness.
HIV has compounded an already struggling health sector known to suffer from under staffing to lack of medication. According to the New Frame, an online Magazine, there are at least five heavily understaffed government hospitals in the country and at least six health centres countrywide. Shortage of medicine has thus become common occurence.
For example, the frequently used antibiotic medications haven’t been available for months while other medications like broad-spectrum antibiotic called fortified penicillin, plaster of Paris used to mould plaster casts to immobilise broken bones, and catheters for draining urine from the bladder have been in short supply for a while now (New Frame, 2019). As Alan Whiteside rightly observes, the structure of the economy and the type of employment available has implications for the spread of HIV in the country and the strain the health sector faces. For a population of slightly above one Million, the country has only 12 ambulances servicing the entire nation.
The Director of the Emergency Preparedness Response Department under the Ministry of Health, Masitsela Mhlanga, told the country’s only independent newspaper, the Times of eSwatini, that 20 ambulances were parked at the Central Transport Administration (CTA) awaiting repairs. The challenges of the health sector, even though magnified by the scourge of HIV, cannot be divorced by the challenges faced by the Swazi economy as a whole. The slow economic growth, coupled with a severe economic crisis that hit the country in 2011, has meant that service delivery has been affected all round.
For example, the government has failed to provide free primary education as demanded by the national constitution. They have instead called for the right to primary education to be interpreted to infer the progressive realization and availability of resources, as with the implementation of socio-economic rights in general. Economic growth has also wavered in the past few years, exacerbated by the economy’s inability to create new jobs at the same rate that new job seekers enter the market. The 2020 IMF report notes that the country’s socio-economic developmental challenges have remained deeply entrenched with about 40 percent of the population living in extreme poverty; unemployment elevated, particularly among the youth; and, the HIV prevalence rate still one of the highest in the world.
Economically, and particularly in the area of trade, the country is heavily dependent on South Africa. Together with countries like Namibia, Botswana and Lesotho, eSwatini operates under the Southern African Customs Union (SACU) Free Trade Area (FTA) agreements. Facilitating the ease of trade transaction amongst the countries is the shared borders with South Africa which makes flexibility in the free movement of capital and labour easy. The fragile nature of the economy has meant that the country has been forced to borrow from various lending institutions. The country is engaged in a vicious continuous cycle of loan-seeking. Already, the country needs over E1 billion (US$71.6 million) to complete the International Convention Centre (ICC) and the Five Star Hotel (FISH), both capital projects built as the country’s ambitious plan to reach first world status by 2022 (Khumalo, 2019).
This is not the only loan; the country needs over US$15 million for the second phase of the Lower Usuthu Smallholder Irrigation Project (LUSIP), both capital projects with nothing towards the collapsing health sector. This cycle is pushing the country into reaching the 35 per cent of gross domestic product (GDP) mark—which is the cut off line for a country before it dives into fiscal distress. As at the end of May 2019, the public debt stock stood at E17.3 billion (US$1.2 billion), which is an equivalent of 28 per cent of the GDP.
In 2011, the eSwatini government turned to South Africa for a financial bailout of over $355 Million. This was after the IMF refused to assist unless the government took a carving knife to what is Africa’s most bloated civil service. At the time, the country was near financial collapse, with a budget deficit of 14.3% percent of GDP — similar to Greece — and an economy stuck in the doldrums. eSwatini wage bill amounts to 18% of GDP, more than any other country in Africa.
The country’s growing public debts, and repayment thereof, has hamstrung the government’s ability to respond effectively to the right to health as demanded by the United Nations (UN) Sustainable Development Goal number three. The World Health Organization defines the right to health as “a complete state of physical, mental and social well-being, and not merely the absence of disease or infirmity”. In its General Comment 14, the UN Committee on Economic, Social, and Cultural Rights (CESCR) provided detailed guidance to States regarding their obligations to respect, protect and fulfil the right to health. It enjoins states to ensure both freedoms and entitlements.
eSwatini and debt
Historically the Swazi Government's debt has been characterised by a low domestic debt to external debt ratio, at around 19 to 81 percent, respectively. This trend persisted from the early 1990s to the mid-2000s. In 2005 government started issuing Treasury bills in a bid to develop the domestic market. As expenditure continued to increase and SACU revenue began falling, the Treasury bills programme became a financing item for government. At the peak of the financial crisis in 2009 and 2010, domestic debt declined due to loss of confidence by the market.
For a long time the government of eSwatini was running its economy on surplus. However, at the turn of the century there was a notable increase in the country’s debt stock, although the country’s debt portfolio was still within the standard critical ratios established by the Bretton Woods institutions. From year 1999 there has been a continuous increase in the total public debt stock of GOS. This has been largely attributable to exorbitant current expenditure figures, which takes more than half of the overall national budget. Total public debt stock increased by 18.4 percent to E6,200 million at the end of March 2013 (Ntshakala, 2015).
The increase has also been attributed to unfavourable market conditions such as the deterioration in the terms of trade, and increases in oil prices that have tended not to favour developing countries, as well as the sharp depreciation of the Rand/Lilangeni against major currencies in 2001. Such increases of debt stock levels have resulted in drawn downs on GOS reserves and decline in economic growth. The country has dug deep into lending of all shapes and sizes.
Even international loans, however, have not helped the country move closer to achieving their sustainable goals especially with regards to health. This is mostly because the projects financed by loans are mainly related to agricultural, road construction, and urban development projects. Education and health has therefore become casualties of these poor policy choices.
From as far back as 2011 the country has been facing a huge budget deficit which has has left government operations paralyzed and service delivery even more compromised for a country dealing with a multiple crisis caused by HIV. In an attempt to address the situation, the Swaziland government has partnered with the IMF to produce fiscal adjustment strategies to stabilize the country's economy through short-term policies.
As Simelane (2014) argues, a more meaningful and long-term effective solution to the problems caused by debt and sluggish growth of the eSwatini economy means interrogating the country's governance structure, especially the extent to which it has contributed to the poor performance of the country's economy, how it has contributed to fiscal indiscipline, and how it has nurtured wasteful spending and contributed to increasing levels of corruption.
Conclusion
In principle, borrowing is not wrong per se. If anything, it can be justified if it is contracted to finance capital development projects that will address socio economic needs of the nation. The contribution by Professor Makin, who points out that that the final resolution of the debt problem means addressing, rather than evading, such crucial issues as how to justify new loans when countries find it hard to pay even the interest on existing debt.
In the case of eSwatini, public and external debt have been found to be unsustainable under current policies, calling for policies aimed at restoring fiscal sustainability and improving competitiveness of the economy. Unlike other countries, the eSwatini economy does not look to be doing well yet the country still has to deal with the scourge of HIV which has stretched the health system to its limits.
Coupled with reckless expenditure, corruption and declining SACU revenue, the public purse has continued to struggle to satisfy the socio-economic demands of the nation. At the apex of these socio-economic demands is the right to health, especially for a country dealing with the scourge of HIV. However, the country continues to seek loans for capital projects much the neglect of health. The advent of novel viruses like COVID-19 will devastate an economically fragile country like eSwatini. If the virus finds a country battling with TB and HIV, the health system will be unable to cope.