MBABANE (AFP) ? South Africa has agreed to a $368-million loan to neighbouring Swaziland, an official said Wednesday, just one quarter of the amount sought by King Mswati III to avoid his government's financial collapse.
The South African Reserve Bank confirmed the 2.5 billion rand ($368 million, 259 million euro) deal but declined to reveal its terms.
"The South African Reserve Bank is just a facilitating mechanism," spokesman Hlengani Mathebula told AFP.
South African Finance Minister Pravin Gordhan was expected to speak later in the day about the loan which Swazi activists and South Africa's powerful labour unions have argued should be used to pressure Mswati into making democratic reforms.
Mswati is Africa's last absolute monarch, living a jet-set life with 13 wives -- each with separate palaces -- and a fortune estimated at $100 million, placing him on Forbes magazine's list of the 15 richest monarchs in the world.
In contrast, 70 percent of his 1.2 million subjects live on less than one dollar day and 25 percent of adults have HIV, the highest rate in the world.
The loan comes just in time for Mswati who had faced the prospect of schools shutting down from Friday and dwindling stocks of anti-retroviral drugs for AIDS patients.
"We are thankful" to South Africa, Mswati said at a palace briefing late Tuesday, according to the independent Times of Swaziland.
"This shows that they are good neighbours. We hope that the financial assistance we have received will assist in alleviating the country from the fiscal problems," he added.
The king sought to deflect accusations of financial mismanagement, saying Swaziland is "not the only country faced with fiscal crisis, but the world over."
"But it must be stressed that this is not a gift but a loan, which naturally should be repaid. This is why every Swazi must play his or her role by working hard wherever he is to ensure that the country gets back to its feet the soonest," he said, according to the royal-owned Observer newspaper.
The kingdom has been unable to secure international loans after failing to meet the International Monetary Fund's demands to reduce its budget deficit and cut its bloated government wage bill.
Mswati did not say whether South Africa had attached strings to the loan, granted after a series of private meetings with President Jacob Zuma.
Swaziland has been battling to stay solvent after losing 60 percent of its revenues from a regional customs union, the government's main source of income, last year.
The government froze public-sector salaries and asked unions to accept pay cuts, leading to mass protests that were violently put down by security forces.
The standoff has heightened calls for reform in the tiny landlocked kingdom, where political parties have been banned since 1973.
Muzi Mhlanga, secretary general of the Swaziland National Association of Teachers -- who have led a series of demonstrations against government plans to cut their salaries -- said the loan was "a relief."
"Now we have the money, the issue of cutting salaries will be suspended, we hope. We need to look at reviving the economy and we still need to apply pressure for change," he told AFP.
"In five or six months, this money will be gone and we will find ourselves in the same dilemma."
Musa Hlope, head of the Coalition of Concerned Civic Organisations, said he feared that without requirements for reform, the loan would simply prop up Mswati.
"This is the old boys club once again, government in favour of one of their own," he told AFP.
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