As the south eastern African country stands on the brink of financial collapse, the international Monetary Fund (IMF) urged it to cut its government wage bill to limit the damage.
After the country took out a massive loan this week to foot civil service salaries, the global body warned that spending had stalled on HIV/Aids, education and the elderly. Aids orphans alone were owed a total £6.3m, it said.
Landlocked Swaziland has the world's worst HIV/Aids infection rate in the world with 26 per cent of its adult population infected, leaving some 69,000 Aids orphans. The situation is likely to get worse as the infection rate among 20 to 30-year olds is much higher at nearly 50 per cent. About 65 per cent of orphans in Swaziland are Aids orphans.
The IMF's Joannes Mongardini told the BBC that the government owed £6.3m in grants to orphans and £2.5m to elderly people since September.
He said the IMF had asked the government to reduce its wage bill by five per cent by slashing, among other things, ‘generous allowances’ given to politicians and top civil servants. And all Swazis including the royals will need make sacrifices if the kingdom’s finances were to improve, Mr Mongardini added.
Speaking after a visit to Swaziland, an IMF team headed by Mr Mongardini said Swaziland's government was facing ‘severe liquidity constraints’.
"Government revenue collections are insufficient to cover essential government expenditures, including the wage bill," it said.
"More importantly, key social programs... are being negatively affected."
Activists say extravagant spending by King Mswati III and his 20 wives has made Swaziland's slump worse. The monarch has a fortune which is put at anywhere between $100m and $200m, while most of Swaziland's 1.4 million people live in absolute poverty. This year, people have been protesting on the streets calling for overthrow of Mswati, who has been in power for 25 years.
Swaziland is still to accept a £255m bailout from neighbouring South Africa after its business capital Pretoria set a series of conditions.
According to the Joint United Nations Program on HIV/Aids (UNAIDS’s) Epidemic Update 2009, average Swazi life expectancy fell by half between 1990 and 2007, partly because of the size of its Aids epidemic. About 190,000 people in Swaziland are HIV positive, including 15,000 children under 15.