The government of South Africa has agreed to provide a 2.4-billion rand ($355-million) loan to the neighboring kingdom of Swaziland, which is in the throes of a deep financial crisis.

Swaziland's King Mswati III, the last absolute of monarch in Africa, praised South Africa for being a "good neighbor.”

Speaking at his palace, Ludzidzini Royal Homestead, near the capital Mbabane, Mswati declared: "We are thankful and also appreciate the assistance we have received from South Africa. This shows that they are good neighbors,” according to the Times of Swaziland newspaper.

Reportedly, the king’s application for a loan from the International Monetary Fund (IMF), among other financial institutions, was summarily rejected.

The loan is bound to be unpopular in many quarters of South Africa, given that the Swazi king lives in extreme luxury while the vast majority of his 1.2-million people are trapped in poverty.

However, South African officials believe that helping Swaziland financially will help to prevent instability in the region.

Swaziland is a member of the Southern African Customs Union (SACU), while its currency, the lilangeni, is pegged to the South African rand. Indeed, the Swazi crisis was partially due to a sharp fall in revenue from SACU. Other causes, of course, include the global financial crisis and the king’s lavish lifestyle (he has thirteen wives and many servants) and his habit of granting unbudgeted wage hikes for civil servants.

Meanwhile, Swazis –who are facing a severe cut in social services and living in a country on the brink of financial ruin -- are demanding political reforms and a lifting of the ban against political parties.

Health care in Swaziland (which has one of the world’s highest rates of HIV/AIDS infection) is also at serious risk due to the financial malaise.