SA XENOPHOBIA TO SLOW DOWN SACU, SADC GROWTH

 MBABANE – The xenophobic eruption in South Africa has the potential for economic crisis in both Eswatini and regional market platforms such as SACU and SADC.

The Southern African Research Foundation for Economic Development (SARFED) Regional Coordinator George Choongwa has advised the Eswatini business community to take necessary precautions for the survival of their businesses.
He said this was due to a number of likely expectations which include the disruptions of currency and trade flows which were likely to be disrupted in the meantime.

Unsustainable

Choongwa predicted that the South African Rand was likely to depreciate, causing a poor and unsustainable bargaining power for Eswatini traders especially on the international commodity markets.

“We also expect inflation levels to increase as we are likely to experience shortages of essential commodities such as fuel, food and other related items; reduction in mobilisation of skill and transfer of human capital in the region.

There could be reduced global economic and investor confidence in the Southern African Development Community (SADC) region which might decamp individual countries like Eswatini, and Lesotho looking at the fact that they were pegged economies,” said Choongwa.

 Therefore, the economic researcher said it was advisable that local businesses in Eswatini take necessary precautions in due time.
In the SADC region, Choongwa said South Africa’s production and trade structure demonstrated the degree of the country’s economic influence.

He said this was because the country had been leading in terms of economic influence with a contribution of about 60 per cent of SADC’s total trade and close to 70 per cent of the entire region’s GDP (Gross Domestic Product), making it one of Africa’s desired economic hub, characterised by high levels of industry and trade.

Choongwa mentioned that South Africa actively played a critical role in pursing and upholding the SADC agenda of promoting regional integration through socio-economic and political stability by promoting partnership and collaboration with most of the countries either at bilateral level or sub- regional one such as SACU (Southern African Customs Union) which was an economic integration body of some of the southern African countries, strategically established to support both regional growth and economic growth for countries like Eswatini.

He recounted that some of the prominent results of such initiatives were the promotion of trade within the region for instance, in seven SADC countries, including South Africa intra-SADC export shares of their top five products exceeded or were close to 50 per cent in 2000.

“On a global perspective, South Africa has been the only African country that promoted trade and regional integration through its linkage with the BRICS (Brazil, Russia, India, China and South Africa).

Confidence

This has enabled the strengthening of the international investor confidence in Africa in general.  However, South African government’s failure or delay to handle the situation has potential draw back in Africa’s trade advancement,” added Choongwa.

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