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‘PRIORITISE ECONOMIC DIVERSIFICATION’

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MBABANE – The National Budget to be delivered by the Minister of Finance, Neal Rijkenberg, in a few hours has to prioritise economic diversification and inclusive entrepreneurship.


The Regional Coordinator of the Southern African Research Foundation for Economic Development (SARFED) and economist, Dr. George Choongwa, said the fact that economic growth projection in the country was at 2.6 per cent this coming financial period of 2020/21; this year’s current budget was expected to prioritise two items namely: economic diversification and inclusive entrepreneurship as a balance between macro and micro economic policy development in Eswatini.


He said: “The kingdom of Eswatini has great opportunity and capacity to grow if much priority is given to the development of both diversification and inclusive entrepreneurship.”


These avenues, he said, would not only boost the local economy but also make it more competitive as the country would stand a chance of becoming an engine of economic growth in the Southern African region.


infrastructure


Dr. Choongwa said despite the fact that  primary infrastructure (roads, electricity, water, and telecommunications) was relatively well developed and modern in Eswatini, macroeconomic performance had continued to stagnate, with real gross domestic product (GDP) growth averaging 0.5 per cent in 2018.


For this to happen, Dr. Choongwa said the country could achieve and maintain a high and sustainable economic growth if it maintained a balance between micro and macro-economic policy implementation through prioritisation of both economic diversification and inclusive entrepreneurship. 


impact


In order to attain these steps to boost the economy and bring impact of economic diversification to the economy, the economist scholar said: “Economic diversification will boost GDP and reduce over dependence on the Southern African Customs Union (SACU).


The benefit of engaging and strengthening the economic diversification agenda in the country gives the country’s build of high resilience and self-dependability on its local production and boost of the GDP. This would ultimately make the country reduce it’s over reliance on SACU receipts.”


Economic diversification, according to Dr. Choongwa, would promote export growth for both small medium enterprises (SMEs) and corporates.
He said currently Eswatini’s economy was heavily reliant on imports mainly from South Africa which constituted approximately 90 per cent of the country’s imports in comparison of about 65 per cent of exports to the same neighbouring country.


exploration


As with regards to the exploration of other international markets like the United States of America, Dr. Choongwa said, research indicated that US exports to the country accounted for less than one per cent of local imports. 


He said the Eswatini Country Commercial guide of 2019 reflected that US imports from the country accounted for 1.5 per cent of its exports. 
Therefore, he said the budget should take advantage of the African trade market.


“If Eswatini engaged in diversification, the chances of taking advantage of both African and inter-continental trade markets will be very high; Eswatini is a member of other regional trade organisations like the Southern Africa Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA - 390 million people), among others.”


 On the inter- continental platform, he said, the country still had the privilege to explore platforms like the World Trade Organisation(WTO) where it would take advantage of even attracting more productive Foreign Direct Investment(FDI) which would in turn boost the country’s productivity.

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