ESWATINI URGED TO PROVIDE FOOD INCENTIVES

MBABANE – Eswatini and all other African governments have been urged to provide incentives for food importers to quickly forward purchases to ensure sufficient food reserves in key basic food items.

This is a recommendation of a study on the Economic Impact of the COVID-19 on Africa concluded in Adidas Ababa, Ethopia, on March 13, 2020. It was conducted by the United Nations Economic Commission for Africa. The report revealed that Eswatini ranked 14th among the only 15 net exporters of basic food in Africa. Investopedia defines net exports as a measure of a nation’s total trade. The formula for net exports is the value of a nation’s total export goods and services minus the value of all those it imports. A nation that has positive net exports enjoys a trade surplus. Negative net exports mean the nation has a trade deficit.  The country’s net exports (balance of trade) for the period considered in the study (2016-18) was estimated to be around 0.2 US$ billion (over E3.8 billion).

Basic food may include rice, maize and its products, wheat, poultry and its products as well as edible oil, among others.  The National Agricultural Marketing Board (NamBoard), in its 2017/18 annual report, reported that the export value for these goods was E352.6 million. “African governments could review and revise their budgets to reprioritise spending towards mitigating expected negative impacts from COVID-19 on their economies, such as preparing fiscal stimulus packages (e.g. guaranteeing wages for those unable to work due to the crisis, favouring consumption and investment,” reads the report.

Disruption

According to the study, there would be disruption of global supply chains –drop in value creation and slow down in investment hence job losses, due to the virus. Also predicted are inflationary pressures due to supply side shortages. For the whole continent, unanticipated health spending of up to US$ 10.6 billion (over E200 billion) is expected. Revenue losses, according to the report, could lead to unsustainable debt. The report stressed on the need to maintain infrastructure investments to protect jobs. Also expected during the crisis is a decline in foreign direct investment flows as well as domestic financial market tightening.

The decline in commodity prices could lead to fiscal pressures for Africa’s largest economies like Nigeria, South Africa, Egypt, making it impossible to respond to the COVID-19 crisis.
Regarding pharmaceuticals, the report noted a high external dependence as US$16 billion or 94 per cent was imported by the continent. “All African countries are net importers of medical and pharmaceutical products,” concluded the report. COVID19 affected countries are said to be Africa’s main exporters of medical and pharmaceutical products. “From Africa, South Africa is the largest source of imports (2.2 per cent of Africa’s total imports).

Directed

African exports of medicinal and pharmaceutical products, although quite limited, are essentially directed to Africa (56.5 per cent of Africa’s total exports,” reads the report. Interestingly, the report ranked the country ninth in Africa regarding the exports of medical and pharmaceutical products.  Both Minister of Agriculture Jabulani Mabuza and Principal Secretary Bongani Masuku’s phones rang unanswered when sought for comment on the basic food rankings. This publication also wanted to establish if the harvesting of crops, especially maize, would be affected due to the coronavirus, which spreads in crowds.

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