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MBABANE – SARFED has reacted to reports suggesting that there might be a restriction on South Africa’s exports.

This is because Eswatini imports about 70 per cent of goods, mainly food stuffs, from South Africa. The Southern Africa Research Foundation for Economic Development Regional Coordinator, George Choongwa, said if there would be an introduction of any export limit by South Africa, it would create serious food shortage and insecurity in the country.

“So far, according to United Nation’s report, the COVID-19 pandemic cut global trade values by not less than three per cent in the first quarter of this year.
“This might be worse as the pandemic advances and import-based economies like Eswatini might have serious negative implications.
The country imports about 70 per cent of its commodities from South Africa and any decision taken by that country to restrict export might create serious negative ripple effects on the Eswatini economy if no contingency measure is taken on time.

It is expected that in meeting their local demands of goods, especially basic ones, most of the exporting countries, including South Africa, might introduce either a total ban or restrictions (quotas) on exporting/ importing both to and from other countries, including Eswatini.


 This might lead and plunge the economy into a socioeconomic recession where the reduction of economic activities will disadvantage the entire economy of the country, both at micro and macro level.

“Unlike the financial-based recession where mostly the affected were the huge, formal institutions like banks and companies, the expected recession will have a huge negative impact on both micro and macro-economic, affecting and ravaging both rich and poor.  It might hit even the poor of the poorest in the society since it will be a socioeconomic-driven recession,”  said Choongwa.

As a way forward, SARFED is recommending that government can subsidise local production of basic goods, especially in the agriculture sector, so as to maintain consumers buying power.

“Regulation of prices commodity may not be ideal as producers would need to meet the demands of high cost of production due to unfavourable trading landscape. However, government’s revision of production policies would save the economy from having a market failure,” said Choongwa.

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