ESTABLISH ALTERNATIVE TRADE LINKAGES – SARFED

MBABANE - South Africa’s declaration of shutting down of its border gates has an adverse impact to both the Eswatini economy and the SADC at large.

This is the feeling of the Southern African Research Foundation for Economic Development (SARFED). SADC is the Sothern African Development Community. Due to the prevailing COVID-19 pandemic, SARFED Regional Coordinator George Choongwa shared that the country’s growth was expected to fall by 6.7 per cent because of the lockdown and disruptions in economic activities some of which are as a result of South Africa’s cross border trade restrictions.

Choongwa felt there would be adverse implications of South Africa’s continued border restrictions during the COVID-19 pandemic which included limited supplies of goods and services to Eswatini due to trade restrictions which might either delay or completely cause a stoppage in the flow of goods and services. “More than 70 per cent of Eswatini’s import, either on micro, meso, or macro level comes from South Africa. Therefore, the restriction of trade flow between the two countries likely to cause a negative effect on the three levels of economic performance (micro, meso, and macroeconomic level),” he shared.

Merchandise

More than 60 per cent of the local small, micro and medium enterprises (SMEs) in Eswatini were in retail trade with merchandise from South Africa. “Only the minority SMEs were engaged in local resource mobilisation for production, hence trade restrictions imposed by South Africa will frustrate these small scale and emergent traders who are likely not to survive if South African continues to impose its  border shut down polices” stressed Choongwa.

According to the SARFED, Eswatini’s free movement of both goods and individuals between South Africa and Eswatini contributed to the country’s revenue through people who either worked or would find employment in South Africa. With the decision made by the South African government these remittances would equally be cut down, leading to a further reduction in the disposable income for the Eswatini community.

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