ECONOMIC GROWTH 101

Economic growth, which Eswatini desperately needs, is about increasing real output of the economy over time. Yet, each time emaSwati find something that works for them to increase the number and type of economic activities through which they can make money to sustain their lives, government is quick to shut those activities down. If it does not shut them down, it finds ways to tax these activities to the bone until they do not make any economic sense to keep engaging in.

Government is yet to come up with economic policies that really make it easy for emaSwati to engage in business without fear of being taxed to the bone or pushed out of business when their businesses start making real money. By and large, Eswatini’s policies are about curbing activity and getting government into our pockets so that it can make ridiculous claims on every cent that we make. Look at how big and ineffective our public sector has become. This country has a central government responsible for looting tax funds and many parastatals in all spheres of the economy to control and regulate us to poverty.

The purpose of the Post-COVID-19 Economic Recovery Plan is to ignite as much economic activities as possible to increase the country’s gross domestic product (GDP) and increase the prospects of employment and income generation for as many emaSwati as possible. Government should also remember that Eswatini is still a developing nation that has a long way to go before it can start being snooty and exercising preferential treatment on the different types of economic activities that get to take place in Eswatini. News flash: Our ±E60 billion GDP and its associated ±E17 billion government revenue is nothing to rave about. This is hardly the operating budget for many cities in developed countries. Even some universities operate on a much higher budget than Eswatini’s GDP. But our government still insists that it does not want any growth that is not tied to the Southern African Customs Union (SACU). This government needs a reality check so that it can stop applying First World regulations on this struggling economy that is yet to even establish a proper and fully mechanised agricultural sector. It is not emaSwati’s fault that the SACU receipts will take a big hit due to COVID-19. 

Sympathise

While one can sympathise that government needs this revenue to fund the fiscus, cracking the whip on the remaining limited economic activities that are still generating money for the country, but not necessarily through SACU, is certainly not the answer. Eswatini needs to diversify the economy so that government does not hold businesses and people at ransom to swindle them to only engage in economic activity that guarantees Eswatini a good stream of revenue through SACU receipts. Is it not possible to maintain or grow the glorious SACU receipts while also encouraging growth of other income streams?

Even so, government always has options. It could have chosen other means of increasing its SACU revenue besides pushing ordinary citizens against the wall. The policy stance government has taken on imported vehicles is about taking the last bit of bread crumbs from the tables of struggling emaSwati. Right now it is war on ‘Dubais’, who knows what will be the next war to be wagered on consumers just so government can keep cashing in through SACU? Thinking of options, government can continue procuring its vehicles from the local car dealerships, which are definitely importing the darling Isuzus, Toyotas, Chevrolet and Nissans from South Africa. How about that as a start for protecting SACU? Government fuel, to be abused by CTA, can also be procured from South Africa. With all the roads and other capital projects ongoing, government can also streamline its procurement policies to import all materials/supplies from South Africa. These capital projects run in the billions of Emalangeni and is nothing compared to the money circulating because of used import vehicles. 

Strategy

What is really troubling is that protecting SACU is not an economic growth strategy but a ploy to protect government revenue. When the economy is finally streamlined to depend and import everything from SACU (in other words importing everything from South Africa), what will grow our GDP? The fact is Eswatini will not grow beyond the usual one to two per cent in GDP unless it cuts some of these crippling dependencies and learn to stand on its own. Don’t get this wrong; of course Eswatini needs SACU trade to grow. However, SACU is not the silver bullet for all growth and poverty reduction. Right now all SACU has done is giving government a false sense of security from a fake economy that is not producing anything for itself. Eswatini’s trade is more about propping other country’s economies than growing our economy.  Most of government’s policies are here to stifle growth and trust that SACU can only grow so much. The bigger question is how will government make payments for all of these loans that it keeps taking to fund the national budget, which is always running a deficit? In no time, it will be tabling yet another Bill, to tax us even more than we ever imagined possible.

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