Grabbing the bull by the horns to grow the Eswatini economy
The Kingdom of Eswatini has made encouraging strides in housing and health provision in recent years, as well as in improving the education system. The country enjoys renewed standing in the international community, including historic membership of the International Labour Organisation’s governing body.
As with many other developing countries, we have our challenges. Along with the global economy, ours has been hard-hit, forcing us to make tough but necessary decisions.
The Eswatini Strategic Roadmap 2019-2022 flows from the directive given by King Mswati III to the incoming government administration, in collaboration with all Emaswati, to work tirelessly to revive the economy in the shortest possible time.
The challenges facing Eswatini include unemployment, poverty, sustainable economic development, provision of quality health services, education and social welfare for all Emaswati.
The strategic road map is a culmination of extensive research and consultations on feasible quick wins, combined with long-term goals. It aims to introduce a new range of measures that have the most potential to kick-start the journey to economic revival and inclusive growth, taking along Emaswati at home and abroad.
Coming into office in November 2018, it was clear that something urgent needed to be done to rejuvenate the economy. Government revenues are lower than expected and expenditures are continuously increasing. This is driven by declining receipts from the Southern African Customs Union (Sacu) and ever-increasing government expenditure.
Despite this downturn, we are projecting an increase in Sacu receipts in the coming year. This, however, is not enough to stem the tide, and more needs to be done for the country to return to sound economic health.
Much as we are encouraged by the projected increase in domestic collections by the Eswatini Revenue Authority for the financial year 2019-2020, these will not be sufficient to offset the arrears accumulated over the years. The collections will not be sufficient to meet the government’s finance requirements for the fiscal year.
We share and acknowledge the IMF’s concerns with regard to government spending on certain items. These, together with historic challenges to the economy, demand that certain tough decisions be placed on the table for consideration.
The expansionary fiscal position has surpassed sustainable levels, resulting in the accumulation of arrears, increased depletion of reserves and constrained growth. Potentially unpopular decisions and sacrifices will have to be made to ensure we table a fully financed budget.
The country must take the necessary measures to curtail expenditure while looking for creative ways of enhancing government revenue. In simple terms, the country cannot afford to spend what it does not have, or hopes to have in future. It is patently unsustainable that the public wage bill makes up about 37% of the budget. It is plain to see why urgent work needs to be done, and is being done. The public service needs to be streamlined to ensure a culture of excellence across sectors.
The government has identified five areas as critical to our country’s economic recovery. These are agriculture, manufacturing and agroprocessing, energy and mining, tourism and the ICT and education sector.
With regard to tourism, Ezulwini will soon have a new five-star hotel and an international convention centre to add to the attractive tourist destination our nation is renowned for internationally. To prepare for future energy needs, the government has commissioned a study into the use of thermal and solar power as alternative energy sources.
These, along with improved broadband penetration and the expected reduction of the cost of data, give promise that efforts to take the country down the digitisation path and clean technologies are well on track.
Rejuvenation of an ailing economy needs a strong criminal justice system to identify and punish those who seek to enrich themselves through criminal means. As an addition to existing law enforcement agencies, the kingdom has established an asset recovery unit to trace and reclaim the proceeds of crime, including corruption.
An economy can only grow with the nurturing of the nation’s next generation of entrepreneurs. That is why the kingdom has relaunched the Youth Enterprise Revolving Fund to encourage young entrepreneurs to start businesses and create employment. This is in addition to the normal university scholarships across various disciplines that the government offers to deserving students.
Eswatini is not only open for business but is also committed to play its role in ensuring lasting stability in the region and on the continent. The Kingdom of Eswatini is acutely aware that the success of its plans is partly dependent on partnerships with governments and foreign direct investment.
• Dlamini is Eswatini prime minister.
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