SMALL BUSINESSES TO BE ADVERSELY AFFECTED

MBABANE - In most cases when the there is an aggregate increase in demand for basic goods and services due to money creation, the monetary and fiscal stability of the economy is weak.

Southern African Research Foundation for Economic Development (SARFED) Regional Coordinator George Choongwa mentioned that the money flow would have to be re-adjusted using contractionary measures which would in turn challenge the small business sector as access to money would have been expensive. “Loans and other monetary activities would be a challenge in the country. On the aspect of the fiscal adjustment, the increase in government spending on CoLA country will have slowed,” Choongwa advised.

Among several effects of the country’s failure to meet its economy recover target by 2022, Choongwa said it was prudent to realise that Eswatini would slide into huge pressure in meeting its conditions for various developmental sectors both local and international. For example, he said the country would suffer meeting basic financial and economic conditions for Southern African Customs Union (SACU) which has been one of its pillars for revenue. “The country will also have a challenge in meeting its long-term goals of meeting the sustainable development goals in 2030 which might further disadvantage its competitiveness,” added Choongwa.

The World Bank, through its 16th edition of the Ease of Doing Business Report 2019, disclosed that the kingdom was ranked at 117 out of 190 countries. This effectively meant Eswatini’s business environment continues to diminish on a yearly basis when taking into consideration the fact that in 2018, the World Bank ranked the country at 112 which was a regression from the 2017 ranking of 111 out of 190 economies. The Ease of Doing Business Report is one of the yardsticks used by investors in measuring the conduciveness of a country’s business environment. It is regarded as the best measurement by most investors.  Therefore the country’s poor ranking in this regard, put it at a competitive disadvantage in the southern African region more so because all countries in the region scramble for the same investors.

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