CONCERNS AS COVID-19 COVERS 60% OF SACU

 MBABANE – It never rains but pours. Just when the SACU members are still coming to terms with the recent downgrade to recession status of fellow member South Africa, another setback has emerged. SACU is the Southern African Customs Union and Eswatini is a member alongside Botswana, Namibia, Lesotho and South Africa.

The coronavirus pandemic has spread to three of the five countries under SACU. Affected SACU members at the time of compiling this report included Eswatini, Namibia and South Africa.

This might lead to reduced economic activity in the affected countries and further shrink the shared revenue pool.
Traditionally, South Africa and Namibia, who boast bigger economies than Eswatini, are some of the biggest contributors to the shared revenue pool.
For 2018-2019, the pool distributed about E98 billion, with South Africa receiving E44 billion.

For 2019-20, SACU receipts for Eswatini increased from E5.8 billion to E6.3 billion and contributed about 36 per cent to the total revenue which is equivalent to nine per cent of gross domestic product (GDP).
When presenting his budget estimates for 2020/21 last month, Minister of Finance Neal Rijkenberg had said Eswatini was in a year of improved SACU receipts.

Lower growth in South Africa is associated with declines in the regional economies closely associated with Southern African powerhouse.
Borders
The positive so far is that most of the borders remain open. Botswana Health and Wellness Minister Lemogang Kwape was quoted by that country’s media saying that they would not close their borders after cases of the novel coronavirus were confirmed in South Africa. The cases were 13 at the time (now 51).

Eswatini’s Minister of Commerce, Industry and Trade Manqoba Khumalo, in a statement released two days ago, assured that cross border trade would continue and would be prioritised as the country would continue to assess the situation.
“Businesses, traders and transporters are encouraged to exercise extreme caution and abide by the hygiene protocols issued by the World Health Organisation (WHO) to prevent transmission.

Officials at border posts and all ports of entry for goods are also encouraged to exercise similar caution,” said the minister.
A local economist also felt the continued spread could be disastrous, as panic was equally spreading fast and it could lead to unwanted decisions regarding trade.

Implication

“This might have a great negative implication for the country. There is no guarantee that the borders will remain open in all the affected countries,” said the expert.
At the time of compiling this report, South Africa had registered 51 coronavirus cases. Namibia and Eswatini had two and one, respectively.

There were no cases in Botswana and Lesotho, with the latter dominating newspaper headlines in the past week after fears of a border shutdown, which was not implemented as earlier suggested.

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