SUSTAIN EXISTING ENTREPRENEURS – SARFED

MBABANE – “This might not be the time of funding start-up entrepreneurs, but sustaining the existing ones as they may potentially be instruments for mass production.”

That is an observation made by the Southern African Research Foundation for Economic Development (SARFED) in article entitled, ‘higher urban poverty expected up to 2023.’

 This is in reaction to the socio-economic challenges that are likely to be caused by the advent of COVID-19.

SARFED Regional Co-ordinator George Choongwa said local production, if catalysed, would bring about efficient production of goods and services. These would be instruments of sustaining the circulation of income in the economy.  

“This might not be the time of funding start-up entrepreneurs, but sustaining the existing ones as they may potentially be instruments for mass production.  The danger that comes with starting up new entrepreneurs is that of risk management and late business maturity of which might not be the desire of the country at the moment,” said Choongwa.

Structure

Choongwa highlighted that the wave of the COVID-19 pandemic resulted into fractional disarray of the socio-economic structure of the country, forcing it into an acute socio-economic recession. “Therefore, the country should be prepared to embrace one of the worst socio-economic experiences which is likely to take a toll of three years (expected to last up to 2023),” stressed Choongwa.

According to research as indicated by the World Food Programme report of 2020, the country’s Human Development Index, recorded 49 per cent, making it the 10th highest income inequality in the world. 

“Furthermore, the Kingdom of Eswatini Voluntary National reviews of 2019 report, the proportion of people living in poverty and below the international poverty live remains very high with about 58.9 per cent of which the rural population lives below the national poverty line.

Not only has COVID-19 disadvantaged a given economic cluster, but the entire economic system of Eswatini. Thousands of jobs have been lost during the COVID-19 era as a result of failed market and industrialisation. This has been evident in the micro-labour force within the private sector,” shared SARFED.

Choongwa further noted that the country was now witnessing loss of Southern African Customs Union (SACU) receipts due to shrinking of the global market both for SACU and Eswatini in particular. 

“These, collectively, are expected to bring about higher levels of poverty especially among urban dwellers in Eswatini,” he said.

Situation

With very little or delayed intervention, according to SARFED,  the country was likely to undergo into a situation where the poverty divide would be widened, where the poor would become poorer as they would face high income inequalities. 

Among the interventions suggested by SARFED is rationalising essentials. 

“Government must continue to rationalise consumption of essential goods. Price capes and consumption quantity control can be enforced on basic goods to maintain the constant flow of goods. This would work as a form of social security that would ensure that inflation was under control,” said SARFED.

SARFED further called for the regulation of private funding.  Choongwa said if not well regulated, private funding might cripple the sustainability of the economy through the reduction of interest rates which might bring about the incurring of debts and liabilities by the private sector and small and medium-sized enterprises (SMEs). 

SARFED further advocated for the strengthening of the human capital to promote the sustainability of the country’s gross domestic product (GDP) per capita. This would help both households and private firms intensify their levels of productivity and eventually rise in the domestic revenue.  

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