SOME HIGHS, LOWS OF 2021

MBABANE –The curtain finally falls on what has been a dramatic 2021 this coming Friday.

For Eswatini, it is hard not to mention 2021 and unrest in the same sentence. The unrest made the year a disastrous one for both businesses and families as lives and livelihoods were greatly affected. Bigwigs in the business and corporate world were also lost and they included Public Service Pension Fund (PSPF) Chief Executive Officer Langalakhe Dlamini and Federation of Eswatini Business Community (FESBC) Vice President Hezekiel Mabuza. Every cloud has a silver lining. We reflect on some of the highs and lows of 2021 below.

THE HIGHS
Eswatini off tax grey list
The European Union announced a revised tax haven blacklist. The list is used by the member States to tackle external risks of tax abuse and unfair tax competition. Eswatini no longer appears on the recent list of jurisdictions deemed to be non-cooperative for tax purposes, particularly where it comes to sharing tax information.

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Agri-business on Eswatini Nation Land
Agriculture is a critical sector in the country’s economy. When a Bill to promote the promotion of agriculture on Eswatini Nation Land was gazetted in November, it meant a giant step towards boosting the sector and achieving food security. The Bill provides for demarcation and allocation of Eswatini Nation Land for agri-business. The Bill will be tabled in Parliament before it is passed into law.

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Commercial Court established
The country took a giant leap towards improving the ease of doing business. This was through a decision to finally establish the Commercial Court. One of the key pillars/indicators of doing business is enforcing contracts and it calls for the introduction a specialised court dedicated to hearing commercial cases.

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Eswatini digital currencies
International Monetary Fund (IMF) revealed that Eswatini was one of few African countries that were allowed to issue digital currencies under existing laws.
The five African countries on the list are Eswatini, Ghana, Madagascar, Tunisia and South Africa.The  IMF came out with  a report showing that close to 80 per cent of the world’s central banks were either not allowed to issue a central bank digital currency under existing laws, or the legal framework was not clear. Digital currency  is any means of payment that exists purely in electronic form.

THE LOWS
E182m revenue loss
The late June violent protests characterised by looting and torching of businesses across the country will result in about E182 million revenue loss for government.

What started off as rampant political protests in June this year following government’s decision to ban the delivery of petitions largely by the youth to their Members of Parliament at the Tinkhundla Centres, escalated to unprecedented riots which spread all over the country. There was looting, property damage and road closures affecting the country’s main economic arteries, particularly Matsapha. From available data, the revenue loss due to the unrest was estimated at E182 million. The affected tax lines include Value Added Tax (VAT) due to loss of business days, company income tax (CIT),which is forfeiture of revenue resulting from losses of business days and the damage to property. Also affected was the pay-as-you-earn (PAYE) as a result of job losses and fuel tax caused by the shortage of fuel as a result of low volumes sold.

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Swazi Spa liquidation
It is still unbelievable. The High Court of Eswatini issued a final order for the liquidation of five companies under Sun International Management Limited. The affected companies include Eswatini Stock Exchange-listed Swazi Spa Holdings, which was operating SwaziSpa Hotel and Casino, Lugogo Sun and the Ezulwini Sun. The unexpected move resulted in massive job losses while a giant in the hospitality industry disappeared.

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Sugar industry threat
While Southern African Customs Union (SAC) member States, especially Eswatini, have raised concerns about South Africa’s master plans affecting mainly the sugar and textile industries, the neighbouring country was pressured to go ahead with the implementation. The master plan simply calls for the reduction of sugar imports in South from countries that include Eswatini. Sugar is the country’s main export commodity and Eswatini is the fourth largest sugar producer in Africa and the 25th largest producer in the world. Sugar production accounts for over half of Eswatini’s agricultural output and contributes about E4 billion to the country’s gross domestic product.

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NMC subsidy programme
There was a lot of drama surrounding the government input subsidy programme which is delivered through National Maize Corporation (NMC). Not only were the number of agro dealers benefiting from the programme cut, but the list was released belatedly. These derailed farmers who wanted to plough early and the scarcity of some of the inputs, mainly fertiliser, worsened the situation. While the shortage was not government and the NMC’s fault, releasing the list of agro dealers on time would have helped the farmers to know which inputs were available early.

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