THE NEXT 21 DAYS

NOW is really the time to be super paranoid about protecting yourself and your loved ones against COVID-19. The next 21 days will see an ominous cloud hanging over the Eswatini economy because there is something unsettling about the slow rise in the number of COVID-19 cases in this country.

It seems like we are not really getting the true picture of the coronavirus curve for the Eswatini situation. Don’t get this twisted; the point is not to push some fear mongering but to engage us all into some rational thinking.

The problem is that it is not really clear whether the confirmed cases are at 24 now because they really are at 24 or there are other underlying and insidious factors at play that will catch up with us in the next few weeks, while everyone has settled back to their business as usual routine. What is unnerving about the recently confirmed cases is that they cannot be traced back to the source of infection and hence the minister of Health alluded to the fact that there might be some community transmissions that we are not aware of.

Cases

If the total cases are truly at 24 and our government is doing a good job quarantining and contact tracing suspected cases, then a relaxed extension of the lockdown is a welcomed compromise to save livelihoods. It is easy to see why government decided to end the lockdown using a creative extension because it had to allow a big part of the economy to go back to work to avoid a catastrophic economic meltdown that would require billions of Emalangeni in bailouts.

But let us not let out a sigh of relief yet; the next 21 days will really reveal the true picture of the COVID-19 situation in this country. In the meantime, people have to take the responsibility upon themselves to be super vigilant and obsessed about keeping themselves sterile and protected from any exposure to the virus. The problem is that we cannot see the virus and we do not know who among us has it. So testing and isolating people should be the order of the day.

Bailouts

On the issue of bailouts, the Eswatini economy definitely needs a stimulus and there are also some creative ways that can be employed to ease pressure on the cash-strapped government. One direct relief that was offered to consumers was the E1 drop in fuel prices, which unfortunately is not enough. The minister of Natural Resources and Energy can afford to spare a few more bucks to further cut fuel prices to a level that is reflective of free market dynamics.

The world market price for a barrel of crude oil has gone down significantly in recent months and so government should be considerate of this fact to provide this relief to emaSwati. Moreover, government also stopped capital projects in the interim to direct available funds to the COVID-19 fight but a lot of the resources that have been mobilised so far have come as donations and there hasn’t been a significant amount of money that has been allocated and set aside by government to deal with recovery and the aftermath of the pandemic on the economy.

It is a sad truth that government is unable to table a real and direct stimulus to consumers and businesses because there is no money and our tax system cannot be depended upon to shield the country in times of economic shocks. Other countries are able to take on more debt to fund their economic stimulus packages because they have been prudent about how they use their tax revenue in their G-wallets, for the most part using money to put the needs of their people first.

To rescue a dire situation, particularly for our most vulnerable businesses, government has offered E90 million for small and medium enterprises (SMEs) to be able to claim up to 25 per cent each month of the tax they paid to the Eswatini Revenue Authority (SRA) in 2019. Do we have the figures on the average amount of money each SME is expected to benefit from the 25 per cent? Will it be enough? What about those SMEs that were not able to pay taxes because they were still owed by government in unpaid arrears to its suppliers?

On the whole, we have justified reasons to expect more from government, particularly from the tax revenue aspect of things, because many of us in the formal economy have been paying our monthly dues to the SRA. Now is the time to give back with the view of stimulating the economy so that the money can go around to support even those who have unfortunately lost their jobs or have ended up seeing their pay cheques being cut.

To give a few ideas to government and SRA, individual income taxpayers under Pay as You Earn carry a big portion of the tax burden so now is the time to cut the tax from 33 per cent down to a level that can sustain essential public services until the COVID-19 emergency passes. In fact, government should have cut the tax burden on our first responders such as doctors, nurses, paramedics, etc as part of the initial COVID-19 regulations as an incentive to these responders risking their lives to save the nation.

Government should put a hold on all unnecessary spending including capital projects to allow itself to operate on a lower budget that can accommodate the tax cuts that should be given to tax payers. It should consider cutting tax by half from 33 per cent to 15 per cent as it cannot keep ducking away from the fact that it has to stimulate the economy. This is one way to do it; it is just a suggestion.

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