THE POLICY STATEMENT

My thoughts are premised on the Policy Statement of 2024 as presented by His Majesty’s Government to the people of Eswatini. My thoughts on the policy ought not be viewed in bad light; however, be taken in good stride as an input and my contribution to nation-building and contributing to the overall development of the nation. The first impression that the policy statement brings is ambition.

It sets out a number of ambitious targets, however, it is my professional opinion that it is not a pragmatic policy statement. We would be amiss as a country to surge forth with the implementation of a strategy that is not practical. Hence today I share my thoughts on how we can fine-tune the policy statement so that it is potent and moves us forward as a country and shift the economy in the right direction.

Economic growth

The ambitious target of an average of 12 per cent over the five years is too ambitious, also, it is confusing to the nation as the very government had set a target of 5 per cent growth in gross domestic product (GDP) this current year. The nation needs a single number to rally behind and also hold the duty bearers accountable based on that number. Reading through and analysing the statement one can confidently conclude, that we are moving away from private sector-led growth to state capitalism or government-led growth. I am not going to discount the positive aspects of state capitalism, but I worry if we have the means and the ability to sustain deficit financed by state capitalism.
State-Capitalism
At present, the country’s debt-GDP ratio approximately stands at 38 per cent and will likely hike to 43 per cent with the financing of the Mkhondvo-Ngwavuma dam project, through an external loan. This figure is not inclusive of the E4 billion bond, of which E400 million has been raised from the JSE. Essentially, we are looking at 47-49 per cent debt to GDP ratio. To drive state capitalism, we would need to raise more money and I worry if we will run a sustainable debt path with this abrupt change in policy. I say abrupt, because the previous administration was pursuing private sector-led growth, and until the policy was published that seemed to be the direction which even the current administration was taking. Given the fiscal challenges that the country faces, it is my professional opinion that private sector-led growth is the best policy path for the kingdom.
Private Sector
I urge the government to fine-tune the policy statement so that we do not veer of a sustainable policy path. The fundamentals were finally falling into place, the previous administration worked hard to put the fundamentals in place. I contend that government should focus on building an enabling environment for the private sector to thrive. Government farms should be utilised by private investors and probably rented out at low rentals.
The rentals could be used as an incentive to allow private farmers and businesses to utilise the farms. Furthermore, government should extend and re-capitalise the loan guarantee schemes offered to the private sector. Government should focus on building backbone infrastructure in ICT and all other areas to ensure that businesses are able to thrive and grow the economy. I do not advise that government should enter into business. In countries where state capitalism has worked, it is usually to kick-start certain industries and exit soon, as private sector has grown enough to lead.

Education

The statement points out that the government will work with stakeholders to re-align the courses offered in our universities. On this point I argue that we need to focus on restructuring our education system into an efficient one, with the ability to adapt to changing economic trends. The focus should be on institutional transformation throughout the education system, build in mechanisms that will always ensure that the system adapts, so that it remains relevant. The main focus of government with regards to the education system is coming up with a sustainable funding model. The funding model should also, as an incentive, reward institutions that are relevant with the times and punish those that lag behind. This will act as an impetus for the education sector to always adapt, to meet emerging needs of the country.

Corruption

Corruption is a cancer affecting the country, as it has brought the health sector to its knees. I feel that the statement is too soft on corruption, I say this because the statement focuses on building the capacity of state organs, however, it is mum on prosecution and holding perpetrators accountable. I did a word search and the word prosecute does not even appear in the statement. I was hoping for a clearer stance on what we are going to do as a nation to combat the rampant levels of corruption in this beautiful kingdom of ours.

Conclusion

I advise that the government focuses on three binding constraints instead of trying to address everything. Evidence shows that if you address binding constraints usually, about 70 per cent of the problems that one faces will be solved. I urge the government not to abandon private sector-led growth.

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