Times Of Swaziland: ECONOMIC COSTS OF INDIFFERENCE

ECONOMIC COSTS OF INDIFFERENCE
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Sanele Sibiya on 14/07/2021 08:12:00


It’s been three weeks since we entered this state of political crisis which
culminates into economic uncertainty.
I cannot overemphasize the fact that the economy does not like uncertainty,
because uncertainty is quite a tricky state of affairs to handle, it makes for a
bad business environment. Imagine trying to run a business and you are not sure
if your baker will deliver bread tomorrow, you are unsure if your gasoline
consignment will come through. Imagine how hard it must be for the retailers to
plan their supply chains right now, imagine having to constantly pray when your
trucks and a E10 million consignment enters Eswatini, and having to pray that no
riots and looting takes place. Imagine not being able to buy bread even if you
have money, simply because it is not there, you cannot find rice even if you
have the money for it. Well this is becoming the new normal in Eswatini and it
seems that the authorities could not be any bothered to resolve the situation.
Allow me to shed light and give you a rundown of what to expect if the current
crisis is not abated.
Economic impacts
As it were you are already queuing for fuel, and that is only the genesis of the
problems we are to face. Gasoline, like electricity, is the back-rock of the
economy; it’s an input into the production process of a number of commodities.
What the gasoline shortage signals is basically that we should be bracing for
rampant inflation, your retailer will have to factor into the price the fact
that fuel is now scarce and its more of a process to get your food to you on a
daily basis. Your Quantum guy will begin charging you more to get you to places,
because he will now also struggle to get the fuel. This will mean that you now
have to invest more time searching for cheaper alternatives and less time spent
in productive endeavours. I can almost foresee a situation where you literally
have to walk to work, well that is if you will still be lucky enough to have a
job and absenteeism is likely to rise since at times you will not even have
enough money to get to work. Imagine you approach your banker to smooth your
cash flow and s/he turns you down because the uncertainty makes your ability to
service the debt unpredictable. All of this is happening in the backdrop of the
COVID-19 pandemic; essentially we are dealing with two unfolding crises in the
country. Last year we posited a negative growth or 3.3 per cent and we were only
dealing with the pandemic. Now imagine how our growth prospects look with the
current political unrest.
Spiral effects
The foregoing analogy is meant to show how we are just at the onset of a
downward spiral or decay in the state of the economy. The unemployment figures
are going to increase; the inflation rate is also set on an upward spiral. The
pandemic is also doing great damage to our socio-economic position as a country,
our children are missing out on school, there is some E200 million meant to
secure vaccines for the country but it seems no one wants to use it, we are
waiting on the COVAX facility to supply us with vaccines. The degrading economic
climate will continue catalysing the political unrest and before we know it we
will be caught in that loop where we are an economy that is just set on survival
and no growth.
Role of government
The people of Eswatini are looking up at government to solve the current crisis,
but there is just no solution in sight. Government seems to be failing to secure
vaccines for the country and to quell the ongoing unrest. It would seem that
government was just focused on kubuyisa emapaka ashukela, rather than dealing
with the fundamental problems that we face as a country. Restoring law and order
was necessary, however, what suffices is for government to deal with the
problems raised and restore a political equilibrium which will be conducive for
an economic equilibrium. In siSwati they say ‘uma imvu ideda akusho kutsi
seyehlulekile, isuke iyotsatsa emandla’. That adage holds true for the current
situation we are facing as a country. The indifference to the current political
and economic problems will not make them go away. This is equivalent to seating
on a time bomb and when it explodes the country will burn again. It is the role
of the incumbent government to effectively deal with the current issues tabled.
In the event even we are faced with a government failure we need our civil
society organisations to execute their role and assist in re-ushering social
cohesion in the country. The current political crisis is a major threat to the
economy and to our growth trajectory and success.