GOVERNMENT’S PLAN TO COST E67 BILLION

MBABANE – So what will it take, monetary wise, for the Kingdom of Eswatini to implement, in the next three years, the road to Vision 2022?

On Monday, the Prime Minister Ambrose Mandvulo Dlamini-led government launched two key documents that outline how Eswatini aims to reach First World status by the year 2022.

These documents, both of which have one common goal – economic recovery, are the Eswatini Strategic Road map and the National Development Plan (NDP).

As explained by Minister of Economic Planning and Development Dr Thambo Gina, the NDP appears to be the all-encompassing document.

According to the minister, the NDP comes at a time when the kingdom is faced with a challenging economic situation characterised by sluggish economic growth, a fiscal crisis, high levels of unemployment that is affecting the youth in particular, high levels of poverty and inequalities, low levels of foreign direct investment and poor human development indicators that are not in line with the middle-income status of the country.

“This National Development Plan (NDP) is aimed at addressing these challenges by pursuing an economic recovery stance and, as such, it incorporating the Strategic Road map, which is focused on turning around the economy towards a recovery path,” Gina states in the document’s overview.

He says the NDP is premised on Vision 2022 as contained in the National Development Strategy (1997 to 2022), which contains the nation’s desire to be amongst “the top 10 per cent of the medium human development group of countries founded on sustainable economic development, social justice and political stability”.

Financing of the NDP, the minister says, is based on the principle of a balanced budget with the main aim of introducing fiscal discipline and achieving sound macroeconomic management in the medium term.

He says achieving fiscal consolidation in the short term is key in the provision of a supportive environment to clear arrears, unlock the barriers for private sector active participation and development towards the creation of a diversified and resilient economy for sustained higher growth and socioeconomic development.

“Resultantly, financing requirements for the plan programmes will be from a combination of financing sources, which includes domestic revenues, domestic and foreign borrowing which will be subject to the limits of a prudently managed debt strategy. Other sources being explored include PPPs (private public partnerships) with the private sector as the financer of projects.

“Serious engagements with development partners will be pursued to obtain significant fiscal relief through accessing of grants and concessional loans,” Gina points out.

Taxes to be maximised

Basing the cost of the NDP on figures of the 2019/2020 national budget, which stands at an estimated E22 billion, the minister says: “For the plan period 2019/20 – 2021/22, resources from all sources are estimated at E67, 820 million” (E67 billion).

Domestically, this money will come from individual and corporate taxes, VAT payment, as well as enhanced monitoring and enforcement of enhanced fee structures.

The minister says over the next three years of the NDP period, revenue collections through taxes and fees will be enhanced with the transfer of revenue collection offices to the Eswatini Revenue Authority.

“Also, the complete rollout of electronic payment systems, revision of laws and computerisation of collection systems is to be prioritised for the plan period. These measures are necessary for full implementation of the fiscal consolidation strategy and to provide predictability and stability in financing as well as enhancing the credibility of the plan,” Gina says.

The minister is wary that the mobilisation strategies should take cognizance of the fragile economic environment and ensure that revenue measures to be implemented do not dampen further economic activities during the Plan period.

He has given priority to the clearance of arrears to give relief to the private sector and micro, small and medium enterprises (MSMEs), finish infrastructure that is under construction, not start on projects that have not committed any works and defer those that have committed but not started any works.

“This policy stance will affect some big projects that were already under implementation and financed by government funds which are yet to secure any loan or grant funding. Foreign financed projects are given priority, and this is in consideration of the experience in the past couple of years where government faced challenges in meeting its counterpart funding commitments,” Gina says.

cost-cutting measures
Already, as part of its cost-cutting measures, government suspended capital projects and put in place the Cabinet Capital Projects Committee chaired by Minister of Natural Resources and Energy Peter Bhembe, which reviews regular reports from relevant institutions tasked with the development of capital projects and makes recommendations for oversight.
He emphasises that clearing of arrears across all the different sectors remains central to the achievement of the set objectives over the plan period.
He says this will unlock liquidity for the private sector, thereby augmenting economic activity.
“At the same time, expenditure will be directed towards ICT, education, agriculture, health, tourism, water, transport energy and social protection,” the minister says.
Gina states that the NDP integrates the various policy documents that articulate aspirations towards Vision 2022 and further provides an implementation framework and required resource envelope to achieve the goals in the medium term.
He says government recognises that to deliver inclusive and equitable growth outcomes, collective efforts are required from public sector, private sector, civil society and development partners to not only fast-track the stimulation of economic growth, but to also achieve sustainable socioeconomic development.
The minister adds: “To eliminate poverty and reduce inequality, there is need to accelerate economic growth in ways that benefit Swazis, and hence I implore all concerned stakeholders to engage in concerted efforts and commit to participate in the implementation of this plan. I trust our partners to actively participate in mobilising the resources needed for the implementation of the plan.”

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