PUBLIC DOUBTS ECONOMIC GROWTH

MBABANE – The public is sceptical of the financial growth reported by government. A financial crisis and cash-flow challenges were all that government had been singing for the past two years. 

However, last Wednesday during a breakfast meeting with editors, the Prime Minister, Ambrose Mandvulo Dlamini, said the country had in the first six months in office, achieved a six per cent growth in the economy. This growth, according to Dlamini, was based on a year-on-year comparison of the second quarter gross domestic product (GDP) for 2019.

According to the premier, the success in containing government’s expenditure patterns came from the administration’s policy stance, which over the past 12 months had been premised on fiscal consolidation. This, he said, also informed the formulation of the 2019/20 budget. To this, Mduduzi Gina, Secretary General of the Trade Union Congress of Swaziland (TUCOSWA) cast doubt as he wondered what exactly led to the growth.

Demand

He said if the economy was growing, there would be jobs brought about by the demand. Instead, he noted that government was accumulating debt through endless loans. “This growth they are referring to is probably from the endless taxes being implemented.” He said they had established that government was now demanding that entrepreneurs should settle all their tax obligations.

This, he said, was through desktop taxation. “The businesses that are pumping in the money are no longer making any profits. They are going to close down as they have to settle all their pay-as-you-earn (PAYE) and value-added-tax (VAT) obligations,” Gina said.

He wondered what would happen to those who owed substantial amounts. On the other hand, he said, they believed if there was growth, it would translate to tangible things not just political statements. “We are keen to see the change and development that would develop the man on the streets. For example, construction workers were retrenched on some of the infrastructural projects they were employed in; so if the economy improves, we’d expect them to be re-engaged.”

Meanwhile, Economist Bhekabantu Ngcobo, said any economy facing economic turmoil was not conducive to fiscal growth since it had very little trust in the financial system. He said when such happened; people were also unwilling to invest.  Ngcobo said for such to happen, government needed to think about trade policies with foreign countries, regulation on natural resources available and other raw materials.

The economist said the quickest way to rejuvenate the economy was through the administrationincreasing its spending.
Ngcobo said for government to achieve economic growth, it had to keep the economic equality in check, which is a pillar the Minister of Finance, Neal Rijkenberg, reflected during his maiden budget speech in February.

He said: “Great disparity among  masses may lead to a certain amount of unrest in the economy. This disparity causes a certain amount of imbalances in goods and capital market. Hence, government needs to provide schemes and policies via taxes or social spending to keep inequality in check.” Ngcobo said the growth from government could have been from the austerity measures it implemented.

Post your comment

Your name:

Your e-mail address:

Add your comments:

Please enter the code you see in the image:

Image:

Code: