Mbabane: The Southern African Research Foundation for Economic Development (SARFED) has observed that the year 2021 is expected to be a grey area for economic recovery, and rationing should be considered the best option for now.
In its weekly paper, the economic and business commentary Economic & Business Commentary, Vol. 5, issue, 1, January, 2021, SARFED the year 2021 is expected to serve as a pivotal year of slightly economic growth between 0.1 and 1 percent of the economic Gross Domestic Product for Eswatini. However, Eswatini’s economic recovery is expected to be fragmented with less improvement at micro level where the majority of Small and Medium Enterprises (SMEs) existed.
SARFED said there would be a number of implications of the second wave on economic performance, considering the fragility of the economy of Eswatini at the monument of which economic growth is expected to slide deeper to about negative six percent (-6%), declaring another total lockdown would worsen the current state of the economy.
SARFED notes that if the second wave forces government to go into another lockdown, it will broaden levels of unemployment. “We should expect an increase in massive job loss on both the industrial sector and microeconomic sector which also composed of the huge percentage of self-employed especially the cross border traders who were already faced with the challenge of closed border gates”.
Lock down according to SARFED will also create inflation. “We also see the increase in inflation levels this year especially if government will declare the lockdown due to the second wave crisis”. The challenge is that the consumer buying power keeps reducing due to constant loss of income in both formal and informal sectors.
It also notes that due to the fractured socioeconomic integration in the country as it might be induced of social unrest the country should expect to see more social unrest in all social strata. Social violence such as domestic violence and crime are expected due to human frustrations that might have been caused by lock down.
The fast spread of COVID-19 in Eswatini in the second wave brings very little to be desired and expected this year. Like many other countries on the face of Africa, the numbers of new COVID-19 infections keep rising probably starting from November in 2020. The report of the World Health Organization (WHO) estimate that only 10 countries out of 54 had engaged in massive testing of which about 70 percent of the results indicated positive COVID-19 results. These countries include South Africa, Morocco, Ethiopia, Egypt, Kenya, Nigeria, Cameroon, Rwanda, Uganda and Ghana.