Mbabane: Even though health experts strongly advise the avoidance of alcohol altogether amid the outbreak of the deadly coronavirus because it weakens the immune system and reduces the stability to cope with infectious diseases, hence its ban by many countries, Independent News has learnt that about 42 000 had been hurled to poverty in Eswatini.
This number include those who were working in the liquor shops (bottle stores, bars and wholesalers) and their dependents. Independent News have it in good authority that there are about 1000 liquor shops in the country. It was also established that the least number of people employed by each outlet ranges from three – five.
Notably, liquor shops operated by the big chain stores (Pick n Pay, Shoprite, Spar and Ok Foods) employ more than five people. Therefore, when using the number least employable number of three people per outlet, it gives 3 000 employees who are presumably supporting about seven dependents, according to the Ministry of Economic Planning and Development Census Report of 2017. Simply put, one working individual is probably supporting seven people and if these statics is anything to go by, the affected people are about 21 000 when multiplying 3 000 employees by seven dependents.
Eswatini Beverages Head of Legal and Corporate Affairs Mpumelelo Makhubu confirmed the number of liquor outlets in Eswatini, adding that almost all of them are their customers, but could not approve the number of the employed people.
A research conducted by Independent News laid bare that most of the people working in liquor shops comprise of cashiers and shop assistants. According to the Legal Notice No. 194 of 2005, The Regulation of Wages (retail, hairdressing, wholesale and distributive trades), a cashier working in the urban areas should be paid E1 164.00 and those in other areas should be salaried at E919.00, making the average payment to be E1 041.00. Shop assistants are supposed to be remunerated at E 1021.00 in urban areas and at E866.00 in other areas and that gives an average pay of E943.50 per month. Mathematically, the average pay for people working in liquor shops is E992.50 per month.
Given these statistics, the about 3 000 employees presumably employed in the 1000 liquor outlets are losing E2 977 500 (E2.9 million) per month. Arguably, this money is no longer circulating in the economy and government is losing money she should be collecting only through Value Added Tax (VAT) because people working in liquor shops are exempted from remitting Pay-As-You-Earn (PAYE).
Debatably, government is losing E446 625.00 per month it should be collecting as VAT when the aforesaid number of people buy basic commodities like food.
Other than VAT, government will see its Southern African Customs Union (SACU) receipts taking a nosedive more so because it is no longer collecting excise and additional duties leviable or collected on alcohol produced in the Common Customs Area (South Africa, Botswana, Namibia and Lesotho). These duties collected in the SACU Common Customs Area are paid into the Common Revenue Pool and shared among member states. It is distributed on the basis of each country’s share of total SACU gross domestic product (GDP), a proxy for the value of excisable goods consumed.
Again, as the alcohol ban is still in force, commentators have observed that companies, more especially Eswatini Electricity Company (EEC) and Eswatini Water Services Corporation (EWSC) are dealt a huge blow because Eswatini Beverages was banned from producing alcohol and it automatically stopped using the utilities provided by the two national companies.
Given the fact that alcohol production and distribution is a value chain, there are other sectors which had not been spared from the alcohol production ban. Those sectors include but not limited to the transport (trucks which were distributing alcohol from South Africa and to the local outlets, spare shops from which Eswatini Beverages was buying spares for servicing the spare shops and fuel retailers).
Smuggling of beer.
An independent analyst who preferred to comment on condition of anonymity pointed to the fact that the ban had also triggered smuggling and illicit trade as people started importing alcohol from Mozambique. “As South Africa has lifted the ban on the selling of alcohol, we are yet to see more smuggling of beer from that side and government would be losing taxes which could be channeled to the SACU pool and that will subsequently result in the country losing billions of Emalangeni,” the commentator said.
Minister of Commerce Industry and Trade Manqoba Khumal last week reminded emaSwati that alcohol in the kingdom remain prohibited.
The minister made this announcement through a press statement released on Sunday after realising that there was consignment of alcohol that was imported into the country.
Khumalo reminded liquor suppliers that the manufacturing, distribution and wholesaling of alcohol remain banned. He went on to say that the ministry is investigating how the liquor was imported into the country in defiance of the lockdown regulations, adding that government has already engaged customs officials to be on the lookout for such illegality.
Furthermore, the minister said security personnel will be deployed to make sure that the consignment received by the liquor shops will not be sold.
Khumalo said if anyone is found to be on the wrong side of the COVID-19 regulations, he would be in for it.
Reports started emerging on Thursday that some liquor outlets in the country, precisely Tops operated by Spar, were receiving stock imported from South Africa.
A fortnight ago, Khumalo told Independent News that “as we ease the lockdown, we will eventually get to the stage where the alcohol industry can start manufacturing again.” Khumalo was responding to questions from this publication about what government was doing to ensure that it prevents the pouring of perished stock down the drain by Eswatini Beverages and other wholesalers. The minister said government was regularly engaging with the management of Eswatini Beverages, adding that they are committed to support the fight against COVID-19 by abiding by government decisions.
“Between now and then, we will encourage them to continue talking to us about practical challenges they encounter so we look for solutions together,” the minister said.
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