MANZINI: Wakhile Matsebula, aneconomist has warned that the country will lose more investors as a result of poor governance and the current debt crisis.
Matsebula said the decision by the Eswatini Government to secure loans might cripple the country in the long run.
“Basically, the citizens of Eswatini will have to pay the debts created by their government and this will be through the increase in taxes” he said
The economist further noted that Eswatini was running on a debt of about 44% of the country’s Gross Domestic Production (GDP.) He said government needs an expansion fiscal policy.
“We need an increase in personal income for the citizens of the country. The salaries are stagnant while prices of basic necessities are rising and this is dangerous for the economy” he said
Matsebula added that with the shortages of essential goods in the country, he foresees a rise in inflation in the near future. He said shortages of basic commodities might force suppliers to charge more and this will not be in the interest of consumers.
“Suppliers will increase prices in order for them to keep their profit margin. Most people then increase their selling prices in order to make the same profit as before but it is a bit early to say the country is at the level of junk status. The biggest problem about public debt is that it undermines Foreign Direct Investments (FDIs).” said Matsebula.
Reached for comments, Siboniso Nkambule, the Principal Secretary in the Ministry of Commerce, Industry and Trade saidgovernment has the capacity to pay for public debt. “We are hoping as a country we will not get to a position where we will entirely not be able to settle our debts. This is the reason Government is working around the clock to revive the economy through the Strategic Roadmap 2019-2022,” said Nkambule.
But Mbongwa Dlamini, the President of the Swaziland National Association of Teachers (SNAT) said government was robbing the citizens.
“The loans applied for will cater for capital projects, which even if they are to generate money it would take about 20 years to repay the loans. In fact government comes back to rob us the little we have. That is why as workers we are now saying we need a government of the people which will serve the interest of the Swazis, not just an individual” said the SNAT boss
Matsapha Industrial Site