Non-dialogue killing business confidence - economist
MBABANE – As it is, business confidence in the Kingdom of Eswatini is very low and that is a cause for concern, according to an economist.
In any economy, confidence levels influence and provide information on social and financial developments in the future.
According to businessstandard. com, for companies and the stock market, business confidence indicates expectations of firms, based upon surveys on production, orders, and finished goods in the sector. The business confidence index can also be used to check growth and anticipate curves in economic activity.
Thembinkosi Dube, a local Economist, said business confidence in the country was at a low because of the continued arson attacks on infrastructure.
Shoot-out
Just yesterday, this publication reported that after a heavy shootout with a group of men, who had kidnapped four truck drivers in two hours and set four trucks alight, the police detained a pair.
The economist said if this anomaly persisted, businesspeople would not expand their businesses because of fear that they might be attacked by the unknown arsonists.
Dube said as it was, Eswatini business confidence was low and it was affecting the economy because there was a big sense of doubt among businesspeople to expand and on top of that, consumers were also sceptical of spending their money but opting to save it in readiness for future occurrences that might need immediate financial aid owing to the current situation.
A consumer confidence indicator provides an indication of future developments of households’ consumption and saving, based upon answers regarding their expected financial situation, their sentiment about the general economic situation, unemployment and capability of savings.
“Business confidence entails that a business person has confidence to invest more and expand looking at the fact that their products have a good market and doing well in sales but if the business confidence is low, there is very little room for growth and expansion informed by the situation on the ground and not knowing what the future holds.”
Transparent
Dube added; “A transparent dialogue will open up more opportunities for growth and it will be a kick-off to resuscitate the economy while also boosting the already low business confidence in the country. It will give both the local and the international business investors the confidence to invest more in the country and expand their businesses while creating more job opportunities and resuscitating the economy,” he said.
Dube also mentioned that if the current situation in the country persisted, there might be a migration of skilled labour to other countries because of job security, which could be informed by retrenchments due to a crippled economy and other factors.
He said a classic example on this regard was Zimbabwe where a great percentage of well-educated and skilled labourers left the country for greener pastures in the early years of the new millennium due to political unrest that was also highlighted by arrests of opposition party members and violence.
An alarming 25 000 Zimbabwean school teachers left the country, unhappy over poor pay and working conditions.
Thousands of skilled workers, including doctors, nurses, engineers and teachers were forced to move abroad by an acute economic recession, critics blame on repression and wrong policies by the late former President of Zimbabwe, Robert Mugabe’s government.
Inflation
“All in all, about three million Zimbabweans or a quarter of the country’s 12 million people live abroad after fleeing home because of political violence and an economic crisis marked by the world’s highest inflation of nearly 8 000 per cent, rising unemployment and food shortages,” read a report from relief web at the time.
Dube said if this could transpire in the country, it could be a drain to government because it would have to pay more for those skills when in actuality they were available in the country.
“There is what we call ‘lesson learned’ and a classic example is Zimbabwe. We have different takes on situations and some people do not like the political unrest and everything that comes with it while others tolerate it for different reasons. Some people will wait for change while others will not want to be involved in all the dirty work. In Zimbabwe, they invested so much in education but these skilled labourers are all over the globe because they didn’t tolerate the situation,” he said.