Protests cost country over E800m
MBABANE – The country has lost at least over E800 million due to inactivity in commerce from the four days of protests that occurred at different intervals.
This was revealed by renowned Economist and University of Eswatini (UNESWA) Lecturer Sanele Sibiya, who stated that quantifying the effects of the ‘impromptu holidays’was arduous at best and required one to have a huge data set and big data models.
Sibiya narrated that, however, a simple route was to make a naïve assumption that the annual gross domestic product (GDP) of the country was produced in equal proportions per day or per working day. He stated that according to recent data from the World Bank, Eswatini had an annual GDP of US$4.94 billion (E74.1 billion) as of 2021.
Protests
Assuming in a 365-day production year, we have a daily output of E203 million, with a total cost of E812 million over the four days of protests.
GDP is a monetary measure of the market value of all the final goods and services produced and sold in a specific time period by countries.
The four days of protests were on past Tuesday and Wednesday, where public transport workers stopped working in solidarity with those who were in support for the release of the incarcerated Members of Parliament (MPs) Mduduzi Bacede Mabuza and Mthandeni Dube. Last Thursday, Manzini in particular was a standstill, following the protest action by the public transport workers, over the bail of E6 000 imposed by a magistrate to some of their own, who had been arrested. Prior to that, on June 29, there was little to no business activity, as many people stayed home, following calls that those who died on the same day last year should be rembered.
Sibiya also mentioned that the poorest of the poor would get the hardest blow if the threat to continue downing tools by public transport workers is anything to go by. He said well-established or high-end businesses had the capacity to absorb the strokes and shocks of a standstill economy, due to people failing to reach places of employment but people who earned a living through selling in different markets for example, were the most vulnerable, as a loss in one day left a huge financial gap that they may not recover from.
He also stated that those whose salaries were informed by hourly accumulations were also vulnerable, because being away from work for two days meant a huge loss of income that would never be recovered.
Sibiya said in businesses, especially in the towns where the transport was not available; there was a standstill in commerce, which was bad for the businesses as they still had to pay fixed expenses which included rent and lease costs, salaries, utility bills, insurance, and loan repayments, among other things and loss of income presented a burden on them in this regard. He also touched on the cost of providing security at these businesses, which he said was accumulating in such instances and directly contributing to inflation, which was already high.
Understand
“What one should understand is that this is not just a protest, but it’s also an issue of security and we have seen it in the past where people used the opportunity to loot businesses, which is possible under the circumstances,” he said.
The economist shared that it was a good thing that external examinations had been localised, otherwise it would have been a high cost to the scholars if the exams were uniform with other countries and postponing them would have been a huge blow to the country’s education system and it would have been disastrous for the scholars. Meanwhile, vendors shared their frustration of not being able to sell their wares for the past two days. There are those who sell items in bulk and there are those who sell in one unit. The former, on a busy day, make revenue of about E5 000 though they would have to deduct costs. The latter, on a busy day, collect revenue worth E800 and a two-day financial loss amounts to at least E1 600.
Earnings
Through these daily earnings, they contribute to the repurchasing of stock, household commodities for their families, transport, rent, paying school fees and buying school items; like books, uniforms and lunchboxes. The same money also caters for medical needs, clothing and telecommunications services.
As the economist revealed, unlike high earning entities that could absorb a day or two of the shocks, it is a loss that cannot be recovered for them and it leaves a huge financial burden to lose two days of commerce, which caters for the aforementioned items.
One of the vendors at the Mbabane Market, Vami Simelane, said she had to dispose four boxes of plums worth E130 each, three boxes of naartjies worth E100 each, two boxes of beetroot worth E100 each.
Inactivity
This amounted to a loss of E1 020. She sells in bulk and she makes at least E5 000 on a busy day. She stated that she received new stock on Monday, only for some of it to go to waste, never mind that she lost income due to inactivity in commerce. She said they had to pay E198 every month to the municipality, among other expenses, despite that they were not operating for two consecutive days.
Small and medium-sized enterprises (SMEs) or small and medium-sized businesses are those with an annual turnover of E500 000, but it has since been improved to E1.5 million in the recently adopted Income Tax Amendment Bill, 2022.
They include hair and beauty salons, bars, cafes, restaurants and general dealers, online retailers and gyms. The public transport operators are also categorised under this business umbrella.
The SMEs are the backbone of Eswatini’s economy, employing 70 per cent of the country’s workforce. A great percentage of the owners rely on the business as the only source of personal income.
While recovering from the COVID-19 shocks that saw many of these outlets shut down, the political instability comes with such threats, as looting and financial loss which can result in these businesses closing down, as revealed by Sibiya.
“That automatically means job losses and a challenge in alleviation of poverty as some of the workers have multiple dependants. The economy is also crippled because government’s revenue in the form of tax declines,” Sibiya said.
Interviewed on this, a general dealer owner on the outskirts of Mbabane said he made at least E6 000 on a busy day but because he had to close for two consecutive days, he was already counting losses.
Companies
For high earning companies which include real estates, hospitality industry like hotels and wholesalers, according to the economist, could withstand the shocks of the stay-away influenced by political instability, at least for two days.
However, due to the situation, they incurred costs, such as provision of security because they now have to guarantee security to any possible threat.
For example, a company that previously had one security guard will now have at least three, according to an executive manager in one of the big companies in town.
Another added that cost came in the form of alternative transport to get employees to work as that entailed hiring a private transport for them in the absence of public transport or having to purchase fuel and extra hours for a driver of the company if the vehicle was provided in-house.
Meanwhile, the Principal Secretary in the Ministry of Education and Training, Bhekithemba Gama said the postponement of the final examinations for sitting classes also came with costs as the logistics were at a very advanced stage.
“It may not be financial costs but the fact that the pupils had over time been preparing for this, means they have to prepare once again for the day it has been postponed to, which is psychologically demanding,” he said.