Economist unpacks King’s 5% growth target
MBABANE – “Let us spring to action and target at attaining above 5 per cent economic growth whilst tackling the pressing issues of poverty, unemployment and service delivery.”
The aforementioned was His Majesty King Mswati III’s call on improving the economy of the country, going forward. The King said initial projections indicated that 2024 was expected to be equally promising, with a forecasted growth rate of 4.9 per cent. He said the country had also experienced a decrease in the fiscal deficit, from about 4.5 per cent in 2021/22 to 1.6 per cent of gross domestic product (GDP) in 2023/24. “This positive change can be attributed to the adoption and implementation of the fiscal adjustment plan (FAP),” he said.
Budget
The King added that the national budget was set to receive a boost from taxes collected from internal and external revenue sources. He also mentioned that the kingdom was making progress with the national trade facilitation programme, but for urged urgent attention towards decreasing border congestion and alternative ports of entry to lessen global supply chain risks.
An economist has reacted to this target and what it would mean to reach the 5 per cent economic growth. The economist said when delivering the Speech from the Throne last week, the King proclaimed a rebound which meant improved economic activity. The economist stated that at 5 per cent growth, businesses could expect more profits and citizens would expect relief from inflationary pressures caused by the geopolitical tensions and COVID-19. She said as such, citizens could expect an improved standard of living in 2024. “We can expect increased investments, which will create more employment opportunities, thereby, addressing the high levels of unemployment the country is currently battling with,” she said.
Systems
On the national budget boost from the increased Southern African Customs Union (SACU) reciepts and domestic taxes as a result of improved demand for local goods in external markets and improved tax collections systems, the economist said this boost meant that government would be able to contain the high public debt to sustainable levels, while providing quality services to the people. She said citizens can expect improved service delivery in critical sectors, such as health and education. She stated that expansionary fiscal policy increases aggregate demand, which means businesses can enjoy greater demand for their goods and services. On trade agreements, the economist said government needed to undertake more awareness and outreach programmes to exporters and potential exporters to enable the private sector to fully take advantage of the various trade agreements Eswatini was a signatory to. She said another aspect was to focus on goods to which Eswatini had a comparative advantage. She said this meant business developers should look into improving the competitiveness of local companies and support creation of value chains to create employment and stimulate growth.