What really are we doing?
Irecall in 2010/11, the issue of cash flow problems within the government machinery became apparent, the whole nation was forced into austerity mode, termed belt tightening. What I find bemusing is the fact that we seem to be doing nothing to change the situation, or let me say what we are doing seems not to be having the desired impacts that we would all hope for. It would seem we become relaxed when a transient revenue windfall gives us a pseudo improvement in our cash flow position. We tend to mistake the transient for the permanent and that is a major cause for concern.
The curse of small economies
Empirical evidence show that small countries or small economies tend to suffer the curse of a blotted civil service. This is also coupled with the demands on the government to provide adequate public infrastructure and ensure adequate social safety nets. The bloated civil service becomes one of the most difficult things for all small countries to deal with, since they do not usually have big enough resources to benefit from economies of scale and remain competitive in the global market.
Furthermore, the small size of the domestic economy does not attract large companies that will produce to supply the domestic market, there exists no scope for agglomeration economies of scale.
Conurbation is absent and hence there is no scope to grow the economy using the local population. This usually results in a lackluster private sector, without the capacity to absorb jobs that will be lost from the public sector, hence if one follow’s the public sector downsizing exercises of the Solomon Islands and other small countries, it becomes apparent that we can downsize, but just for a short period of time because the problem of unemployment then sets in. The question, therefore, is how does a country overcome the curse of small economies and develop a vibrant private sector that will create the jobs her people need?
Packaging the country as a trade hub
One route out of the curse of the small country is to package the country as a trade hub. We need to thrive to ensure that Eswatini is seen as a country that is friendly to capital, a country that takes care of capital. This we can achieve through improving our business environment and the establishment of the export processing zones, reducing our corporate tax, and improving access into the country through having the right road, rail and air infrastructure. We are strategically located within SACU, right there with Africa’s second biggest economy, we are in SADC and we are beneficiaries of AGOA, to mention a few.
We need to package the country as an integral component of a bigger global community. We cannot achieve internal conurbation, but we are an integrated part of the global metropolis. We need to ensure that we are packaging the country a strategic supply node and a strategic place to have your capital rest in.
Draining the swamp
We need to drain the swamp, and we need to be serious about it. We do not need to talk about identifying ghost employees only to please the IMF when we need them to loan us some money. It is paramount that we understand that it is crucial for us as a nation and for our survival to close all revenue leakages so we attain efficiencies. We cannot have untouchables when it comes to issues of the national purse, I shuttered when I read that the PAC was told that some people are untouchable. We need to go after the ghost employees, improve efficiency and accountability in our bidding systems, recover monies that leaked out of the public purse. We need to root out corruption in any form from our government machinery, that way we will achieve magnitude cost savings and our public purse will go a long way.
Internal efficiencies
The government machinery needs to operate efficiently if the economy is to survive. Currently, we are having a lot of ministries than we need honestly, we need to consider margining the ministries, for example, finance can be merged with the economic planning ministry. The Ministry of Housing and Urban Development can merge with the ministry of Tinkhundla to mention but a few. We can also merge a number of parastals and that will reduce the subvention claims from the public purse. If we can find these efficiencies and be consistent about them, we can make marked savings. Paying one minister instead of two ministers saves a lot of money which we can get by firing 300 cleaners for example. If we want to save costs, we need to go where the money is and not where the numbers are, that will be more impactful than what we are currently doing.
A working model
It is imperative that we commit to establishing an efficient working model if we are to stabilise the economy. We cannot continue this way, it is not sustainable. We need not renege when the cash flow improves temporarily.