ǤǤǤ ͷΨ „—•‹‡••‡• ‘– ”‡‰‹•–‡”‡†
MBABANE – Business revenues will continue to decline exponentially in the country, because a majority of businesses operating in the country are not recognised.
Their productivity and growth remains unknown, as they do not have access to the local and international markets.
They are also not regulated which makes it difficult for them receive any assistance from cooperatives and other financial institutions in the country.
Mluleki Dlamini, the Director of Micro Small and Medium Enterprises (MSME) on Wednesday said they were more the 50 000 businesses that were not recognised in the country.
Dlamini was speaking during the capacity building on entrepreneurship development for MSME’s in the country at Sibane Sami Hotel.
Dlamini said out of the 68 000 thousand business in the country, 75 per cent are informal.
An informal business is a business that operates with regulations and uses the black markets as means of trade.
The black market is the illegal business of buying and selling goods in violation of restrictions such as price controls or rationing.
He said 75 per cent businesses are not registered with the Ministry of Commerce or any municipality in the country.
“We have a high number of unregistered businesses which makes them part of the ‘grey economy’ and it affects production in the country,” he said.
Dlamini added that these businesses are not able to received assistance from the government, as well as cooperatives which help them grow.
He mentioned that cooperative do not offer financial assistance to businesses that are not recognised by government and municipalities.
The director said the informal businesses affect the productivity of the formal businesses because they are not regulated.
“They decide what price to sell their products and this affects those that are regulated as they now have to compete with them,” he said.
He further mentioned that informal businesses are not protected and this leads to the failure of most of them.
Dlamini said part of the requirements of a registered business is insurance and this helps them should any disturbance occur.
Unrest
“COVID-19 and the unrest affected a lot of businesses and a majority of formal businesses were able to land on their feet because of insurance,” he added.
He further urged them to register their businesses, as the process now took a day.
Minister of Finance Neal Rijkenberg aforementioned that in 2021 the recovery in the domestic economy was faster than anticipated at 5.9 per cent compared to an earlier projection of 1.4 per cent.
He said this follows a challenging year in 2020, where growth was a negative 1.9 per cent as impacted by slow economic activity and the COVID -19 pandemic. The effect of this has been felt both by the fiscus and the ordinary liSwati.
“In the medium-term, growth is expected to average 2.9 per cent for the local economy with an anticipated growth of 2.4 per cent in 2022,” he said.
Rijkenberg said this projection still has a number of downside risks that are a function of developments in the world economy and our internal challenges, and further may not be sufficient enough to reverse the negative outcomes of the preceding years.
The COVID-19 pandemic coupled with other economic and social disturbances weigh on current and future growth prospects.
“Needless to say, these challenges continue to threaten our ability to maintain our tax revenue mobilisation goals,” said the minister.
He added that domestic revenue collections in 2021/22 were 10 per cent below estimates which was about E1.235 billion. In line with the weaker than expected revenue collection, domestic taxes to GDP ratio has declined by 0.3 percentage points in 2021/22 to reach 14.9 per cent. Tax arrears also increased by 29 per cent to E9.369 billion from E7.262 billion in 2020/21.