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FESBC warns of an imminent recession

By Phephile Motau

The Federation of Eswatini Business Community (FESBC) believes that a recession is imminent in the country. This was said by the Head of Business Transformation Mavela Sigwane.

He said as members of the major players in the business space had serious challenges ahead as an eminent economic recession is on its way based on several factors. Sigwane said one was a recent increase in the interest rate of 6.6 per cent.

He said another factor was the proposed 21 per cent electricity hike.

“The fact that we are on a democratic revolution in a time when we are due for elections next year means government spending is going to be reduced drastically as everyone will be careful on what he or she commits the government to before exiting of office as those suppliers of government may not be paid until 2024. This is reality hitting us as members,” Sigwane said.

He said fuel prices also increased significantly while food prices soared. Sigwane added that another factor was the continuous stop-and-start breaks due to political unrest which has already affected businesses a great deal.

He said it was time they considered stopping paying taxes as businesses until a political response is made to the political question affecting their businesses. Sigwane also suggested a few solutions and stated strategies they were undertaking to counter the impending crisis. He said the recently signed tax deal of 20 years needed careful implementation to ensure full benefits were enjoyed by businesses.

He added that the Rwanda Business Federation memorandum of understanding (MoU) with FESBC needed to be progressed to signature to ensure strong bilateral relationships

“The ITC Business relationship with the European Union (EU) delegation has significant benefits which we need to explore for our members and the State of Business Relations (SBR) forum established through the assistance of EU and ITC need to be pursued to the benefit of Ease of Doing Business by our local businesses,” Sigwane said.

He said there would also be an establishment of the FESBC Finance wing to assist businesses with quick short to medium loans which should be able to cover loans from as little as E20 000 to E5m as per their strategy.

Sigwane said he acknowledged the massive work that lies ahead of them in both the short and medium terms.

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