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Reconstruction Fund to Catalyse Economy's Fiscal Space (Economic Counsellor Office in Eswatini)
Kind: Rep office reports  Organization: Department of International Cooperation  Publish Date: 2021-09-09 15:34
Reconstruction Fund to Catalyse Economy's Fiscal Space

BY Ashmond Nzima

MBABANE – SARFED has given the Reconstruction Fund the thumbs up, saying it is a proactive measure towards the stabilisation of the economy.

Two days ago, His Majesty King Mswati III officially launched the Reconstruction Fund with contributions amounting to approximately E1 billion. The fund is an intervention aimed at supporting all those who were affected during the civil unrest in June this year. The Southern African Research Foundation for Economic Development (SARFED), said through the injection of Reconstruction Fund into the economy; there were good results expected to take place both in short, medium and long-term basis. These include increase in the investor confidence. “Government’s initiative for urgent response towards rebuilding of the economy through the Reconstruction Fund will serve as a springboard for investor confidence. The country has also a competitive agro-industrial sector which is also supported by strategic support structure. This resulted in the country’s capacity to have a global supply in the same industry to other markets such as European, United States of America and the United Kingdom retailers through the fruit cannery industrial sector,” said SARFED Regional Coordinator George Choongwa. SARFED further foresees an increase in revenue collection.

“This would mean that the reinstated institutions or businesses through the fund will be able to revamp their operations and productivity at the same time of which the result would bring about increased national revenue through tax and other indirect means such income tax through the increase of employee disposable income.

Improvement

The ultimate benefit of improving the national revenue pool would then result in to the country’s improvement in the Gross Domestic Product (GDP) as well as regaining the ability to meet its Sustainable Development Goals,” said SARFED. Another benefit, according to SARFED, would be an improved circular flow of income.

Reinstated

“We also expect the stabilisation of the labour force as reinstated companies will be able to reengage masses of employees for productivity purposes. This would then bring about improved circular flow of income as both household and industry will operate in a more optimum manner. Some of the urgent benefits to this development would then be that of inflation control within a signal digit,” said Choongwa. Reinstating the economy, according to SARFED, would also imply the improvement of the supply chain among businesses in the country. This would mean that the benefit would be both direct and indirect within the business ecosystem. SARFED urges government to ensure that companies that benefitted from the fund help the society as well. for government’s application of strict monitoring and evaluation measures. The foundation further calls for strengthening of diversification through economic management. “With the reconstruction fund in place, the government could take this initiative of moving from a public investment-led growth model to a private investment-led one as a priority,” stressed Choongwa. SARFED feels the fund would serve as a form of diversifying revenue sources and increasing domestic revenue mobilisation.
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