COVID-19: What Eswatini is doing to support its businesses

The Kingdom of Eswatini is taking bold steps to support its businesses as the country gradually reopens its economy from the COVID-19 lockdown. The government has announced new measures to alleviate the burden on businesses hard hit by the pandemic, including relief of R90 million for small, medium, and micro-enterprises (SMMEs), tax deferments, and waiving penalties on late debt. The Minister of Commerce, Industry, and Trade, Hon. Manqoba Khumalo, shared insights into the current state of the economy and the support being provided to businesses in a recent interview with CNBC Africa. The move comes as the country faces economic challenges exacerbated by its strong ties to South Africa, which is expected to see a significant contraction in its economy. Minister Khumalo highlighted several key initiatives aimed at assisting businesses in Eswatini. Firstly, the government has reduced the discount rate for debt by a hundred basis points and offered payment holidays for businesses with banking relationships. The banking industry has also contributed by providing support in this regard. Additionally, the government has provided tax relief by lifting penalties for late payments and offering provisional tax exemptions for businesses experiencing financial difficulties due to the pandemic. Minister Khumalo emphasized the importance of supporting small businesses, announcing a R90 million fund dedicated to shoring up SMMEs. The fund aims to reimburse businesses for taxes paid in the previous financial year and can be paid in full over a period of four months. Businesses seeking assistance from the fund must demonstrate that they have been adversely affected by COVID-19 and have a track record of tax compliance. The government is also developing strategies to address the needs of informal traders and SMEs that may not have been able to pay taxes. Minister Khumalo noted that discussions with donor partners are ongoing to tailor solutions for these businesses. As Eswatini charts its path towards economic recovery, a task team was appointed to develop a comprehensive recovery plan. The team is expected to outline measures to stimulate economic growth and support businesses as the country navigates the challenges posed by the global pandemic. With close economic ties to South Africa, Eswatini is bracing for a potential 10% drop in GDP as a result of COVID-19. However, the government remains committed to creating an enabling environment for businesses to access funding and bounce back swiftly post-pandemic. While the road ahead may be challenging, Eswatini's proactive measures to support businesses reflect a determination to overcome the economic setbacks caused by the unprecedented health crisis.