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Here’s how the unrest in eSwatini could negatively impact the Sadc region
It’s been a week since protests exploded in the small kingdom of eSwatini as citizens demanded greater freedoms. eSwatini is Africa last absolute monarchy. The army was deployed this week to quell the protests against King Mswati the third's iron grip. With many fleeing the kingdom, what are the implications on the economy of eSwatini and its Southern African neighbors? Menzi Ndhlovu, Senior Analyst at Signal Risk joins CNBC Africa for more.
Fri, 02 Jul 2021 11:23:41 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The political implications of the unrest in eSwatini are not expected to significantly impact the SADC region, but there is a possibility of SADC intervention to navigate towards a political resolution.
- The economic consequences of the unrest in eSwatini are more pronounced, especially for industries in South Africa that rely on eSwatini's contributions like timber, sugar, and textiles.
- The debate over eSwatini's absolute monarchy system highlights the need for political reform to address high levels of poverty, unemployment, and lack of economic opportunities for the population.
Protests recently erupted in eSwatini, Africa's last absolute monarchy, as citizens demanded greater freedoms. The unrest has prompted the deployment of the army to quell the protests against King Mswati III's tight grip on power. With many fleeing the kingdom, there are concerns about the potential implications on the economy of eSwatini and its Southern African neighbors. Menzi Ndhlovu, Senior Analyst at Signal Risk, sheds light on the wider ramifications of the situation for the Southern African Development Community (SADC) region.
From a political perspective, eSwatini's relatively small size and limited political reach are not expected to have significant implications for the region. However, there is a likelihood of SADC intervention to steer stakeholders towards a political solution. Economically, eSwatini plays a crucial role in the Southern African economy, particularly for South Africa. The country is a significant contributor of vital inputs like timber, sugar, and textiles. There are concerns that if the unrest persists, it could adversely impact industries in South Africa such as food and beverages, textiles, and furniture manufacturing. South Africa has a keen interest in resolving the situation swiftly to safeguard its economic interests.
The debate around eSwatini's absolute monarchy system raises questions about its relevance in the modern world. The current system is not working for the majority of the population, with high levels of poverty and unemployment prevalent in the country. Calls for political transition towards greater political liberty and dilution of the monarchy's influence are gaining momentum. While some advocate for a constitutional monarchy akin to Lesotho, others demand a complete abandonment of the monarchic system. The intervention of SADC, the African Union, and the international community is likely to focus on addressing demands for more democratic governance.
The corporate sector has already felt the effects of the unrest, with companies like SAA and MTN experiencing disruptions to their operations in eSwatini. This unrest has increased the political and insecurity risk premium associated with doing business in Africa. Prior to the protests, eSwatini was viewed as a relatively stable environment for investment. However, the current situation has led to a reconsideration of business activities in the country, with some companies choosing to withdraw until there is clarity on the political future of eSwatini. This uncertainty poses challenges for eSwatini's economy, which relies on sustained economic activity for growth and development.
In conclusion, the unrest in eSwatini has reverberations not only within the country but also across the SADC region. The need for a swift resolution to the political crisis is paramount to restore stability and economic prosperity. The international community's engagement and the pressure for democratic reforms may shape the future trajectory of eSwatini and its impact on neighboring economies.
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