The coronavirus crisis in Swaziland (eSwatini) is having widespread damaging effects on unemployment and poverty and many jobs might not return, a United Nations Development Programme (UNDP) report fears.
The impact could last for generations.
UNDP looked at the way the coronavirus (COVID-19) lockdown imposed by the Swazi Government in March 2020 had disrupted life throughout the kingdom. Employment has been hit badly and hunger is spreading.
The report stated that in 2016 the national unemployment rate stood at 23 percent and the formal sector employed 3.1 percent and the informal 60.3 per cent with the working-age population consisting of 738,799 people of which 364,630 persons were out of the labour force. Almost 82 percent of employment is in the private sector, which is dominated by small and medium enterprises and factories.
The onset of coronavirus in March 2020 closed factories and other industries, including the service industry such as hotels and catering services. Workers were paid only for the days worked in March 2020, while the state of emergency declared on 17 March 2020 froze all economic activities in a range of sectors. The impact of these measures on people was immediate. The Ministry of Labour subsequently announced that 13 companies had laid off over 8,400 workers and the Minister announced (on 4 May 2020) that 8,429 would be paid salaries for April and May. The companies are mostly in the textile, hotels and catering sectors. They are part of 43 companies that have applied to lay off staff and requested an exemption from provident fund contributions to redirect the money to laid-off staff.
The UNDP report stated, 'People living in or near poverty often lack disposable cash, and so cannot easily stockpile food in times of crisis. Hunger, malnutrition, pneumonia and other forms of health-related shocks and stresses compound vulnerability to the virus and contribute to a vicious cycle of disease and destitution.
'The coronavirus pandemic would increase poverty, inequality and unemployment due to its adverse impact on people's jobs and livelihoods in the economy. The non-provision of health insurance for the poor generally and the majority of the rural dwellers in particular, would exacerbate poverty and inequality.
'Informal economy job losses are bound to happen as the government continues to implement safety control measures, including restricted travel and partial lockdown. The effect of this on the informal sector will be huge as their members are likely to suffer significant losses since their incomes depend on daily labour. This development will further push the poor and the vulnerable to the margins, particularly in urban areas as they live from hand to mouth, with any day lost in trading time impacting directly on the household income. The recovery of this sector may be difficult as they are likely to expend their capital on survival requirements during the lockdown.'
It added, 'A vital segment of the service industry is the tourism industry which employs about 5,000 people, of whom 3,500 work for members of the Hotel and Tourism Association (HOTAS). The industry generates about E1 billion (US$60 million) revenue annually. The closure of this sector because of COVID-19 has had a ripple effect on the cottage industry in handcrafts and artefacts, which relies on tour buses for their income. Such income evaporated overnight when borders were closed to tourists.
'Painting a picture of the sector's losses to the pandemic, The Ministry of Tourism announced an estimated potential loss of E208.8 million out of which E95 million stems from accommodation, E97 million from restaurants, E11 million from the entertainment of tourists, and E62 thousand from transportation between February and July 2020.'
It added, 'The 3,200-strong producers and exporters of homemade products such as handicraft artefacts, jams and natural gourmet foods are just as badly affected. This sector is an important contributor not only to the economy but also to the livelihoods of numerous low-income households in the rural sector. In 2019, this network of artefacts producers generated a turnover of E67 million and was looking to a more productive year in 2020. Unfortunately, their incomes dried up suddenly when the borders were closed.'
The UNDP report stated, 'It has been said that these shocks, sudden as they are, could have long-lasting consequences on human development and can be passed to subsequent generations. Even after an epidemic has ended and economic growth has returned, the impacts of the shock could still leave lasting damage. What is certain, however, is that the effects will be unequally distributed, with vulnerable groups disproportionately affected.'