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By Sifiso Nhlabatsi | 2022-09-12
The private sector is not creating enough jobs to reduce unemployment and poverty, especially for women and the youth.
This is according to International Finance Corporation (IFC) Economist Zivanemoyo Chinzara, who was speaking during the launch of the Country Private Sector Diagnostic (CPSD) report by World Bank and IFC.
Chinzara said the private sector reflected a dual structure with a few large firms and state owned enterprises (SOEs), and a majority of low productivity informal firms.
He said there was a falling aggregate firm productivity between 2007 to 2016, except for manufacturing firms.
The economist said there was weak job creation as the formal sector only created about 1 000 jobs per year, yet young labour force was growing by 25 000.
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He said informality dominates the labour market, accounting for 61.9 per cent of the total employment.
“MSMEs represent 40 per cent of employment, but are mostly in low productivity and earning activities. Women are more likely to own micro enterprises.
Reverse the fall in investment and productivity, reignite inclusive growth and job creation within a constrained fiscal space, and domestic and regional uncertainty for investors,” the economist stated.
Minister of Commerce Industry and Trade Manqoba Khumalo said Eswatini can harness the power of the private sector to stimulate a more resilient, greener and sustainable growth model, by attracting investments in renewable energies.
The Eswatini Country Private Sector Diagnostic report highlighted reforms needed to increase Eswatini's competitiveness to unlock export potential and increase the private sector participation to sustainably grow its economy.
The CPSD report suggested strengthening the trade and regulatory environment and reducing the state footprint in sectors that can be better served by the private sector.
It also encouraged private participation in key enabling sectors like telecommunications and energy.
Another recommendation made by the economist was that there was a need to host private sector forums to understand bottlenecks to supply chain investments.
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