Final Report ASSESSMENT OF THE IMPACT OF THE CORONAVIRUS (COVID-19) ON THE ECONOMY AND LABOUR MARKET IN ESWATINI For BUSINESS ESWATINI June 2020 Compiled by Siphephelo Mabundza COVID-19 Impact Assessment Report in Eswatini (2020) 1 Table of Contents Acronyms ............................................................................................................................................... 5 Foreword ................................................................................................................................................ 6 Executive Summary .............................................................................. Error! Bookmark not defined. 1.0 Background..................................................................................................................................... 9 1.1 The Evolution of Eswatini Government COVID-19 Pandemic Response ....................... 12 2.0 Survey Objectives ........................................................................................................................ 15 2.1 Specific Objectives .................................................................................................................. 15 3.0 Methodology ................................................................................................................................. 16 3.1 Sampling Frame ....................................................................................................................... 16 3.2 Sample Size ............................................................................................................................. 16 3.2 Data collection methods ......................................................................................................... 16 3.3 Data Collection ......................................................................................................................... 17 3.4 Data Analysis ........................................................................................................................... 17 3.5 Limitations ................................................................................................................................. 17 4.0 Summary of Findings .................................................................................................................. 18 4.1 Demographics .......................................................................................................................... 18 4.1.1 Enterprise Membership ................................................................................................... 18 4.1.2 Year Business Enterprise was established .................................................................. 18 4.1.3 Type of Ownership ........................................................................................................... 19 4.1.4 Staffing ............................................................................................................................... 19 4.1.5 Current Business Operation Status ............................................................................... 20 4.2 The Effects of COVID-19 on the Economy and the Labour Market ................................. 21 4.2.1 Staff Retrenchments ........................................................................................................ 21 4.2.2 Planned Dismissals .......................................................................................................... 22 4.3 The Social Fall-Out of the Pandemic in Eswatini ................................................................ 23 4.3.1 Social Fall-out at Business Level ................................................................................... 24 4.3.2 Social Fall-out at Individual Level .................................................................................. 24 4.3.3 Economic Fall-out at Business Level ............................................................................ 24 4.3.4 Economic Fall-out at Individual Level ............................................................................ 25 4.3.5 Supply Chain Challenges ................................................................................................ 25 4.3.6 Access to Insurance Cover ................................................................................................. 26 4.3.7 The Financial Impact on Businesses ................................................................................ 29 4.3.8 Amount of time Needed to Restore Operations Fully ..................................................... 30 COVID-19 Impact Assessment Report in Eswatini (2020) 2 4.3.9 Access to Funding from Internal and External Sources ................................................. 30 4.4 Effects on Revenue and Market Share ................................................................................ 31 4.5 Bottlenecks that need to be removed ................................................................................... 31 4.6 Potential Loss of Revenue for BE and FESBC resulting from the Pandemic ................ 32 5.0 Conclusion .................................................................................................................................... 33 6.0 Recommendations ....................................................................................................................... 35 Bibliography .......................................................................................................................................... 38 Annexure ............................................................................................................................................. 40 COVID-19 Impact Assessment Report in Eswatini (2020) 3 List of Tables Table 1: Sampling Size for each Federation Participating in the Survey .................................. 16 Table 2: Operation Status by Type of Ownership ................................................................................. 21 Table 3: Operation Status and Staff Lay-Offs due to COVID-19 ............................................................ 21 Table 4: Planned and Current Retrenchments due to COVID-19 ......................................................... 23 Table 5: Business Continuity Plans: ....................................................................................................... 25 Table 6: Sector of Operation and Level of Insurance Cover before the Pandemic .............................. 27 Table 7: Type of Insurance Cover taken by Enterprises before the Pandemic ..................................... 28 Table 8: Level of Financial Impact Disaggregated by Sector ................................................................. 30 Table 9: List of sampled businesses from FESBC ........................................................................ 40 List of Figures Figure 1: Eswatini Gross Domestic Product (2010-2020) ..................................................................... 10 Figure 2: Eswatini Unemployment Rate (2010-2019) ........................................................................... 11 Figure 3: Sources of Finance for Eswatini Government Budget ........................................................... 12 Figure 4: Confirmed COVID-19 Positive Cases in Eswatini .................................................................... 13 Figure 5: Business Affiliation ................................................................................................................. 18 Figure 6: Business Establishment Profile .............................................................................................. 18 Figure 7: Type of Business Ownership .................................................................................................. 19 Figure 8: Labour Force Rate before COVID-19 ...................................................................................... 20 Figure 9: Business Operation Status since the pandemic began .......................................................... 20 Figure 10: Proportion of Laid-Off Workers ........................................................................................... 21 Figure 11: Staff Lay-Offs by Years of Establishment (n=65) .................................................................. 22 Figure 12: Planned Retrenchments by Year of Establishment.............................................................. 23 Figure 13: Access to Insurance Cover before the Pandemic ................................................................ 26 Figure 14: Estimated Financial Impact to Operations ........................................................................... 29 Figure 15: Effect on Revenue and Market Share .................................................................................. 31 COVID-19 Impact Assessment Report in Eswatini (2020) 4 Acronyms AfDB African Development Bank BE Business Eswatini ERA Eswatini Revenue Authority ESERPAC Eswatini Economic Policy Analysis and Research Centre ESSCOM Eswatini Communications Commission FAO Food and Agriculture Organization FESBC Federation of Eswatini Business Community GBV Gender-based Violence GDP Gross Domestic Product ILO International Labour Organisation MoH Ministry of Health and Social Welfare NCP Neighbourhood Care Point NDMA National Disaster Management Agency PPE Personal Protective Equipment QR code Quick Response Code SACU Southern African Customs Union SPSS Statistical Packages