Mbabane: Good people of Swaziland, it is time for us to brace for disaster. From where we sit, it is obvious that the pillars underlying our economy are crumbling fast. The recent electricity load-shedding is but a portent of the future and an indictment of our lack of development over the past five decades. The truth is that our economy is, and always has been, a hollow shell incapable of sustaining us without outside support – and that support is vanishing fast. We are no longer in the armpit of the largest economy in Africa. Instead, they are withdrawing from the previous intimate and cosy relationship.
And we can't blame them. After all, when the whole world laughed at our attempts to get financial relief without the willingness to change a thing about our overburdened economic system, President Jacob Zuma offered us a chance to take a E2.4 billion loan with the minimum conditions necessary to get his own government to let it through. We never called him back.
SA is no longer willing to provide electricity to a country that refuses to build its own power plant or overlook the free and easy carelessness with which we treat customs declarations and other formalities that are expected of those travelling between nations.
The new South African customs regulations that have been sprung on us (although it's probably a good bet that our government was warned of this long ago) are an indication that the nation we have considered our big brother has finally turned its back on us in disgust and is now pursuing policies that do not give us the special consideration we previously merited.
These new SARS regulations mean businesses will have to pay a South African citizen to be their customs agent.
They mean that the queues at the borders are going to get much, much longer and international trade much, much more expensive. Combined with the effects of introducing VAT and of lowering the duty-free limit to E250 per person, they mean that cross-border traffic is going to become tedious and difficult to the point of tears and will almost completely wipe out the unofficial and barely-legal trade operated by cross-border hawkers. Now consider that our only sources of income are taxes and SACU receipts.
Less cross-border trade means less SACU receipts and lower tax returns from the companies which contribute the bulk of our taxes. If they stick around, that is.
So our revenue stream is drying up at about the same time that our reserves are drawing to an end. We have one and a half month's cover left in our foreign reserves.
That means in one and a half months we will not be able to buy anything from outside the country. Consider that roughly 80 per cent of everything – including staple foods – is imported from South Africa.
Soon, our Rand reserves will become so low that South Africans will have no choice but to drop the Lilangeni-Rand peg lest we drag their economy down, too.
At that point our money will become worthless (because monetary value is based on how much a country exports and, to put it bluntly, we don't produce enough of anything that other people would want to buy).
And everyone (except, apparently, for our government) understands that if you keep spending more than you receive, you end up with nothing.
It is highly likely, therefore, that if something drastic is not done to either cut expenditures or inject new cash into the economy we are going to see a total economic collapse by the end of the year.
Even if we survive the year with the Rand-Lilangeni parity intact, remember that all this economic chaos was caused by a single bad year of SACU receipts – less than E3 billion.
That's about the amount we can regularly expect in SACU receipts for the foreseeable future.
And on top of all this, the region looks set to go through one of the coldest winters in living memory – with electricity load-shedding (and therefore blackouts) becoming a daily part of life.
* Commentary by the Editor, Times of Swaziland.