By 
The Government of Eswatini’s vision is “to attain first world status by year 2022” – with an actionable mission “to establish a policy framework that will ensure sustainable economic development, financial stability & growth, improving the quality of life of Emaswati”. Eswatini’s economic landscape has been facing some turbulence since 2013 – with the GDP declining from 4.3 percent in 2013 to about 0.3 percent in 2017. A climate-change induced drought and a sharp decline in the Southern African Customs Union (SACU) receipts accounted for substantial parts of this deterioration. The country’s thematic focus is towards an economic recovery trajectory anchored on the principles of good governance and focused on attaining fiscal consolidation, inclusive and sustainable growth and an environment for a vibrant private sector.
The decline in agricultural production accompanied by sharp increases in headline inflation had severe impact on welfare and living conditions of her people. The need to cushion this impact through expansion of public expenditure in the context of declines in SACU revenues, widened deficit to about 12.4 percent of GDP in 2018. This development led to accumulation of domestic debt, current account deterioration, an international reserve coverage that was below 3 months of imports and a rising non-performing loans in the banking sector. On the social side, the national unemployment rate stands at 25.3 percent, while the youth unemployment rate is 52.8 percent.
The COVID-19 pandemic, index case confirmed on 14 March 2020, met Eswatini in a fragile situation, with growth subdued to an average annual rates of 1.7 per cent during 2014-19 period as a result of mounting fiscal challenges, difficult external environment and the impact of the 2015/16 drought. Due to the pandemic, the economy contracted by 8.2 per cent on a year-on-year in the second quarter of 2020 , with severe effects in the secondary sector that contracted by 24.5 per cent and inflation rate at 4.65 % signaling a technical recession for the economy. Total debt stock stood at E26.2 billion as at end September 2020, representing 41.5% of GDP. Fiscal deficit widened to 8.9 per cent of GDP as Government prioritized saving lives by virement of the national budget towards health expenditures amid declining revenues led by heavy reduction in SACU revenues.
Despite some of the residual challenges outlined in the above, Eswatini is awash with strategic opportunities – or levers of resilience which can be leveraged effectively as a foundation for economic turn-around. The Government of Eswatini has taken significant policy steps to respond to some of the challenges identified and unlock some strategic opportunities. This includes putting in place the country’s National Development Plan (NDP) as well as a Strategic Road Map (SRM) and most recently the Post COVID-19 Economic Recovery Strategy.
Private sector is recognized as a key partner to the achievement of the universally adopted Sustainable Development Goals (SDGs) and the government has been deliberate and intentional in ensuring that Private sector plays a pivotal role in the development of the country. The role of the private sector cannot be underscored, it plays an important role as an engine of economic growth and job creation; It provides goods and services; generates tax revenues to finance essential social and economic infrastructure; develops new and innovative solutions that help tackle development challenges and it is a central actor in addressing climate change. However, Eswatini’s private sector is relatively small and dominated by micro-enterprises. A survey by FinScope in 2017 estimated the number of MSMEs at close to 70,000, employing over 90,000 people, or about 21% of the workforce. No reliable data on the MSME sector’s contribution to GDP is available; however, this figure is not expected to be too far below the 50%. The survey also estimated a total of 59 283 business owners employing approximately 93 000 people. However, only 8% of total MSMEs are small and medium enterprises. The majority of enterprises are micro businesses and individual entrepreneurs. High impact enterprises account for only 4% of SMEs, with low impact SMEs accounting for 79%. The bulk of them prevail in low value-addition activities in the wholesale and agriculture sectors. Significantly, 75% of the MSMEs operate without a business license — therefore, in the informal sector.
To this end, the government recognizes in various planning instruments the central role of the private sector and in particular the MSME sector. The Government launched Post Covid-19 Economic Recovery Plan under the theme of ‘Carving the path to a private sector-led economy’ to affirm the central role of the private sector in the recovery process. The government views in the Recovery Plan the needs to be a shift away from Government as the central driver of the economy. Further to that, the Government confirms that it needs to re-establish itself as the key enabler of growth across all sectors of the economy. In enabling the private sector, the GoE will focus on creating a conducive business environment that will improve the country’s ranking on the Ease of Doing Business.
Rationale:
UNDP’s vision on private sector development is anchored on making markets work for the SDGs with an emphasis on inclusion of poor and marginalized communities, in partnership with governments, civil society and businesses. UNDP’s vision seeks not only to enhance the private sector’s role as a vital actor in advancing the SDGs but also to promote the adoption of the SDGs as the main framework for private sector strategies and operations so that all business outputs are contributing to the SDGs. UNDP’s Private Sector Development and Engagement Strategy (2018-2022) focuses on the role UNDP can play (in partnership with governments, businesses, investors, communities, civil society and academia) to amplify and accelerate the momentum for market change into irreversible transformation. Moreover, the CO envisions full alignment with UNDP 0.2 offer on building back and forward better focusing on inclusive and sustainable recovery.
UNDP in Eswatini has developed its Country Programme Document (CPD) that is aligned to the 2030 Agenda, NDP, The National Strategic Roadmap, the United Nations Sustainable Development Cooperation Framework 2021 – 2025 and ensured private sector role as reflected in UNDP’s global strategy is well-positioned at its heart. The CPD also recognizes the private sector as strategic partner for UNDP in supporting the country’s efforts to eradicate poverty in all its forms and dimensions, accelerate the structural transformation process for sustainable and inclusive development and build resilience to crises and shocks.
The Country Office therefore needs to reposition and strengthen its work with the private sector in this new environment post COVID 19. To this end, the country office intends to align its private sector work more closely with its overall vision of contributing to “empowered lives, resilient nations” and focusing on how the private sector and markets can contribute to economic, social and environmental dimensions of sustainable human development. As such, the country office is seeking the services of a seasoned expert to strengthen the engagement on private sector development.
The private sector development and engagement consultant will work closely with the international consultant to jointly undertake a diagnostic review of the private sector landscape in the country, lead the development of a private sector engagement strategy that is SDG-based and informed by a thorough analysis on investment mapping; lead the Country Office’s effort to mobilize private finance for SDGs; S/he will also support the CO in developing partnerships with private sector to unlock the potential of digital economy, contribute to ecosystem development solutions and other forms of integrated support for MSMEs business continuity and resilience. The Consultant will also be required to review the 2015 CO Private Sector Engagement Strategy, Service Offers, its results, gaps and key lessons.
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