BY MBONO MDLULI
MBABANE — Moody’s Investors Service has upgraded Eswatini’s global credit rating to B2 Stable from B3 Positive.
This is great news for the country, as confidence from investors about the country will grow, according to Minister of Finance Neal Rijkenberg. The minister said this today (Tuesday, November 26, 2024) during the #FinanceInFocus programme.
Additionally, the country’s South African market-specific credit rating has improved to (P) Baa3.za from (P) Ba2.za, marking significant progress in the country’s economic stability and credit worthiness.
The minister said this was a point of celebration for Emaswati because Moody’s was one of the top three rating agencies in the country, probably the biggest. He said the rating focused on how a country’s risk was perceived internationally. This helped many organisations in terms of analysing the situation of countries in an easy way.
According to Rijkenberg, the companies that were enticed to invest in countries did not have all the time and other resources to analyse economic, political, and other situations of countries. They relied on rating agencies such as Moody’s for such crucial information, which could help them decide if they were to invest in a certain country or not.
The minister said the country’s B3 rating was not a great rating. He stated that from B3, Eswatini moved to B3 Positive, which was an improvement. This improvement meant that if the country was not to do anything wrong for a year, it would place itself in an opportunity to move up once again, hence the B2 rating now.
Rijkenberg said the Moody’s board of directors said there were a lot of positives in the country, such as the SACU Stabilisation Fund, which served as a cushion against the volatility of this market. Another factor was the wage bill, which decreased from 42 percent to about 33 percent. The budget of the country had improved and there was what the minister termed as the fiscal prudence.
Another factor considered by Moody’s was the fiscal deficit, which had decreased from 7.5 percent to two percent. The country’s GDP also improved by five percent last year, and this year, with some rebasing, improved by three percent. Next year, the GDP is projected to improve by 8.3 percent, according to the minister. He said these were a lot of positive happening in the country.
He said very few countries in the continent had an improvement in such ratings in the past five years. Rijkenberg said the country was proud of that. He thanked His Majesty King Mswati III for leading this country towards such a positive direction. He also pointed out that Prime Minister Russell Mmiso Dlamini and his entire Cabinet team had been fantastic in driving the country towards this direction. He also thanked the officials and all the public servants for having helped the country in moving towards this direction.
Rijkenberg said the rating also took into account the credit worthiness of the country. It was considered that Eswatini proved to be honest in honouring its debts. Because of that, the minister also pleaded with Emaswati to ensure that they maintained honesty in their dealings, especially when it came to matters of improving their credit scores.