BY MBONO MDLULI
MBABANE – An amount of E20.1 billion was extended to Eswatini’s private sector in the month of August 2024.
This is contained in the Central Bank of Eswatini (CBE) Monthly Statistical Release for the months of August and September 2024. “Credit extended to the private sector increased by 1.0 per cent month-on-month and 7.8 per cent year-on-year to close at E20.1 billion at the end of August 2024,” said part of the report.
According to the report, the rise in private sector credit was driven by credit to the other sectors of the domestic economy and the business sector, while credit to households & nonprofit Institutions serving households (NPISH) declined. Credit to other sectors of the domestic economy grew by 8.7 per cent month-on-month and declined by 2.6 per cent year-on-year to settle at E1.1 billion at the end of August 2024.
The month-on-month improvement, according to the report, was on the backdrop of expansion in credit to local Government and other financial corporations while credit to parastatals receded. Credit to local Government grew by 20.5 per cent to E81.8 million, while credit to other financial corporations rose by 17.3 per cent to E637.1 million.
Credit to parastatals, however, declined by 4.3 per cent to close at E397.0 million at the end of August 2024. Credit extended to the business sector increased by 2.1 per cent month-on-month and 11.6 per cent year-on-year to settle at E10.4 billion at the end of August 2024. Growth in credit to businesses emanated from the following subsectors: construction (22.7 per cent), manufacturing (5.0 per cent), distribution and tourism (4.0 per cent), and agriculture and forestry (3.6 per cent).
In contrast, a decline in credit was observed in the following subsectors: mining and quarrying (-68.9 per cent), community, social and personal services (- 1.5 per cent), transport and communication (-1.1 per cent), and real estate (-1.0 per cent). An analysis of credit to businesses by size, indicated that the month-on-month improvement in credit to business was driven by credit to large enterprises while credit to small and medium enterprises (SMEs) declined. Credit to large enterprises grew by 3.0 per cent to E7.2 billion while credit to SMEs decreased marginally by 0.1 per cent to E3.2 billion.
Credit extended to households & NPISH decreased by 1.1 per cent month-on-month and grew by 5.0 per cent year-on-year to reach E8.5 billion at the end of August 2024. The month-on-month contraction was driven by other personal (unsecured) and housing loans. Other personal (unsecured) loans declined by 3.0 per cent to E3.1 billion while housing loans fell by a lesser 0.3 per cent to E4.3 billion. In contrast, motor vehicle loans increased by 1.6 per cent to close at E1.1 billion at the end of August 2024.
Net claims on Government by the banking sector turned around from a negative E23.9 million in July 2024 to E1.4 billion at the end of August 2024, as both its components increased. Claims on Government grew by 23.2 per cent to E7.5 billion, mainly due to an advance from the Central Bank coupled with higher investment in government securities. Government deposits, on the other hand, declined by a marginal 0.2 per cent to E6.1 billion in August 2024.
Broad money supply (M2) expanded by 3.4 per cent month-on-month and 8.0 per cent year-on-year to peak at E25.0 billion at the end of August 2024. The rise in M2 emanated from both its components; quasi money supply and narrow money supply (M1). Quasi money supply increased by 4.5 per cent month-on-month and 7.4 per cent yearon-year to E15.7 billion, supported by both its components.
Time deposits grew by 4.7 per cent to E13.6 billion while savings deposits rose by 3.2 per cent to E2.1 billion. Narrow money supply (M1) amounted to E9.3 billion in August 2024, depicting growth of 1.6 per cent month-on-month and 9.0 per cent year-on-year, driven by both its components. Emalangeni outside depository corporations grew by 4.7 per cent to E794.1 million while transferrable (demand) deposits increased by 1.3 per cent to close at E8.5 billion.
Preliminary gross official reserves amounted to E8.3 billion at the end of September 2024, depicting a decline of 17.8 per cent month-on-month and growth of 9.1 per cent year-onyear. The month-on-month decline in reserves was mainly due to net Rand outflows from trades with local commercial banks coupled with drawdowns by government for payment of fiscal obligations. As a result, the import cover declined from 2.7 months in August 2024 to 2.2 months at the end of September 2024. Expressed in special drawing rights (SDR), gross official reserves amounted to SDR356.6 million, depicting a month-on-month decline of 16.1 per cent and year-on-year growth of 16.6 per cent.
