BY MFANUFIKILE KHATHWANE
MBABANE– The Kingdom of Eswatini’s Protea Bond Programme remains protected from ongoing market volatility on the Johannesburg Stock Exchange (JSE) because government opted for fixed-interest rates when issuing the bonds said Minister for Finance Neal Rijkenberg.
Speaking during an interview with Eswatini TV on June 15, 2026, Rijkenberg explained that the government had already accessed the market twice under its E4 billion Protea Bond Programme and had successfully raised between E1.2 billion and E1.3 billion.
“The moment we have gone to the market twice, more or less about E450 million in the first tranche and a second tranche of around E700 million. Right now, we do have between E1.2 billion and E1.3 billion floating on the Johannesburg Stock Exchange,” he said.
The minister said government deliberately chose fixed-rate bonds to protect itself from fluctuations in inflation and financial markets.
He explained that treasury bonds can generally be structured in two ways. One option is a floating rate, where the interest paid rises and falls in line with inflation and market conditions. The other option is a fixed rate, where the interest remains unchanged throughout the life of the bond.
“The most common is you have a floating base where, as inflation goes up and down, the interest you pay goes up and down. Or you fix it. We decided to rather fix the rate because we just wanted to play safe. Investors may price in a little more risk, but we wanted to make sure this kind of volatility does not have an impact on us,” he said.
Rijkenberg stressed that all treasury bonds currently issued under the programme carry fixed interest rates, meaning current market turbulence has no direct effect on the government’s repayment obligations.
“At the moment, all the treasury bonds we floated are fixed rates and they do not have an impact,” he said.
While describing the programme as a strategic financing tool, the minister admitted that the cost of the first two bond issuances was higher than government had hoped.
“The cost of our first two listings was slightly high. We were a little bit uncomfortable with the cost of interest on these two tranches,” he said.
However, he noted that this was expected because Eswatini was entering the regional capital market as a new issuer, requiring investors to first build confidence in the country’s debt instruments.
“When you come to the market for the first time, the market prices in a certain level of risk. As a new player, you do not necessarily get the greatest rates,” he said.
Despite the higher initial borrowing costs, Rijkenberg expressed confidence that interest rates would become more favourable as the country establishes a stronger track record in the market.
“We totally believe that in time we will be able to get those rates down and get them to a more acceptable interest rate on the Johannesburg Stock Exchange,” he said.
The minister revealed that government intends to return to the JSE to issue additional bonds under the programme and hopes future rates will move closer to those available in Eswatini’s domestic market and comparable South African government bond rates.
“We will be going back to the Johannesburg Stock Exchange soon and we will be seeing if we can get the rates to be more in line with our domestic market, as well as similar to South Africa’s rates on the same stock exchange,” he said.
According to the Minister, future issuances could include bonds with maturities of three, five, seven or even nine years, depending on investor appetite and market demand.
“We will see what the market is ready for. We do a lot of market sensitisation before the time to see what is needed in the market and then we float that specific bond,” he said.
He reiterated that future issuances would also be structured using fixed interest rates to ensure certainty and shield government from market swings.
“We will definitely go fixed again just to make sure that any volatility does not have an impact on us,” he said.
A Protea Bond is a specialised financial instrument that allows a foreign government to issue bonds in South African Rand on the Johannesburg Stock Exchange.
The arrangement enables neighbouring African countries to raise capital from regional investors while reducing exposure to foreign currency fluctuations.
Through the Central Bank of Eswatini, the Kingdom successfully listed a R4 billion Protea Bond Programme on the Johannesburg Stock Exchange in May 2024 as part of efforts to diversify funding sources and support national development priorities.
#ProteaBond #Finance #EswatiniEconomy #JohannesburgStockExchange #NealRijkenberg #InvestmentNews
(Courtesy Pic)
