- Emaswati living under the poverty line amounted to 79.30% a decade ago
BY THEMBA ZWANE
MBABANE – The Kingdom of Eswatini’s continued efforts to eradicate poverty has seen the country attain a 27.3% reduction in the past decade.
Eswatini poverty rate for 2016 was at 79.30%, a 8.8% decline from 2009. Poverty rate for 2009 was 88.10%, a 2.3% decline from 2000 while poverty rate for 2000 was 90.40%, a 7.6% decline from 1994, which was at 98%.
About a fortnight ago, the African Development Bank Group published Eswatini’s economic outlook where on recent macroeconomic, financial and social developments, real GDP growth decelerated to an estimated 4.7% in 2024, from 5.0% in 2023. On the supply side, the contraction was driven by high base effects, particularly from the services sector, which had surged due to election-related economic boost in 2023.
High SACU Receipts
Delays in implementing large-scale investment projects further dampened growth. On the demand side, economic growth was constrained by delayed public investments, despite higher Southern African Customs Union (SACU) receipts. Inflation eased to 4.3% in 2024 from a four-year peak of 5.0% in 2023, supported by lower oil prices.
“Interest rates eased to 7.0% in 2024, from 7.5% in 2023, reflecting a more accommodative monetary policy stance. The Lilangeni peg to the South African Rand continued to support exchange rate stability. Fiscal consolidation coupled with stronger SACU inflows, sharply narrowed the fiscal deficit from 4.8% of GDP in 2023 to just 0.1% in 2024. While debt vulnerabilities persist, public debt (at 41% of GDP) remains sustainable, with a moderate risk of debt distress,” states the report.
The current account surplus was 1.5% of GDP in 2024, down from 2.4% in 2023, benefiting from improved exports, particularly of sugar and soft drinks, alongside higher SACU receipts. The financial sector is said to remain small and cash-based, with four commercial banks, while non-bank financial institutions hold 78% of sector assets.
Economic Growth Rate
“Social indicators remain weak, reflecting the slow average economic growth rate of just 2% over the past decade and the limited impact of a public sector-led growth model since 1995. As a result, unemployment remains high at 37.6%, while income inequality, measured by the Gini index, stands at 54.6. Poverty affects 52% of the population, underscoring the persistent challenges of inequality and economic exclusion.”
The African Development Bank stressed that addressing these issues will require structural reforms, inclusive growth strategies, and increased private sector participation to generate sustainable employment and reduce disparities.
Real GDP growth was projected at 6.5% for 2025, driven by investments in key sectors including: the Lower Usutu Smallholder Irrigation Project; energy and mining (coal and quarrying) projects; infrastructure development, including the construction of various dams under the Mkhondvo Ngwavuma Water Augmentation Program, notably the Mpakeni dam; and road construction, notably the MR14 (Siphofaneni-Sithobela- Maloma-Nsoko) and MR21 (Maloma-Siphambanweni) roads.
Current Account Surplus
Inflation was expected to rise in 2025, driven by higher food and administered utility prices, as well as the depreciation of the exchange rate. The fiscal deficit is projected to widen in 2025 and 2026, influenced by a drop in SACU revenues. The current account surplus was expected to fall in 2025, with outflows expected.
Downside risks to growth include delays or postponements in public project implementation, unfavorable weather conditions, geopolitical tension spillovers, trade tensions, and ODA cuts. To mitigate these risks, the government remains committed to addressing implementation challenges, mainstreaming climate adaptation and mitigation and environmental protection measures, enhancing domestic resource mobilisation, and promoting economic diversification.
“In per capita terms, Eswatini’s natural capital decreased by 10% in 2020 from USD 8628 in 1998. This trend epitomises the unsustainable use of natural capital, with restoration efforts hindered by constrained fiscal space. Despite initiatives to enhance the investment environment and expand private sector credit, human capital remains constrained by the large informal sector (62% of total employment), youth unemployment (65%), and extreme poverty (52%),” reads the report.
Strengthening Procurement Regulatory Agency
Fiscal efficiency has been improved through strengthening the public procurement regulatory agency and introducing integrated financial management systems. Strengthening the anticorruption and competition commissions is bolstering the government’s capacity to mobilise capital. Enacting a law governing state-owned enterprise (SOE) mergers and public private partnerships can unlock private sector participation.
To mobilise capital for long-term sustainable growth, the reports mentions three reforms that will be required. First is improving fiscal management through the rollout of the integrated financial management information system. Second is enhancing public procurement efficiency by strengthening the institutional and human capacity of the Eswatini Public Procurement Regulatory Agency. Lastly, it is fast-tracking the rationalisation of SOEs by clearly separating regulatory functions from commercial activities.
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