BY MBONO MDLULI
MBABANE – Eswatini’s Gross Domestic Product (GDP) now stands at E69.98 Billion, reflecting an economic growth of five percent.
This was revealed by Minister of Economic Planning and Development Dr Thambo Gina today (Thursday, November 7, 2024) during a press conference at the Ministry of Economic Planning and Development Conference Room in Mbabane.
The minister met with the media to provide an update to Emaswati on recent economic developments and medium-term prospects
During the conference, Gina mentioned that following the completion of the economic census in 2019, the size of the economy is indicatively higher by E1.5 billion in 2019 relative to previous estimates. With the rebasing, real GDP is now valued at 2019 prices, which is the new base year, moving away from the 2011 prices used previously.
“Preliminary results from the rebasing reflect that real GDP stood at E69.975 billion in 2023, which represents a growth of 5.0 percent compared to 2022,” Gina said.
Minister Gina talked about the future of the international economy. “Global growth, as reported by the International Monetary Fund, is projected to moderate from 3.3 percent in 2023 to 3.2 percent in 2024 and 2025,” he said.
The global economy, according to the minister, is battling with the lingering effects of intensifying geopolitical tensions, which triggered supply chain disruptions and elevated global inflationary pressures thereby heightening economic vulnerabilities for most countries. Regionally, he said the Sub-Saharan Africa was projected to grow by 3.6 percent in 2024, owing to weak growth prospects in major economies.
Turning the focus to the country’s economy, Gina said GDP growth in 2024 was expected to moderate to 3.6 percent. The growth, Gina said, was slower on account of previous year base effects. “As we may recall, the year 2023 was a National Elections year, which induced an increase in spending on goods and services,” he said.
On a positive note, the minister said growth in 2024 would benefit from rebounding manufacturing and agricultural activities. Exports data for nine months reflected a growth of 13.6 percent, largely attributed to food processing, textiles and miscellaneous edibles.
According to Gina, Eswatini’s GDP growth was expected accelerate strongly in the medium term and average 5.4 percent, with a peak of 8.3 percent in 2025. The medium-term growth would be largely on account of the construction of the Mpakeni dam under the Mkhondvo – Ngwavuma Water Augmentation Project (MNWAP), valued at E2.7 billion, and will be implemented for a period of 36 months.
In addition, the minister said other public and private projects to commence in 2025 included the construction of the Siphofaneni-Maloma-Nsoko (MR14) and Maloma–Siphambanweni (MR 21) roads, energy-related projects, construction of head offices, private malls and shopping complexes, amongst others.
The minister was of the view that it was important to note that the higher construction activity induced domestic demand and led to growth in other sectors such as manufacturing, wholesale and retail, transportation, financial services as well as professional services.
Moreover, the minister projected that manufacturing activity would benefit from rebounding external demand, as well as expansions anticipated in some industries, such as sugar processing, textile and chemicals. Similarly, the mining sector was expected to maintain strong growth buoyed by increased production in coal and exploration of other minerals.
“With every projection, there are upside and downside risks. Globally, the chief risks to economic growth are geopolitical tensions, conflicts and transitions of political leadership in major economies (including those from the US Elections). These risks shape global value chains, commodities prices and foreign currency movements, all of which can impact the domestic economy,” he said.
According to Gina, unfavourable weather conditions, arising from climate change, remained a major concern, largely affecting output in the agriculture, agro-processing and hydro-power generation subsectors.
On the domestic front, growth prospects would be dependent on the fiscal position and fiscal space to support the implementation of public projects mentioned earlier, and those that would be planned in the pipeline.
A faster implementation rate of projects will lead to higher growth trends than reported and the opposite is true. Similarly, the minister stated that the financing of private sector projects and pace of implementation could be a major risk on the projected economic growth path.
