…..Total public debt stood at E34.54 billion on September 30 equivalent to 39.79% of GDP
…..Eswatini’s Public debt to GDP is considered moderate
…South Africa’s Public debt reaches 304.9 USD equivalent to 73.9% of that country’s GDP
BY MBONGENI NDLELA
MBABANE – Eswatini’s public debt has slightly increased by E581.80 million when compared to the first quarter of this financial year.
The first quarter of government financial year starts from April to June while the second quarter begins in July to September 30.
Public debt is the amount of money a government owes to creditors and is also known as government debt or sovereign debt.
Eswatini’s public domestic debt includes loans from local entities, supplier bonds, Central Bank Advances, Treasury bills, and infrastructure bonds. Short-term debt instruments, such as Treasury bills and CBE advances, account for 31 per cent of the government’s debt.
The country’s public debt stock increase is reflected in the Second Quarter Performance Report for the 2024/25 Financial Year submitted by the Ministry of Finance to parliament.
According to the report, preliminary debt figures show that, as of 30th of September 2024, total public debt stood at E34.54 billion which is an equivalent of 39.79 per cent of GDP.
AI Overview has also concurred with the government report, stating that as of September 2024, Eswatini’s public debt-to-GDP ratio was estimated to be under 40 per cent, which is considered moderate. The AI Overview listed the following as contributing factors:
• Fiscal adjustment plan
The country’s 2020 fiscal adjustment plan was achieved, with expenditure restraint and windfall receipts from the Southern African Customs Union (SACU).
• Primary fiscal balance
The primary fiscal balance for the 2023/2024 fiscal year was estimated to be a surplus of 1.5 per cent of GDP.
• Economic growth
Eswatini’s economy grew by 4.9 per cent in 2023, driven by manufacturing, services, and SACU transfers.
The Ministry of Finance has stated in the Second Quarter Performance Report that the public debt is composed of domestic debt amounting to E19.18 billion, which is equivalent to 22.60 per cent of GDP and external debt amounting to E15.36 billion which is equivalent to 17.70 per cent of GDP.
“Compared to the previous quarter which stood at E33.96 billion, total public debt has slightly increased by about E581.80 million, “the report stated.
Meanwhile, South Africa’s National Government Debt has been reported to have reached 304.9 USD billion in August 2024, compared with 296.6 USD billion in the previous month.
According to Trading Economics, South Africa’s public debt in 2024 is expected to be around 73.9 per cent of the country’s GDP.
On another note, the Ministry of Finance has reported that Domestic debt stock increased from E17.86 billion as of the end of 30th June 2024 to E19.18 billion as of 30th September 2024.
“The increase can be attributable to the high uptake of Government Treasury Bills and Bonds in auctions over the period under review. Treasury bills slightly increased from E3.23 billion as of 31st March 2024 to E3.43 billion as of 30th September 2024,” reads the report.
It is further stated that Domestic loans slightly decreased from E1.80 billion to E1.65 billion as of 30th September 2024.
“There were no Promissory notes outstanding as Government paid off the existing one in December 2023 and no new ones have been issued. And the Central Bank of Eswatini (CBE) Advance increased from E1.79 billion to E2.12 billion during this period under review,” it states.
It continued: “External debt slightly decreased from E16.10 billion as of 30th June 2024 to E15.36 billion as of 30th September 2024. This can be attributed to a slight decrease in the implementation of capital projects as reflected in external disbursements which amounted to E176.98 million and the slight appreciation of Lilangeni against foreign currencies for the period under review compared to the previous quarter ended 30th June 2024 which stood at E210.41 million. Overall total disbursements indicate a decrease of about E33.43 million from the previous quarter. The drawdowns for the quarter were associated with the following project loans,”
