BY SIBUSISEKILE NDLANGAMANDLA
MANZINI– Government is developing a new economic planning tool designed to give policymakers a clearer picture of how money, jobs, households and businesses are connected across Eswatini’s economy.
The Ministry of Economic Planning and Development, through its Macro Unit, has begun developing a National Social Accounting Matrix (SAM), an economy-wide database expected to strengthen the country’s ability to forecast economic trends, assess shocks and make policy decisions based on evidence.
In simple terms, the tool will allow economic planners to look beyond individual sectors and better understand how a development in one part of the economy can affect others.
For example, when economic conditions change, policymakers need to understand not only the immediate effect on one industry, but also how the change could filter through businesses, households, employment and other sectors of the economy.
That is the bigger picture the Social Accounting Matrix is intended to provide.
The Ministry recently convened a kick-off meeting to begin developing the system.
A Social Accounting Matrix records transactions and relationships between different players in an economy and provides a structured picture of how those players interact.
The Ministry believes the tool will strengthen Eswatini’s capacity for economy-wide modelling, providing policymakers with stronger analytical support when assessing potential economic changes and shocks.
During the meeting, Professor Rob Davies presented different approaches that can be used to construct a Social Accounting Matrix.
He explained the bottom-up approach, which relies heavily on detailed survey information, as well as the top-down approach, which begins with National Accounts before using survey information to provide greater detail.
Participants also examined how a more detailed MicroSAM can be developed from a broader MacroSAM.
Discussions centred on how national economic accounts can be broken down according to the specific policy questions Government wants to answer, while also taking into consideration the quality and availability of data.
National Accounts provide the overall picture of economic activity, while survey information can reveal how economic activity is distributed across different sectors and groups.
Statistical methods, including RAS and Entropy techniques, can then be used to reconcile differences between datasets and produce a balanced Social Accounting Matrix.
Among the major information sources identified for the project are the Eswatini Household Income and Expenditure Survey and the Eswatini Labour Force Survey.
These datasets are expected to contribute towards building the more detailed MicroSAM.
The development is significant because economic policymaking increasingly requires planners to understand not only what is happening in the economy, but also how different economic decisions and shocks could affect various sectors and groups.
With a comprehensive SAM, Eswatini will have an additional analytical tool for examining those relationships before major policy responses are formulated.
The Ministry stressed that developing the system will require continued collaboration, engagement and capacity building to ensure it is tailored to Eswatini’s particular policy needs.
Once developed, the National Social Accounting Matrix is expected to strengthen the Kingdom’s economic modelling and analytical capabilities, helping policymakers make more informed and responsive economic decisions.
For emaSwati, the significance of the project lies in the quality of decisions that can be made when Government has a clearer and more connected picture of the economy.
Better information gives planners a stronger foundation for understanding economic pressures, anticipating possible consequences and designing responses based on what the data shows rather than relying only on broad estimates.
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