The Ministry of Economic Planning and Development says the local economy will grow slower in 2022, but grow by 4.1% in 2023-2025. The ministry also reveals that tourist numbers increased by 113.7 percent in the first 7 months of 2022, due to the easing of COVID-19 restrictions.

By Ntokozo Nkambule

Concerns of yet another economic recession have been raised following projections that Eswatini’s economy is set to grow by only 1.2% in 2022.

According to the Ministry of Economic Planning and Development, the economy is still facing major economic challenges, especially emanating from the ongoing geopolitical tensions between Russia and Ukraine which have led to supply and trade disruptions triggering significant hikes in the prices of oil and food.

This is communicated in the Statement on Recent Economic Performance September 2022 issued by Dr. E.T Gina, the Minister of the aforementioned ministry. The report notes that a number of subsectors in the domestic economy are projected to experience subdued growth, leading to an overall modest growth rate of 1.2% in 2022.

The ministry observes that in 2022, the primary sector is expected to grow at 2.2 percent, compared to 2.5 percent in 2021. The statement notes that positive performance is expected in crop production. Sugarcane production is expected to rebound from relatively low previous year’s levels benefitting from anticipated improvements in yields.

The secondary sector on the other hand is expected to grow by 2.6 percent in 2022 compared to a growth of 15.4 percent in 2021, due to slower growth in manufacturing output. The ministry also anticipates a contraction in construction activities. In actual fact, construction activity is expected to decline by 12.4 percent in 2022, reflecting the completion of a number of projects.

Growth in the tertiary sector is expected to remain muted, due to heightened inflationary pressures in the domestic economy. The sector is expected to grow by 0.1 percent following a growth of 4.1 percent in 2021. Financial services, health, and education are also expected to record subdued performance. Interestingly, tourist numbers increased by 113.7 percent in the first 7 months of 2022, due to the easing of COVID-19 restrictions. As a result, the ministry expects a big rebound in the sector.

In terms of the medium-term outlook, which is a period from 2023-2025, the ministry anticipates growth to be at 4.1 percent driven by the full implementation of the Lower Usuthu Smallholder Irrigation Project (LUSIP) II, as well as the commencement of the multi-billion Mkhondvo-Ngwavuma Water Augmented Project.

The LUSIP II is projected to bring an additional 4 000 hectares under sugarcane production by 2025. Gina observes that these two projects will yield broad-based economic activity touching on multiple sectors such as construction, mining & quarrying, transport, and services in general.

Share With Friends