Eswatini’s Economy Rebounds in 2023 Due to Higher Exports and Increased SACU Revenues

By Phiwa Sikhondze

Eswatini’s economy has depicted a growth of 7.7% year-on-year in the third quarter of 2023, recovering from the low growth of 1.2% in 2022.

This is according to a press statement titled Recent Economic Performance issued by the Minister of Economic Planning and Development, Dr Tambo Gina, in collaboration with the Central Bank of Eswatini.

The growth was greatly driven by higher exports of goods, which increased by 19.2% in 2023, benefitting from a weaker local currency that depreciated by 12% against major trading currencies.

The Minister reported that the country’s fiscal situation improved, as the Southern African Customs Union (SACU) revenues doubled in 2023/24, reaching E11.75 billion, up from E5.82 billion in 2022/23.

The SACU revenues account for about 40% of the country’s total revenues and are a major source of foreign exchange. The increase in SACU revenues boosted the gross official reserves, which rose by 15.2% in 2023, reversing the decline of 15.4% in 2022.

The reserves were enough to cover 2.8 months of imports as of December 2023, slightly below the international benchmark of 3.0 months.

However, he also noted that the country faced some challenges, such as rising inflation, which increased to 5.0% in 2023, mainly due to higher food and transport prices.

The CBE kept the discount and prime lending rates unchanged at 7.50% and 11.0% respectively, to support the economic recovery and maintain price stability. Credit to the private sector also slowed down, growing by 2.9% in 2023, compared to 7.0% in 2022, reflecting the weak demand and supply conditions in the economy.

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