By Phiwa Sikhondze
Eswatini has reduced its fiscal deficit and boosted its economic growth, thanks to the higher revenue from the Southern African Customs Union (SACU) as well as prudent and fiscal discipline.
The Minister of Finance, Neal Rijkenberg, in a press statement, noted that Eswatini has used part of the SACU windfall to put itself on a better debt track, as it was entering into a debt trap.
The Minister said that Eswatini’s fiscal deficit, which is the difference between the government’s revenue and expenditure, now stands at 2.2%.
“As a country, we are now out of the debt spiral trap that we were getting ourselves stuck into. You will recall that in 2017, our fiscal deficit stood at 7.5%, which was highly unsustainable. Over the past couple of years, we have been able to reduce the fiscal deficit by reducing the budget spending, which was tough, but we did the fiscal prudent thing. As it stands, according to us, our fiscal deficit is 2.2%, but according to the World Bank it’s 2.3%, as we do not account for the money we allocate to the SACU Stabilization Fund” the Minister said.
He also mentioned that Eswatini’s economic growth has risen from an average of 2% before 2018 to around 4.5% in 2023.
“We are now positioned very well for real economic growth because now we are on a solid base, sustainable foundation. We are not living with debt, we are not stuck in the debt spiral,” he said.
Rijkenberg also announced that Eswatini is set to receive E13.06 billion from the Southern African Customs Union (SACU) revenue pool in the 2024/25 financial year, an increase of 11.15 percent from the previous year’s E11.75 billion.
The Minister said that the higher SACU revenue is partly due to the surplus revenue collections of E1.8 billion from the 2022/23 financial year, which will be distributed to the SACU member states in 2024/25.
According to the Minister, the country’s imports also played a huge role in the surge in the value of SACU receipts.
“It is important to note that the country’s imports from SACU during the year under review increased by 25.24 percent compared to the previous year,” the Minister said.
Rijkenberg added that the projected Common Revenue Pool for 2024/25 has grown by 6.6 percent from the 2023/24 level, reflecting the recovery of the regional and global trade amid the COVID-19 pandemic.