Africa-Press – Eswatini. Minister of Finance Neal Rijkenberg says the public debt stock is estimated to increase by almost two per cent and reach 44 per cent of Gross Domestic Product (GDP) in the current financial year.
Currently, the total public debt in the last financial year stands at E26.1 billion, meaning the country’s debt to GDP ratio is now at 40.2 per cent, which exceeds the 35 per cent limit of GDP in nominal terms.
Rijkenberg disclosed this when delivering his speech at the ninth Vulnerable Twenty (V20) Group ministerial dialogue held in Washington last week.
The V20 Group is an initiative of economies systematically vulnerable to climate change, whose aim is strengthening economic and financial responses to climate change.
The minister was represented by Central Bank Governor Phil Mnisi in Washington, but managed to deliver his speech virtually.
He highlighted the need for more resources to fund adaptation and mitigation to ensure resistance to climate change.
“Financing adaptation and building resilience to climate change will need more resources and will exert pressure on the fiscus,” he said, stating that the tricky part was not providing for these, which would eventually result to negative repercussions as more resources would eventually be needed to respond to climate change effects.
“As yet, the public debt stock in the financial year 2022/23 is estimated to reach 44 per cent of GDP of which about 52 per cent accounts for domestic debt and 48 per cent is external debt,” said the minister.
“However, post COVID-19, there could be a need to look at debt re-structuring to benefit the country,” he added.
Strikingly, this comes at a time when the United Nations’ Development Programme (UNDP) just warned that a serious debt crisis is on the brink of taking hold of the country.
In a new report titled ‘Avoiding Too Little Too Late’, the UNDP says Eswatini is part of nine ‘threshold’ countries which are ‘just on the brink of being among the world’s 54 most vulnerable in urgent need of debt relief’.
Countries at the most immediate risk are Sri Lanka, Pakistan, Tunisia, Chad and Zambia, while Eswatini is at the bottom of the borderline list alongside Angola, Cape Verde, Kyrgyzstan, Madagascar, Maldovar, Nicaragua, Niger as well as Saint Vincent and the Grenadines.
The major currency composition of the country’s debts comprises of the United States Dollar, Euro, Japanese Yen, Sterling Pounds and the South African Rand.
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