Africa-Press – Eswatini. Foreign Direct Investment (FDI) assets acquired by the country has shown an increase of E871 million.
According to the Central Bank of Eswatini FDI accounts have posted a net of E989.5 million inflow in 2021 mainly due to the country incurring more FDI liabilities than assets acquired abroad.
The Annual Economic Review Report 2021/22 released by CBE indicated that liabilities incurred during the period increased by E1.861 billion (of which E1.138 billion were reinvested earnings) following a E674.0 million increase in 2020.
It was stated that also contributing to the liabilities were debt inflows between fellow enterprises amounting to E629.7 million.
Data presented shows that FDI assets acquired increased by E871.2 million in 2021 after a E235.9 million dip in the previous year.
It states that the increase in FDI assets was largely a result of a E732.3 million increase in debt instruments, which constituted of trade credits and loans between fellow enterprises operating between Eswatini and the rest of the world during the period under review.
Data shows that the country acquired a notable E3.193 billion worth of net portfolio investments assets during the year under review, while in 2020, there was a lower increase of E905.4 million in net portfolio investment acquisitions.
“The increase in net assets was due to a E1.386 billion increase in debt security assets belonging to pension and insurance funds, a turnaround from the E1.715 billion dip in the previous year,” the report read.
It further highlighted that the ‘other investment’ account, in 2021, registered a net outflow of E885.9 million as asset acquisitions grew faster than liabilities incurred following a net outflow of E2.054 billion in the preceding year.
It was reported that assets acquired increased by 13.4 per cent to E4.282 billion buoyed by a 14.4 per cent rise in the value of ‘other investment’ assets denominated as currency and deposits to E4.412 billion.
The report suggests that liabilities incurred increased significantly from E1.722 billion to E3.396 billion in 2021.
“Contributing to the liabilities incurred were loans, which grew by E1.111 billion in 2021, however, contracting by 40.3 per cent when compared to loans incurred in the previous year.
Government loans grew by a lower E997.9 million from E1.805 billion in 2020,” the report highlighted.
It also disclosed that the country also incurred an IMF Special Drawing Rights (SDRs) liability consisting a E1.557 billion (SDR75.2 million) additional allocation to Eswatini by the IMF as part of a general allocation of SDRs to help boost the level of international reserves of developing economies and strengthen their external positions.
According to the country’s international investment position (IIP), the stock of external financial assets continues to surpass external financial liabilities.
The net IIP position was a E17.788 billion surplus as at December 2021, which was 57.7 per cent higher than the net surplus position recorded in December 2020.
It states that the stock of foreign assets as at the reporting period increased by 20.1 per cent against an increase of 7.1 per cent in the stock of foreign liabilities.
“As at December 2021, the stock of financial assets amounted to E52.475 billion compared to E51.213 billion in December 2020.
Major components of total assets stock were in ‘other investments’ account, which accounted for 40.1 per cent of total assets amounting to E21.021 billion in the period under review, increasing by 26.5 per cent from the previous year,” part of the report reads.
It was stated that these assets were held by the country’s residents in the form of currency and deposits as well as trade credits and advances.
According to the report, foreign assets in the form of portfolio investment had a share of 38.1 per cent of the total foreign assets, amounting to E20.006 billion as at December 2021, growing by 19 per cent compared to December 2020.
Reserve assets, on the other hand, posted a surge of 8.9 per cent year-on-year to E8.829 billion, benefitting from the growth in the country’s SDRs holdings following the IMF’s new general allocation of SDRs to all member states.
“Direct investment assets were valued at E2.619 billion as at December 2021, depicting an increase of 22.6 per cent year-on-year and accounting for 5 per cent of total foreign assets,” the report read.
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