Africa-Press – Eswatini. The country has the best public debt to Gross Domestic product ratio out of all the countries in the common monetary area (CMA) which consist, South Africa, Namibia and the Kingdom of Lesotho.
The CMA is a regional integration body focusing on monetary issues, where smaller member states’ currencies are pegged on a one-is-to-one with the South Africa Rand.
The Central Bank of Eswatini held a symposium with the theme ‘Global Spillover Effects into the CMA Region,’ at Happy Valley Hotel on Friday, where the topic was deliberated with a view of knowledge sharing.
The keynote speaker for the symposium was Deputy Governor of the South African Reserve Bank Fundi Tshazibana while the discussants were Governor of the Bank of Namibia Johannes Gawaxab and Governor of the Central Bank of Lesotho Dr. Emmanuel Letete.
It was highlighted that the global benchmark for public debt to GDP ratio was 60 per cent, and the Southern African Development Community (SADC) benchmark was 45 per cent.
With the country’s public debt at 39 per cent of GDP, it is below both the global and SADC benchmarks.
The Kingdom of Lesotho’s debt stands at 57 per cent of GDP, which is slightly lower than the global benchmark and higher than the SADC benchmark.
Namibia, on the other hand has a public debt to GDP ratio of 68 per cent while South Africa’s debt stands at 73 per cent of GDP, both significantly higher than the global and SADC benchmarks. With this backdrop, Namibia and South Africa highlighted that there was a lot to learn from the Kingdoms of Eswatini and Lesotho.
Central Bank of Eswatini Governor Dr. Phil Mnisi said, “Our debt is contained, in the context of South Africa, they have a more diversified economy, much bigger economy and much more capacity to face domestic debt.”
During discussions, Gawaxab highlighted that there was a lot that could be learnt by the other three countries pertaining to public debt.
“We have challenges when it comes to economic growth but even if you look at the debt to GDP ratio in the CMA, the two kingdoms are doing very well, so South Africa and Namibia can learn a lot from the kingdoms in terms of how we manage our debt,” he said.
Gawaxab said although Namibia’s debt levels were high when measured against the benchmark, it was not a crucial issue.
“Are we able to repay our debt, is the fundamental question,” he said.
He further highlighted that 75 per cent of the country’s public debt was domestic and only 25 per cent was foreign.
Dr Lettete (Governor of Central Bank of Lesotho) said Lesotho’s debt levels remained moderate.
He said it was only because that country’s borrowing was concessional, which made for more favourable terms than they could obtain in the market place.
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