Africa-Press – Eswatini. With Eswatini’s forecasted higher growth trajectory, the public debt–to-GDP ratio is projected to decline to 41 per cent in 2023 and 38 per cent in 2024.
This is according to the African Development Bank’s (AfDB) recently released 2023 Southern Africa Economic Outlook. The AfDB noted that in 2023, gross domestic product (GDP) growth is projected to be maintained at 3.5 per cent, supported by a rebound in domestic demand and rejuvenation of consumption and investment spending.
Elevated
Inflation is projected to remain elevated, averaging 5.3 per cent over 2023–24, attributed to persistent global inflation and a weaker rand. The fiscal deficit is expected to narrow to 3.0 per cent of GDP in 2024 from 5.1 per cent in 2023 due to a strong slow rebound in Southern African Customs Union (SACU) receipts. With the forecasted higher growth trajectory, the public debt–to-GDP ratio is projected to decline to 41 per cent in 2023 and 38 per cent in 2024. The current account surplus is projected to average 0.9 per cent in the medium term due to higher secondary income flows spurred by SACU. Economic tailwinds include the huge increase in SACU revenue windfalls and the proposed SACU Stabilisation Fund, expected to foster fiscal stability. Headwinds remain higher global inflation, weak growth in South Africa, and the difficult socio-political context.
Climate change issues, policy options
Eswatini has diverse land and climatic conditions, and its natural resources include arable land, water, and minerals. The mining industry’s contribution to GDP is around two per cent, concentrated in coal and quarry mining. The scope to leverage natural capital to finance climate programmes remain minimal. Eswatini’s 2021 Nationally Determined Contribution (NDC) suggests that the country needs US$0.95–US$1.5 billion to achieve its climate goals, resources beyond its capacity. The 2021 Climate Public Expenditure and Institutional Review indicated that Eswatini received about $209 million from international financiers over 2015–20 and that US$103 million was leveraged as co-finance, mainly from domestic sources.
The private sector’s participation in NDC actions, though nascent, is imperative.
Key
Banks and large companies, such as sugar corporations, are key potential partners. Eswatini adopted the Strategy to Enhance Private Sector Engagement for climate finance, but barriers include lack of affordable long-term financing, market imperfections, inadequate enabling policies, perceived financial and technology risks, and high upfront capital costs. An enabling policy and regulatory environment to enable private innovation and investment in NDC actions is important, including creation of investment incentives that will minimise costs and reduce risks.
For More News And Analysis About Eswatini Follow Africa-Press
