Africa > Eswatini, Kingdom of

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International Monetary Fund. African Dept.
This Selected Issues paper highlights climate change impacts in Eswatini. Eswatini is highly susceptible to climate shocks and is impacted by frequent droughts, erratic rainfall, variability in temperature, and water scarcity. Climate change is affecting Eswatini in several ways. With over 70 percent of the population dependent on agriculture, the increased frequency of extreme weather phenomena necessitates adaptation to create a climate-smart agricultural sector with a long-run objective of ensuring food security and generating exportable surpluses. Focusing on sustainable energy is also pertinent to reduce reliance on carbon-intensive energy production that exacerbates climate stress. Eswatini should be seeking access to green financing and insurance mechanisms to protect against the financial impacts of climate change. Insurance plays a crucial role in providing a safety net against the unpredictable impacts of disasters. By spreading the financial risk associated with natural disasters, insurance helps to stabilize economies and support recovery efforts.
International Monetary Fund. African Dept.
The 2024 Article IV Consultation discusses that Eswatini’s growth is estimated to have reached 4.9 percent of gross domestic product (GDP) in 2023, driven by exports of sugar and soft drink concentrates, tourism, and the communication sector, and is poised to remain in the 4.5 to 5 percent range in 2024. Unemployment remains high at 35.4 percent in 2023 and 48.7 percent among the youth, with large skill gaps and mismatches being critical factors. While social indicators need to be updated, discussions indicated that poverty, food insecurity, inequality, and gender-based violence remain important social challenges. Growth is expected to slow while inflation is projected to follow global developments and decline throughout the 5-year projection horizon. With Southern African Customs Union receipts projected to fall, the authorities are expected to exercise the expenditure restraint needed to keep debt around 40 percent of GDP. The current account is projected to remain in surplus but official reserves will likely remain low.
Anastassiya Marina
,
Phousnith Khay
,
David Farelius
,
Vernon McKinley
,
Ravi M Periyakavil R.
, and
Rodolfo Wehrhahn
The IMF conducted a diagnostic review of the financial system of the Kingdom of Eswatini and proposed a Technical Assistance Roadmap to support the authorities’ detection of risks and vulnerabilities and to enhance capacity in financial sector oversight. The financial stability module focused on areas agreed with the country authorities: financial stability and systemic risk monitoring, macroprudential frameworks and tools; crisis management and financial safety net; and supervision and regulation of banks, nonbank deposit-taking institutions, insurance, and retirement funds. The financial sector statistics module focused on key gaps in monetary and financial statistics and financial soundness indicators that hamper financial stability analysis.
International Monetary Fund. Monetary and Capital Markets Department
and
International Monetary Fund. Statistics Dept.
The IMF conducted a diagnostic review of the financial system of the Kingdom of Eswatini and proposed a Technical Assistance Roadmap to support the authorities’ detection of risks and vulnerabilities and to enhance capacity in financial sector oversight. The financial stability module focused on areas agreed with the country authorities: financial stability and systemic risk monitoring, macroprudential frameworks and tools; crisis management and financial safety net; and supervision and regulation of banks, nonbank deposit-taking institutions, insurance, and retirement funds. The financial sector statistics module focused on key gaps in monetary and financial statistics and financial soundness indicators that hamper financial stability analysis.
International Monetary Fund. African Dept.
This 2023 Article IV Consultation discusses that Eswatini has shown resilience to multiple economic shocks. While Eswatini has endured the pandemic and successive shocks from international commodity prices, fiscal and external buffers are low. In tandem, shifting from a state-led to a private sector and export-led growth model will be essential to achieve higher and sustained levels of inclusive growth necessary for poverty reduction. Focused efforts to address the underlying causes of recent civil unrest, together with concerted efforts to tackle gaps in governance, are also needed. Potential new shocks to food, fuel, and fertilizer prices and downward pressure on the external position and foreign exchange reserves are also risks. Delays in fiscal consolidation risk continued macroeconomic imbalances. Fiscal adjustment should continue to target a reduction in the public wage bill and transfers to public enterprises, but also a rationalization of Eswatini’s tax expenditure regime. Consolidation will need to be supported by stronger public financial management. Monetary and exchange rate policy should continue to focus on price stability and maintaining adequate reserves to safeguard the peg.
International Monetary Fund. African Dept.
This technical assistance (TA) mission on Government Finance Statistics (GFS) was conducted during July 6-12, 2022. The main purpose of the mission was to review the progress made by the authorities in implementing previous TA recommendations and provide further support to strengthen the compilation and dissemination of GFS in line with international standards set out in the Government Finance Statistics Manual 2014 (GFSM 2014).