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Books and Analytical Papers > IMF Staff Country Reports

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  • Type: Journal Issue x
  • Eswatini, Kingdom of x
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Cover IMF Staff Country Reports
Kingdom of Eswatini: Selected Issues
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.
Keywords:
labor market indicator; NOWCASTING SWZ; Unemployment insurance in ESWATINI; GDP forecasting model; core element; Unemployment benefits; Natural disasters; Climate finance; Climate change; Unemployment; Africa; Global; Southern Africa; Sub-Saharan Africa
Cover IMF Staff Country Reports
Kingdom of Eswatini: 2024 Article IV Consultation-Press Release; and Staff Report
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.
Keywords:
Eswatini lilangeni; BRFP liquidity Management; capital markets intermediary; SACU receipts; arrangement vis-à-vis; liquidity monitoring; International reserves; Arrears; Southern Africa; Africa; East Africa
Cover IMF Staff Country Reports
Kingdom of Eswatini: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Kingdom of Eswatini
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.
Keywords:
government payment; stabilization fund; CBE Law; excl. SACU revenue; exchange control data collection system; CBE balance sheet; Eswatini authorities; Public enterprises; Africa; Southern Africa; Global; East Africa
Cover IMF Staff Country Reports
Eswatini: Technical Assistance Report on Government Finance Statistics Mission (July 6-12, 2022)
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).
Keywords:
Government finance statistics; Public sector debt statistics; Expenditure; Public Sector; IMF's Statistics Department; E. GFS compilation; Statistics Department of the IMF; PSDS compilation process; Statistics office; Financial statements; Public enterprises; Securities; Southern Africa; Africa
Cover IMF Staff Country Reports
Kingdom of Eswatini: Request for Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director for the Kingdom of Eswatini
International Monetary Fund. African Dept.
The COVID-19 pandemic is having a severe impact on Eswatini’s economy at a time when the country is already facing deep economic challenges, and the government has begun fiscal consolidation efforts. A national lockdown to contain the spread of the virus, disruptions in supply chains, and lower external demand for key exports are curtailing economic activity. While the authorities’ policy response has been timely and proactive, the economic shock and containment policies are triggering a severe recession with significant social costs, and have created urgent balance of payments needs. The pandemic is unfolding in a context of high prevalence of HIV/AIDS and a stretched health care system, which increase Eswatini’s vulnerability.
Keywords:
ISCR; CR; financing; IMF emergency financial support; emergency financing request; authority; COVID-19 Pandemic; IMF support; financing gap; private sector financing pressure; RFI purchase; clearance strategy; Fiscal consolidation; Fiscal accounting and reporting; Africa; COVID-19; Financial account
Cover IMF Staff Country Reports
Kingdom of Eswatini: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Kingdom of Eswatini
International Monetary Fund. African Dept.
This 2019 Article IV Consultation with the Kingdom of Eswatini highlights that the financial system remains sound, although vulnerabilities are rising. Hence, bank supervision should be intensified, the early intervention regime strengthened, and plans to relax single borrower concentration regulations suspended. The paper explains that the authorities have recently taken some policy actions toward stabilizing the economy. However, reflecting expansionary spending policies and declining Southern African Customs Union revenue, public debt is still rising, domestic arrears have accumulated, and international reserves have fallen below adequate levels. Supply side and governance reforms are needed to support private investment and strengthen competitiveness. Reforms should reduce vulnerabilities to state-capture and other forms of corruption, streamline business regulations and regulatory requirements, reduce high electricity and telecommunications costs, contain wage growth, and address shortages of skilled workers. A credible medium-term fiscal adjustment plan, starting with measures to reduce next year’s fiscal deficit, is needed to bring the economy on a sustainable path. Policies should combine expenditure reductions and revenue increases that enhance long-term growth prospects. Expanding and better targeting cash transfers would help protect the poor.
Keywords:
ISCR; CR; government; deficit; SACU revenue; banking sector; government arrears; clearance strategy; intervention regime; government assets; private sector growth; Government debt management; Fiscal consolidation; International reserves; Africa; Global; Southern Africa
Cover IMF Staff Country Reports
Kingdom of Swaziland: Staff Report for the 2014 Article IV Consultation
International Monetary Fund. African Dept.
KEY ISSUES Setting: Swaziland has gradually recovered from the fiscal crisis of 2010-11, buoyed by the improved revenues from the Southern African Customs Union (SACU). Growth modestly recovered, and international reserves rebounded. Swaziland’s challenges, however, remain significant, in view of its high vulnerability to exogenous shocks and its sluggish growth performance, while facing significant social and development challenges with high unemployment and the prevalence of HIV/AIDS. Swaziland now stands at a critical juncture to strengthen its resilience to exogenous shocks, address its weak growth performance, and meet critical social and development needs. Outlook and risks: Under the status-quo policies, the outlook is for continued sluggish growth and increasing fiscal and external imbalances, reflecting low private investment, elevated government spending, and prospective decline in SACU revenues. Risks are associated with the high volatility of the SACU revenues, possible negative spillovers from South Africa (including higher policy rate and lower growth), and uncertain prospects for preferential trade agreements with the U.S. and EU. Strengthening Resilience to Shocks: Over the medium term, international reserves should be targeted at five to seven months of imports, and public debt be kept below 30 percent of GDP. This calls for a prudent fiscal policy stance, with fiscal deficit below 2 percent of GDP. Raising growth: It is essential to enhance the efficiency of the public sector and promote private sector-led growth through structural reforms including improving business climate and accelerating land reforms. Maintaining financial stability: Financial soundness indicators are generally strong. The strong growth of the nonbank financial sector in recent years calls for strengthening of supervision and regulation for the sector. Past advice: There is broad agreement between the Fund and the authorities on macroeconomic policy and structural reform priorities. With the authorities’ fiscal consolidation efforts and the improved SACU revenues, fiscal and external sustainability is being restored, consistent with staff’s advice. However, progress on structural reforms—including re-launching the privatization process, improving access to modern finance and improving the business climate—has been modest.
Keywords:
ISCR; CR; SACU revenue; Swaziland; GDP; liability positions vis-à-vis nonresident; IMF staff estimate; prudent fiscal policy stance; resilience to shock; land management reform; International reserves; Africa; Southern Africa; Global
Cover IMF Staff Country Reports
Kingdom of Swaziland: Staff Report for the 2011 Article IV Consultation.
International Monetary Fund
The fiscal crisis in the Kingdom of Swaziland emanating from a decline in revenue from the Southern African Customs Union and one of the largest public wage bills in sub-Saharan Africa has reached a critical stage. Faced with revenue shortfalls associated with slowing economic activity, uncontrolled public spending, and lack of financing, the authorities continued to deplete central bank reserves and accumulate domestic arrears. The authorities have been able to finance only a minimal amount of expenditure, including wages, utilities, and essential transfers.
Keywords:
ISCR; CR; IMF economist; government cash situation; consumer price inflation; Kingdom of Swaziland executive board meeting; IMF's appraisal; International reserves; Monetary base; Wages; Arrears; Africa; Global; Southern Africa
Cover IMF Staff Country Reports