‘ESWATINI SACU RECEIPTS TO DECLINE 25%’

EZULWINI – The country expects a decline of at least 25 per cent in SACU receipts a result of reduced economic activity in the region caused by COVID-19.

SACU is the Southern African Customs Union made up of Eswatini, Lesotho, Botswana, Namibia and South Africa. It is a major source of revenue for the country. Minister of Finance Neal Rijkenberg estimated the decline in SACU revenue to be as high as 25 per cent but said it would not be very soon.

The minister was speaking during the presentation of the annual monetary policy statement by Central Bank of Eswatini (CBE) Governor Majozi Sithole at Royal Villas at Ezulwini yesterday. The event was themed, ‘Ensuring price and financial stability to support economic growth in times of COVID-19.’
“We’re fortunate it won’t affect us next year, but the year after. We’re not 100 per cent sure on how much that effect would be but it might be around 25 per cent if not worse,” said the minister.

Revenue

For 2019-20, SACU receipts for Eswatini increased from E5.8 billion to E6.3 billion and contributed about 36 per cent to the total revenue, which is equivalent to nine per cent of gross domestic product (GDP).

Traditionally, South Africa, who has equally been hardest hit, is by far the biggest contributor to the shared revenue pool, reaching as high as 97 per cent contribution. For 2018-2019, the pool distributed about E98 billion, with South Africa receiving E44 billion.
According to the current financial year projection, the country expects E8.3 billion from SACU revenue

 The minister, in response to a question on the sectors they needed to focus on for recovery, said government was coming up with accelerators in response to the COVID-19, and were related to the strategic road map. The interventions will spell out what will be done in the next 18 months.  They will be ready in the next few weeks.  The minister commended the partnership between the private sector and government in working on the recovery strategy.
Governor Majozi Sithole, on the other hand, had stressed on the need to ensure that reserves were at four months of imports cover. One common rule of thumb is that reserves that can cover three months’ worth of imports are adequate.

Yesterday’s event brought together various stakeholders who included representatives from the Eswatini Banking Association (EBA) and the business community.  They included Business Eswatini CEO Nathi Dlamini and FESBC Vice President Hezekiel Mabuza. FESBC is the Federation of the Eswatini Business Community. The former had wanted clarity on the recent report by Moody’s and it was reported that the B2 negative outlook was maintained.

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