ESWATINI’S E38.5BN EXTERNAL FINANCIAL ASSETS

MBABANE – In the past year, the country’s international investment position (IIP) depicted that Eswatini’s external financial assets surpassed external financial liabilities.

According to the 2020 Economic Review report released by the Central Bank of Eswatini; during the period under review, the net IIP position was valued at E12.457 billion, a percentage point higher than that of the preceding year. According to Investopedia, the difference between an economy’s external financial assets and liabilities is the economy’s net international investment position (NIIP). The NIIP provides an aggregate view of the net financial position of a country via-à-vis the rest of the world. A positive NIIP (assets higher than liabilities) qualifies an economy as net creditor. This favourable position, though subdued, according to the CBE report, was aided by a 10.2 per cent increase in the stock of foreign assets.

Higher

“This position would have been much higher had it not been the 11.7 per cent increase in the stock of foreign liabilities, which diluted the increase in assets. “As at December 2019, the stock of financial assets amounted to E38.597 billion against E35.019 billion in December 2018,” reads the report. Portfolio investment assets continued to dominate in the foreign assets basket, accounting for 43 per cent of total assets valued at E16.303 billion in the period under review, while showing a 7.3 per cent year-on-year increase. This asset class comprised mainly assets held by retirement funds in South Africa and offshore.

Receivables

Other investment assets, mostly held in the form of currency and deposits as well as other accounts receivables, amounted to E12.897 billion, increasing by 11.7 per cent from the previous year. This asset category accounted for 34.1 per cent of total foreign assets in 2019.Reserve assets, which constituted 16.7 per cent of total foreign assets in 2019, posted a decline of 2.3 per cent year-on-year to E6.303 billion and continued to be on the declining trend for the fourth year running. Direct investment assets surged by 30.5 per cent year-on-year to E2.367 billion and accounted for 6.2 per cent of total foreign assets. The stock of financial liabilities, on the other hand, increased by 11.7 per cent year-on-year to E26.140 billion in the close of 2019.

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