GOVT DEPOSITS E750M INTO REVENUE STABILISATION

MBABANE - On public finances, government continues to fulfil her commitment to add a total of E1.5 billion into the Revenue Stabilisation Fund during the 2024/25 fiscal year. The Central Bank of Eswatini (CBE) Governor Dr Phil Mnisi said as such, government has already deposited a total of E750 million in two equal instalments of E375 million made in April and July 2024, when Southern African Customs Union (SACU) revenue was received. He said the total fund now stood at E1.7 billion. He said this would go a long way in cushioning reduced SACU receipts in the future.

“It will also contribute in boosting the level of reserves. We commend the minister of Finance and his officials for this positive development,” he said. The governor added that total public debt was estimated at E33.2 billion or 35.9 per cent of gross domestic product (GDP) at the end of July 2024, from E34.4 billion recorded in March 2024. He said this decline was driven by a reduction in domestic debt, offset by an increase in external debt, primarily due to the E400 million raised through the Johannesburg Stock Exchange (JSE) Listing.

Statistics

He further reported that the country’s position with the rest of the world continues to be competitive given the healthy trade balance, as evidenced by the external sector statistics. He said the country posted a wider trade surplus of E1.8 billion for the first seven months of 2024 (Jan-July), compared to a positive trade balance of E839 million for the same period in 2023.
He said cumulative exports were E23.1 billion as at July 2024, compared to E19.9 billion as at July 2023, with growth coming mainly from soft drink concentrate and sugar exports.
Dr Mnisi mentioned that imports also increased in the first seven months of 2024 amounting to E21.3 billion, compared to E19.1 billion for the same period in 2023. “Growth was recorded in imports of animal and vegetable products, machinery and electric equipment and vehicles,” he said.

Furthermore, credit extended to the private sector grew by 11.7 per cent year-on-year to reach E20.3 billion, in June 2024. The growth in credit was mainly visible in the business sector, which grew by 15 per cent to settle at E10.4 billion. The governor reported that gross official reserves accelerated to reach E10.7 billion in July 2024, covering 2.8 months of imports from E8.2 billion in July 2023. He said this development was attributed to higher SACU receipts during the 2023/2024 and 2024/25 fiscal years, as well as the ongoing strategies implemented by CBE to continually build reserves.

Position

He mentioned that as of Friday, August 16, 2024, gross official reserves stood at E10.4 billion, equivalent to 2.7 months of imports. In the short to medium term, the reserves position is expected to remain high, owing to a 11.2 per cent increase in SACU receipts in the 2024/25 fiscal year.He further reported that the banking system remains sound - with strong liquidity buffers and adequately capitalised. The sector continued to be profitable, demonstrating financial sustainability. At the same time, asset quality improved as reflected by a decrease in the industry’s non-performing loans (NPLs) ratio. The NPLs ratio declined to 7.13 per cent in March 2024 from the 7.20 per cent reported in March 2023. NPLs further declined to 6.7 per cent as at end of June 2024.

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