GOVT REVENUES COLLECTION UP 3.1% IN Q2

MBABANE - Government revenues reflected a 3.1 per cent increase in the second quarter of 2024, relative to the second quarter of 2023.

According to the quarterly economic bulletin, the second quarter running from April to June 2024, driving the increase were an 11.2 per cent increase in the Southern Africa Customs Union (SACU) receipts; a 2.1 per cent increase in value-added tax (VAT); and a 4.9 per cent increase in Pay As You Earn (PAYE).  Corporate tax, on the other hand, contracted by 59.1 per cent due to base effects. On execution, government expenditure declined by 6.7 per cent in 2024 Q2, compared to 2024 Q1. This decline was primarily due to a 28.3 per cent contraction in both external and internal transfers.  Other expenses, however, reflected an increase and these included ‘compensation of employees’, ‘goods and services’, and ‘capital expenditures’.  

Reserves

Meanwhile, the stock of gross official reserves was recorded at E8.030 billion in 2024 Q2, increasing by 2.4 per cent relative to 2024 Q1. The domestic reserves were enough to cover 2.1 months of imports.  In the period, the reserves benefitted from an increase in the net inflow of Rands from trade with local banks, as well the quarterly deposit of SACU receipts in April 2024. During the period under review, Lilangeni gained strength when paired against all the major trading currencies (i.e. the US Dollar, British Pound and the Euro) in 2024 Q2 compared to the previous quarter. During this period, the Lilangeni appreciated by 1.9 per cent against the US Dollar, averaging E18.51 per US Dollar in 2024 Q2 relative to E18.88 per US Dollar in the previous quarter.

Against the British Pound, the Lilangeni appreciated by 2.3 per cent, averaging E23.38 per British Pound in the quarter under review, compared to E23.93 per British Pound in the preceding quarter. Similarly, against the Euro, the local currency strengthened by 2.8 per cent, and traded at E19.92 per Euro on average relative to E20.50 per Euro in the previous quarter.  These developments were mainly driven by improved global investor sentiment on the South African post-election negotiations, which have proceeded peacefully, thus offering stability to the economy.

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