ECONOMIC LANDSCAPE THRIVES AMID 2024 CHALLENGES

MBABANE - 2024 has been a year of remarkable strides for Eswatini's business landscape, showcasing resilience and innovation in the face of structural hurdles.

From economic growth to digital transformation, the kingdom has laid a foundation for sustainable progress while addressing key challenges. Eswatini's journey is far from over, but 2024 has proven to be a pivotal year, demonstrating the kingdom's potential to thrive in an increasingly competitive global economy. The World Bank and the International Monetary Fund (IMF) kept their projections for the country’s economic growth up for 2024 and 2025.

The country’s economy continued its upward trajectory, growing by an estimated 4.9 per cent in 2023 and maintaining a projected growth rate of 4.5 to 5 per cent in 2024. Eswatini’s economic prospects for 2024 remained favorable, partly because of higher Southern Africa Customs Union (SACU) revenues. Record-high revenues from SACU helped narrow the fiscal deficit to 1.5 per cent of GDP for the 2024/25 fiscal year, though future SACU receipts remain uncertain. The sugar and beverage concentrate industries remained pillars of the economy, bolstered by significant growth in tourism and communications sectors.

In the months of January to September 2024, Eswatini recorded a wider trade surplus of E3.129 billion compared to E2.097 billion documented in the same months of the previous year. ccording to the Recent Economic Developments (RED) report from the Central Bank of Eswatini (CBE), exports for the three quarters of 2024 stood at E31.105 billion, far exceeding exports for the same cumulative 3 quarters of 2023 which were a lesser E27.248 billion. Growth being evident in soft drink concentrates and sugar exports, which are benefiting from elevated global prices. Imports for the months Jan-Sep also exhibited growth from E25.150 billion in 2023 to E27.975 billion in the same months of 2024.

In a major leap forward, Eswatini embraced digital transformation in 2024, particularly in e-government services. The government focused on streamlining interactions with businesses and citizens through digital platforms, aiming to enhance efficiency and accessibility. These efforts mark a significant step toward modernising public service delivery and encouraging private sector growth. On trade and investment prospects, to capitalise on regional trade opportunities, Eswatini developed the AfCFTA National Implementation Strategy 2024–2028. This initiative aims to boost intra-African trade while empowering women, youth, and marginalized groups in business. The strategy underscores Eswatini’s commitment to diversifying its economy and integrating into the broader African market.

Eswatini’s membership in several trade agreements presents significant opportunities for its private sector, including market access and diversication, thereby, offsetting the small domestic market. However, the country has not been able to optimally utilize the existing preferential trade agreements, due to inadequate capacity to consistently meet the supply needs of its markets. Deepening regional integration and leveraging trade links will be critical for private sector, export-led growth. To achieve this, Eswatini needs to work with other members of regional trade zones to help lower barriers to trade, and address key infrastructure gaps, especially around transportation and connectivity.

The immediate focus for Eswatini is to take advantage of preferential access to the African market under the AfCFTA, to support its structural transformation. This entails maximising on the sectors where the country currently possesses competitive strength, whilst putting the building blocks that will allow for increased volumes and diversity of exports in both goods and services. Despite high interest rates, credit extended to businesses and households increased, indicating some uptick in economic activity.

Furthermore, the country was upgraded in the Moody’s rating from a junk status to an investment grade listing, making it a favourable investment target and reducing the cost of borrowing. This upgrading will ensure that the country’s benefit from the Johannesburg Stock Exchange (JSE) listing is optimised. Looking ahead, As Eswatini charts its path forward, the focus on structural reforms, digitalisation and regional integration will be crucial. Policymakers and stakeholders must work collaboratively to ensure that the progress made in 2024 translates into sustainable economic development.

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