Times Of Swaziland: ESWATINI STRIVES TO STAY ON SUSTAINABLE PATH - NEAL

ESWATINI STRIVES TO STAY ON SUSTAINABLE PATH - NEAL
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Nhlanganiso Mkhonta on 04/09/2024 18:41:00


MBABANE – The Minister of Finance, Neal Rijkenberg, says the country barely
manages to get into sustainable territory, but they are fighting to be in that
territory and put confidence in the economy.
He said many of the local investors and companies were finding comfort in the
fact that the country no longer has the high fiscal deficit, as that would mean
the country’s debts were growing and at some point, it failed to pay those
debts. Rijkenberg indicated that the country was coming from a very difficult
time where expenditure was higher than the money it had. He said in government
terms, they call that a fiscal deficit, being the gap between the money that one
spends and the money one has and for the country, that included the taxes
collected and the SACU receipts, among other government revenues. The minister
made these remarks through the new platform called Finance in Focus. This is a
platform created through the Ministry of Finance’s social media pages, where
the minister would be through video clips helping the nation understand what is
going on in the financial space.
Analysis
Rijkenberg said the analysis would be broken into two areas, namely, the
macro-governmental fiscal point of view and the second element being how it
affects the man on the street and maybe to advise emaSwati out there on how they
could survive under the current situation. He said around 2018, that gap was
around 7.5 per cent to the country’s gross domestic product (GDP), being all
the money that flows to the country and the money spent internally and
externally. The minister said during that time, the country’s GDP was around
E90 billion.
He said the problem with the high deficit was that it meant that the country was
taking a lot of debts to keep up with its expenditure.
Interest
He said unfortunately, the debt-to-GDP ratio in the past 10 years or so was
around 20 per cent to GDP and now it was hovering at around 36 per cent. He said
they were trying to keep that debt-to-GDP ratio below 40 per cent, which is a
very healthy space when one looks at other countries. He said the country was
still paying a lot in interest for the loans it was servicing.
The minister said what they have done over the years was to reduce the fiscal
deficit, as it is now sitting at around 1.69 per cent. He said it was worth
noting that this was a bit higher than the recommended ration by the World Bank.
He said this was simply because government was currently putting some money into
the SACU Stabilisation Fund, which government was taking out before counting the
fiscal deficit ratio.
Revenue
“However, the IMF and the World Bank are saying that money should be part of
government revenue,” he said. Rijkenberg said, therefore, the said global
lending partners were rating the country’s deficit ratio at 0.4 per cent,
which is very low. He said, therefore, being below 2 per cent, it meant the
country was on a sustainable path, which meant that the country’s debt-to-GDP
ratio was not growing.