MBABANE – The International Monetary Fund (IMF) has called on Eswatini to accelerate long-overdue structural reforms.
That is if the country is to achieve sustainable, private sector-led growth that can create jobs, stimulate investment and reduce stubbornly high unemployment.
In its latest country report, released on Monday, the IMF pointed out that although Eswatini has made progress in areas such as labour market efficiency and infrastructure development since 2016, serious challenges remain in governance, business regulation and the external sector.
These issues continue to dampen investor confidence and limit the private sector’s role in driving growth.
The report highlights that reforms aimed at closing infrastructure and skills gaps, simplifying regulations, expanding access to finance and improving governance are critical to unlocking Eswatini’s growth potential. Without such measures, the country risks missing the opportunity to harness its demographic dividend and reduce poverty.
One of the most pressing challenges is the country’s infrastructure deficit.
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Reforming the business environment
MBABANE – Eswatini’s business environment remains one of the major hurdles to private sector-led growth.
The IMF report emphasised that regulatory inefficiencies continue to stifle business formation and expansion, particularly among small and medium enterprises (SMEs).
SMEs form the backbone of Eswatini’s economy, yet they face high compliance costs, lengthy procedures and limited access to credit. The IMF cautioned that unless these barriers are removed, SMEs will remain trapped in a cycle of informality and underperformance, unable to create the jobs needed to absorb new entrants into the labour market.
Recent reforms such as the ‘Government in Your Hand’ e-government platform and the ‘Business One-Stop Shop’ are seen as positive steps toward streamlining processes.
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Access to finance remains limited
MBABANE – Another significant constraint to private sector development is limited access to finance.
Bank credit to the private sector declined to just 21 per cent of GDP at the end of 2024 – considerably lower than levels seen in comparable economies.
A key barrier is the lack of collateral, which is compounded by unclear property rights and weak enforcement mechanisms. The IMF observed that although programmes such as credit guarantee schemes and a collateral registry have been introduced, their coverage remains too limited to make a meaningful impact.
Policy priorities should, therefore, include strengthening property rights, improving financial literacy among businesses and expanding credit information systems. Digitalisation could also play a role in reducing information gaps between borrowers and lenders, making it easier for firms to secure financing.
Authorities have already taken steps in this direction, offering training for SMEs on how to access finance, exploring loan guarantees and supporting microfinance initiatives. Partnerships with international organisations, such as the Food and Agriculture Organisation’s micro-lending programmes, are helping farmers access credit and improve climate resilience.
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