MBABANE – In recent months, the Kingdom of Eswatini has found itself at the centre of a contentious economic debate.
Figures surfacing from various procurement watchdogs suggest that major infrastructure and development projects, currently underway or recently tendered, have been awarded almost exclusively to foreign companies.
The cumulative value of these contracts is approximately E17.09 billion.
Projects awarded to foreign entities include –
Sakhalive JV – E2.6 billion (construction of Mpakeni Dam).
Stefanutti Stocks/WBHO – E2.6 billion (MR 14 and 21 road)
GVPR Engineers – E1.78 billion (Mkhondvo-Ngwavuma Water Augmentation Project, Phase 1B Main Conveyance Pipeline)
Ingcebo JV (Stefanutti Stocks) – E2.9 billion (Central Bank of Eswatini headquarters)
Stefanutti Stocks – E400 million (construction of D29 – Luve-Lugaganeni Road)
Stefanutti Stocks – E683 million (MR25 Road – Hlatikhulu-Sithobela)
WBHO J&E JV – E2 billion (Manzini Mall)
To the casual observer, it is said that a construction crane on the horizon is a sign of progress, regardless of who owns it. Roads are paved and dams are erected.
However, a growing chorus of financial experts and economists within the kingdom are raising alarm bells.
They argue that while the physical infrastructure remains, the economic vitality required to sustain it is draining across the borders.
This phenomenon, often referred to as capital flight or economic leakage, poses a profound question for the Eswatini nation: “Is Eswatini building its future or simply renting it from abroad?”
To understand the gravity of the E17.09 billion figure, an economist and chartered accountant said one must contextualise it within the Eswatini economy.
With a gross domestic product (GDP) that hovers around the E100 billion mark, this allocation represents nearly 20 per cent of the entire country’s annual economic output.
“This is not just a line item in a budget; it is a massive transfer of wealth,” says a senior macroeconomist at a local financial institution, who requested anonymity due to the sensitivity of the matter.
“When you commit almost a fifth of your GDP to foreign entities, you are effectively outsourcing your economic growth. We are seeing the deployment of resources that could have recycled within Eswatini 10 times over, instead exiting the economy immediately upon payment.”
The sentiment is echoed by a prominent investment analyst based in Mbabane.
“The E17.09 billion represents missed opportunities on a colossal scale. Every Lilangeni paid to a foreign firm for materials, management fees and profit repatriation is a Lilangeni that is not being paid to a local contractor, a local supplier or a local worker. It is a direct subtraction from our national circulation.
“For the average person, it is understood that the concept of money leaving a country can seem abstract. After all, the money is being used to build a bridge in Manzini or a road in Siteki; how can it be leaving?” said the analyst.
To understand this, the reputable investment manager said one must look at what he defined as the concept of the economic multiplier.
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