MBABANE – Local financial watchdogs have been called to strengthen oversight, improve data quality and expand surveillance as the financial sector grows increasingly complex.
The International Monetary Fund (IMF) has called for far-reaching reforms to Eswatini’s financial sector oversight, warning that stronger regulation, improved reporting standards and closer collaboration between regulators are becoming increasingly important as non-bank financial institutions continue to dominate the country’s financial system.
In its latest Technical Assistance Report released last Friday, following a mission conducted in May 2025, the IMF outlined an extensive roadmap aimed at strengthening financial sector surveillance, improving monetary policy analysis and enabling authorities to better detect emerging financial risks before they threaten economic stability.
Unlike previous assessments that concentrated largely on commercial banks, the IMF argues that Eswatini’s rapidly expanding pension funds, insurance companies, credit providers, collective investment schemes and savings and credit co-operatives now warrant significantly greater regulatory attention because together they account for the majority of financial sector assets.
According to the report, other financial corporations now account for approximately 66.2 per cent of the country’s financial sector assets, excluding the Central Bank of Eswatini (CBE), while commercial banks account for just 27.9 per cent, signalling a structural shift in the country’s financial landscape.
The IMF noted that while Eswatini’s banking sector remains stable, policymakers require much more comprehensive information from the broader financial sector to accurately assess vulnerabilities, liquidity conditions and systemic risks.
Calls for pension sector reforms
MBABANE – The International Monetary Fund (IMF) also identified weaknesses in the reporting framework governing pension funds.
While pension funds regularly submit information on their investment assets, reporting on liabilities remains inconsistent because existing legislation requires actuarial valuations only once every three years.
The IMF argues that this creates significant information gaps regarding the financial position of pension schemes.
It recommends updating the regulatory framework so pension funds provide more frequent actuarially based liability reporting, allowing regulators to obtain a more accurate and timely picture of their financial health.
Improved liability reporting would also strengthen oversight of one of the country’s largest pools of long-term savings.
Meanwhile, insurance companies are also expected to provide much more detailed financial information under the IMF recommendations.
The report found that some insurance assets currently combine different financial instruments into broad categories, making accurate analysis difficult. The IMF recommends revising reporting templates so loans, debt securities and other financial assets are clearly distinguished while improving explanatory guidance to ensure institutions report data consistently.
Greater transparency, the report says, would improve financial surveillance while allowing regulators to better assess exchange rate exposure and sectoral risks.
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