MBABANE – Eswatini’s economy strengthened significantly in 2025, but the recovery remains vulnerable to fiscal pressures, weak private-sector financing and external shocks.
This is according to the African Development Bank (AfDB) Country Focus Report 2026.
The report says real gross domestic product (GDP) growth accelerated to an estimated 4.6 per cent in 2025, from 3.0 per cent in 2024, supported mainly by services, construction and increased public investment.
However, the AfDB cautions that the stronger growth performance does not yet represent a broad structural transformation of the economy, with much of the expansion being driven by cyclical factors, particularly import-intensive public spending.
The report, titled Mobilising Eswatini’s Development Financing at Scale in a Fragmented World, identifies resilience as a central feature of the country’s economic trajectory, but says that this resilience remains fragile because of structural constraints within the economy.
It points to a narrow production base, weak transmission of credit to the private sector and high levels of informality as some of the factors limiting private-sector dynamism and domestic resource mobilisation.
“Economic growth strengthened in 2025, but remains constrained by fiscal and financing pressures,” the report states, while noting that medium-term prospects remain positive, but exposed to climate and external risks.
According to the report, services remained the main engine of growth during 2025, with wholesale and retail trade, transport, information and communication services and financial activities supporting economic expansion.
Construction also rebounded as delayed public infrastructure projects progressed, while manufacturing recorded modest gains.
The AfDB said export-oriented sectors, including sugar, textiles, forestry and food processing, benefited from stable regional demand and improved performance.
Agriculture also partially recovered following improved rainfall and expanded irrigation, although mining activity remained subdued.
On the demand side, increased public investment was a major contributor to growth, alongside a gradual recovery in private investment.
Capital projects in transport, water, energy and social infrastructure generated spillovers into construction and services.
However, the report highlights an important limitation: The import-intensive nature of public investment reduced the amount of value generated domestically.
“While public investment generated important spillovers to construction and services, its import-intensive nature limited domestic value addition,” the report says.
Higher imports linked to capital spending also offset export gains, meaning net exports contributed little to overall growth.
The AfDB consequently argues that Eswatini needs to strengthen domestic value addition, improve export competitiveness and reduce its reliance on import-intensive sources of growth.
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