MBABANE - The Southern African Research Foundation for Economic Development (SARFED) has called for an urgent review of Eswatini’s 2026/27 National Budget.
SARFED is arguing that the budget is not fully aligned with the priorities outlined in the recent Speech from the Throne, the country’s National Development Plan (2023–2028), the Sustainable Development Goals (SDGs) and emerging global economic dynamics.
In a detailed policy brief released this week, SARFED Regional Coordinator, Dr George Choongwa, warned that the current fiscal framework does not adequately cushion the economy against escalating global risks, particularly those linked to energy insecurity and geopolitical tensions.
“More than 80 per cent of the national budget was to concentrate on cushioning the economy from external shocks like energy and oil reserves crisis due to its high dependent on the global market,” said Dr Choongwa.
In the Speech from the Throne, His Majesty King Mswati III underscored the need to strengthen and stabilise the country’s fiscal space, urging Government to reduce overreliance on Southern African Customs Union (SACU) receipts and strategically maximise national assets.
SACU revenues have historically formed a significant portion of Eswatini’s income, leaving the country vulnerable to regional economic shifts, particularly in South Africa, which accounts for more than 70 per cent of Eswatini’s trade linkages.
Dr Choongwa argues that while the budget makes allocations to key sectors such as health, education and agriculture, it does not sufficiently respond to the King’s directive to prepare for mounting global uncertainties.
“Government is doing commendable work in addressing ordinary social demands. However, the danger lies in global and regional preparedness,” he said.
According to data cited from United Nations Trade and Development (UNCTAD), global growth has been slowing over recent years. Average annual global growth declined from 4.4 per cent between 2004 and 2007 to 3.0 per cent between 2011 and 2019, with projections for 2023–2026 hovering around 2.7 per cent.
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Oil crisis threat, inflation risks
MBABANE – SARFED’s policy brief highlights the geopolitical tensions involving Iran, the United States and Israel as a major risk to global oil supply chains.
Iran accounts for a significant portion of global oil supply, and any disruption could push oil prices from around US$100 to as high as US$150 per barrel, the economist warned.
Such a spike would trigger high inflation globally, affecting food prices, transportation and production costs.
Eswatini imports more than 90 per cent of its energy needs and remains highly dependent on external oil supplies.
According to Dr Choongwa, failure to secure adequate national reserves could leave the country exposed to severe economic shocks.
“Without energy, without oil, this country would come to a standstill as experienced during the 2021 civil unrest,” he cautioned.
He further argued that the budget did not prioritise strategic oil reserves with the urgency required under the prevailing global conditions.
The policy brief also warns that countries within the BRICS bloc — Brazil, Russia, India, China and South Africa — are among key beneficiaries of Iranian oil.
A prolonged crisis could therefore negatively affect South Africa, Eswatini’s largest trading partner.
Any slowdown in South Africa’s economy would have direct consequences on Eswatini’s fiscal performance, including reduced SACU receipts, weaker export demand and potential capital flight.
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SARFED Regional Coordinator Dr George Choongwa. (Courtesy pics)