By Zweli Martin Dlamini

(Guest Writer)

ESWATINI Prime Minister Russell Dlamini has announced that the African Development Bank (AfDB) has approved a loan of approximately $140.6 million (about R2.4 billion) for infrastructure development aimed at stimulating the country's economy.

This funding will specifically focus on improving road infrastructure in the Lubombo and Shiselweni regions, which are critical for enhancing connectivity and supporting socio-economic development.

During a media briefing at the cabinet offices in Mbabane, Dlamini delivered the Government’s One Year in Office Performance Report. He stated: “The government charged the Ministry of Finance to expedite a national borrowing plan to direct resources to optimal investment. The AfDB’s approval of this loan is a significant step towards our infrastructure goals.”

Dlamini highlighted that the government had initiated a comprehensive review of its procurement system to eliminate bottlenecks and ensure cost-effectiveness in service delivery.

He acknowledged that efficient service delivery could not be achieved under the current limitations of the Procurement Act of 2011.

Additionally, he reported that the government had successfully reduced its debt to local companies from E2.8bn to about E700m, indicating that 75% of pending arrears were cleared within the year. This reduction is part of broader efforts to stabilise the economy.

A notable highlight from Dlamini's address was eSwatini’s recent credit rating upgrade by Moody’s Investors Service, which raised the country’s long-term local-currency and foreign-currency issuer ratings from B3 to B2.

This upgrade, announced on 25 November, reflects improvements in fiscal management and effective policy implementation by the government. Moody’s cited eSwatini’s achievement of a primary surplus in the fiscal year 2023 and expectations for continued fiscal improvement in 2024 as key factors behind the upgrade.

The agency noted that eSwatini’s commitment to fiscal consolidation and reforms has increased confidence that its debt would stabilise around 40% of gross domestic product (GDP), which is significantly lower than many similarly rated peers.

Furthermore, Moody’s praised the government’s efforts in clearing domestic arrears owed to suppliers, contributing to a more stable fiscal landscape.

Moody’s also highlighted eSwatini’s relatively high wealth levels and close economic integration with neighbouring economies as positive indicators. The stable outlook suggests that the government is expected to maintain progress in addressing fiscal challenges while preserving macroeconomic stability.

In addition, Dlamini mentioned that this credit rating improvement positioned eSwatini favourably for attracting investment and reducing borrowing costs, enhancing overall economic prospects.

Furthermore, he noted that the government was implementing several financial management systems, including the International Public Sector Accounting Standards (Ipsas) and an Integrated Finance Management and Information System (Ifmis), aimed at enhancing financial reporting and cash management.

eSwatini continues to navigate its economic landscape as a developing country in Southern Africa, relying heavily on agriculture and trade with partners such as South Africa, China, the United States (US), and the European Union (EU).

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eSwatini secures major AfDB loan for economic growth following credit rating upgrade