‘SACU RECEIPTS TO DECLINE BY 18.3%’

MBABANE – SACU, the major source of government revenue, is set to decline by 18.3 per cent from the E7.1 billion recorded in 2017/18 to E5.8 billion in 2018/19.

SACU stands for the Southern African Customs Union. Central Bank of Swaziland (CBS) Governor Majozi Sithole said this source of revenue accounts for 34 per cent of total revenue and grants compared to 43 per cent the previous fiscal year. “Total expenditure is estimated to decline from E21.7 billion in 2017/18 to reach E21.6 billion in 2018/19 as a result of undertaking expenditure rationing to prioritise only the most pressing concerns,” said Sithole when presenting his monetary policy for the 2018/19 financial year. Sithole said budget deficit without adequate financing remained a major concern as it exerts pressure on the domestic economy. He said it tends to lead to cash flow challenges, which, in turn, result in accumulation of arrears.

“Preliminary figures for the period ending March 31, 2018 indicate that total public debt stood at E12.8 billion, an equivalent of 20.6 per cent of GDP reflecting a 13.3 per cent increase from E11.3 billion recorded in March 2017.
“The surge was mainly driven by domestic debt issuances during the period,” said Sithole. Accordingly, domestic debt increased from E6.1 billion in March2017 to reach E7.7billion in March 2018 corresponding to 11.9 per cent of GDP.  External debt remained unchanged at E5.2 billion corresponding to 8.3 per cent of GDP during the review period. During the 2017/18 fiscal year, government in conjunction with the Central Bank of Swaziland (CBS) (as agent to government) listed in the Swaziland Stock Exchange (SSX) a E2 billion first ever Infrastructure Bond Programme in mid-July 2017.

The Programme was expected to run between three and five years where government would be tapping into the market at regular intervals when there was a need to finance the projects stipulated in the accompanying Prospectus. The Programme will run concurrently with the normal (Plain Vanilla) Issuance Programme (where E2 billion was also listed in the SSX) as both issuances play different roles towards the development of the domestic financial market and the economy at large. The Programmes had a total of E834.1 million raised as at March 31, 2018 indicating an allotment rate of 69.5 per cent. “Treasury bills issuances continued in 2017/18 and were mainly used to finance government cash shortfalls,” added Sithole.

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