ESWATINI’S FISCAL DEFICIT AMONG LOWEST

 MBABANE – The country’s budget deficit does not make for riveting reading, but it is still better than some of its counterparts in the SACU region.

SACU is the Southern African Customs Union (SACU) and it is made up of Eswatini, Botswana, Lesotho, Namibia and South Africa. When presenting his budget speech in Parliament three days ago, Minister of Finance Neal Rijkenberg said the deficit for the financial year 2020/21 was budgeted at 4.5 per cent of GDP, significantly lower than the 5.9 per cent deficit for the financial year 2019/20. The budget deficit for the upcoming financial year 2021/22 is projected at 6.5 per cent of GDP, equal to E4.6bn.

decrease

“This equates to a decrease in the fiscal deficit, down from E4bn to E3.3bn. While we have been able to fund part of this through local borrowing, a large part of it has been financed through external borrowing for budget support and created enough fiscal space for us to significantly reduce the stock of arrears,” said Minister Rijkenberg.

The Eswatini figures are far better when compared to that of its regional counterparts. In his recent budget speech, Minister of Finance and Economic Development in Botswana Dr. Thapelo Matsheka said the revised forecast budget deficit for 2020/21 was P21.03 11.61 per cent of GDP. 

For South Africa, which is the regional heavyweight, the budget deficit has been revised to 14 per cent of GDP in 2020/21 in response to the spending and economic pressures of the COVID-19 pandemic. This was revealed by Finance Minister of that country Tito Mboweni last Wednesday.

analyst

An analyst shared that a budget deficit increases the level of public sector debt. Large deficits will cause national debt as a percentage of GDP to increase. A higher deficit will also lead to a higher percentage of national income being spent on debt interest payments.

Meanwhile, Business Eswatini (BE), said as representatives for the private sector, they were commending government for their commitment to the clearance and management of arrears. 

“These efforts have not gone unnoticed and will surely go a long way towards aiding the private sector and boosting confidence in government in the short-term, while enhancing efficiencies in our systems which will ensure the good health of our economy in the long-term,” said BE.

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