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ESWATINI’S EXPORT MARKET TO SPAIN HIKES EXPONENTIALLY

06/03/2023 08:12:00 Mhlengi Magongo

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MBABANE – Spain continues to be a major export partner for Eswatini as exports recorded a massive hike.

Eswatini exports mostly sugar cane and grapefruits to Spain and the kingdom is still not able to meet the market demands for exports despite the 12 938 per cent increase in exports to Spain, accounting for three per cent of the total exports from Eswatini. Eswatini Revenue Service (ERS), in their integrated annual reports, said the hike was observed presumably from a resumption of normal trade after the Covid-19 pandemic, especially for some products like sugar cane and grapefruits.

Export

South Africa (SA) also remains Eswatini’s major export partner, accounting for 69.02 per cent (E21.732 billion) of total exports in 2021/22, which was a 16.06 per cent increase compared to 2020/21. The major exports to SA were essential oils, sugar preparations and honey. The rest of the other top five export partners excluding SA were: Kenya, Nigeria, Mozambique and Zimbabwe. Essential oils recorded a sum of E9.385 billion (9.90 per cent) while ‘sugars, sugar preparations and honey’ in the sum of E6.8 billion (-3.48 per cent), and ‘chemicals materials and products’ in the sum of E4.183 billion (21.9 per cent) were the top exported classifications in 2021/22.

Imports

When it comes to imports, ERS detailed that a trade deficit (imports against exports) of E0.72 billion was recorded in 2021/22, compared to a E3.640 billion deficit in the previous year.
Total exports to the world stood at E31.472 billion which was a 10.24 per cent increase from E28.547 billion, recorded in the previous year. Total imports from the world increased by 18.21 per cent in 2021/22, valued at E32.188 billion compared to E27.230 billion in the previous reporting period. SA imports were the highest accounting for 73.55 per cent (E23. 676 billion) of total imports in 2021/22, which was a 24.45 per cent increase from the previous year. The major imported goods from SA were ‘petroleum products’ and ‘electric current’. The rest of the other top import partners were: China, India, Mozambique and the United States of America.

Worth noting, the government of Eswatini has proposed to put E1.5 billion into the Stabilisation Fund to cater for any reduced SACU receipts. The Southern African Customs Union (SACU) receipts for Eswatini are expected to increase from E5.8 billion to E11.75 billion in the 2023/24 financial year. The announcement was made by the Minister of Finance, Neal Rijkenberg, at a press briefing held by the ministry.

Out-turn

This is the highest amount that the country has ever received from the regional bloc and the minister said it was driven by a higher-than-projected out-turn of the 2021/2022 Common Revenue Pool (CRP). This reflects a 25 per cent increase in the projected size of the CRP for 2023/2024 compared to 2022/2023 and an increase in Eswatini’s share of total intra-SACU imports from 9.6 per cent in the revenue sharing framework for 2022/2023 to 10.8 per cent in 2023/2024. Rijkenberg said the volatility in SACU receipts has caused the economy to remain on an unsustainable path for a long time. For that reason, he tabled the regulations for the SACU Stabilisation Fund; he proposed to put E1.5 billion into the Stabilisation Fund to cater for any reduced SACU receipts in the future. “As this year’s budget is driven by sustainability, this fund should ensure that we remain on a sustainable path in the long term,” he said.

Revenue

Government revenue including grants in the 2023/24 fiscal year is projected to reach E24.64 billion, which is 30 per cent of GDP, an increase of about five percentage points on the 2022/23 budget. Of this, SACU receipts will contribute E10.25 billion from E5.8 billion in the previous year. Non-SACU revenue was budgeted at E13.75 billion from E12.8 billion, a growth of seven per cent. Total income taxes were projected to be E6.98 billion in 2023/24 a slight increase from the previous year’s budget. The minister said this was because of higher expected growth and employment in 2023/24 compared to 2022/23. Out of this, corporate income taxes were E1.8 billion and personal income taxes are E4.5 billion. Total taxes on goods and services are expected to be E6.13 billion. This is mainly VAT which is budgeted at E4.5 billion and fuel taxes amounting to E1.36 billion.