GOVT SEEKS E3.4BN SUPPORT

MBABANE – Government is crossing its fingers in anticipation of about E3.4 billion financing from the International Monetary Fund (IMF).

The money, according to Minister of Finance Neal Rijkenberg amounts to US$207 million. The minister made this announcement yesterday afternoon during a press conference held at the Cabinet Offices. The request before the IMF Board, according to the minister, is expected to take place this morning (United States time zone) and the outcome will be communicated soon after.

Breakdown

Giving a breakdown of the requested finances, the minister said US$107 million (E1.7 billion) was anticipated to come from the IMF, while the balance of US$100 million (E1.6 billion) would come from the World Bank and African Development Bank (AfDB) respectively. The figures were calculated based on yesterday’s exchange rate of the Lilangeni to the US Dollar, which stood at E16.44. The minister said Eswatini, like all other countries around the globe, had been affected and impacted significantly by the coronavirus pandemic and to this end, government had lodged a request for budget support from the IMF under the RFI purchase window.

Cushion

He said if approved, which they were anticipating it would, the facility would  avail funds to cushion the budget and help address urgent balance of payment needs created by the COVID-19 pandemic. The minister said while part of the budget financing needs would be covered in the domestic market, it was estimated that an additional US$207 million (5.3 percent of GDP) was required to close the fiscal financing gap for the year. “The public is informed that an official request for budget support has already been submitted and motivated by the minister of Finance, supported by the Planning and Budgeting Committee (PBC) to the IMF,” said Rijkenberg.

The minister said the scourge had severely affected Eswatini’s economy, exacerbating pre-existing economic challenges and hindering government’s efforts to preserve fiscal sustainability and support recovery from previous shocks.

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