Eswatini’s E2 billion loan application to Afreximbank was recently declined after it failed to gain parliamentary approval. Finance Minister Neal Rijkenberg explained that the loan, categorized as commercial funding, was more expensive than the country’s typical borrowing arrangements, making it an impractical option for the government.
The minister shared these details during the 2025/2026 budget debate, explaining that the loan was intended to address the country’s outstanding arrears. Rijkenberg acknowledged that the nation still faced significant arrears, which created challenges for both suppliers and the ministry. He said this financial burden has been frustrating and needs urgent resolution.
In response to the setbacks caused by the loan’s rejection, Rijkenberg outlined the government’s current plans to address the arrears issue. The Ministry of Finance is now pursuing a loan from the World Bank, amounting to E1.8 billion (USD 100 million), while the African Development Bank has committed to a loan of E820.2 million (USD 45 million). Additionally, the OPEC Fund is being approached for an E107.7 million (USD 50 million) loan, and a report is being prepared for submission to the Johannesburg Stock Exchange (JSE) to close funding gaps for the current financial year.
However, Rijkenberg cautioned that these loans may not be enough to cover the funding shortfalls for the upcoming financial year (2025/26). He clarified that the government is still seeking E2 billion in loan funding to fully settle outstanding arrears. If all goes according to plan, the loans are expected to be approved by June or July of this year, and they will be concessional, providing more favorable terms than the initial commercial loan.
During the debate, Senator Linda Nxumalo raised concerns about the country’s GDP-to-debt ratio, which had been presented as high in light of the E5 billion debt financing for 2025/26. Rijkenberg responded by stating that Eswatini’s current debt-to-GDP ratio stands at 45 percent, with efforts underway to reduce it to 40 percent. He noted that while the Southern African Development Community (SADC) recommends keeping the ratio below 60 percent, the continent’s average is closer to 70 percent, meaning Eswatini still has room to maneuver.
Despite this, Rijkenberg emphasized that the country remains cautious about relying too heavily on external funding and is taking a conservative approach to ensure long-term fiscal stability. He reassured the public that Eswatini’s financial situation would improve in the coming months. Although the government has struggled to meet payment deadlines, he expects the situation to stabilize once SACU payments are received by the end of the month.
“We are aware that payments are delayed, and we understand the frustration this causes. However, by April, we anticipate being back on track,” Rijkenberg stated, assuring that all suppliers would be paid by that time. He described the delay in clearing arrears as “embarrassing” and committed to resolving the issue decisively.
