Mbabane– Eswatini’s government debt remains at about 45 per cent of gross domestic product (GDP), below the Southern African Development Community (SADC) guideline of 60 per cent and the estimated African average of 66 per cent, Minister of Finance Neal Rijkenberg has said.
Rijkenberg said while the Government continued to borrow and repay existing loans, the country’s debt remained within a manageable range.
He said the level of debt should be assessed according to its sustainability rather than the fact that the Government was continuing to borrow.
“Governments regularly take on new loans while simultaneously repaying existing ones. What matters is ensuring that debt remains at sustainable levels,” said Rijkenberg during the latest Finance in Focus weekly update.
The minister was responding to concerns raised following a newspaper report suggesting that Eswatini’s debt was becoming excessive.
Rijkenberg said the Government was working to maintain debt at around 45 per cent of GDP, although the ratio had gradually increased over the years.
He said the Government was currently raising additional financing to settle outstanding arrears and supplier payments, but maintained that the country remained in a relatively safe financial position.
“For comparison, the average debt-to-GDP ratio across Africa is approximately 66 per cent, while SADC countries have agreed on a guideline of keeping debt below 60 per cent of GDP. At around 45 per cent, Eswatini remains comfortably below that benchmark,” he said.
Rijkenberg said keeping debt within a conservative range was important because it maintained confidence in the country and allowed the Government to access financing when required.
He said the country’s debt position also affected public enterprises and private businesses because investor and lender confidence contributed to a stable financial environment.
The minister further stated that all of Eswatini’s foreign debt remained concessional, meaning the Government had not taken commercial foreign loans from international lenders.
He said this helped keep debt-servicing costs manageable and placed Eswatini among a relatively small number of African countries without commercial foreign debt.
Rijkenberg said the Government would continue monitoring borrowing levels while balancing the need to finance public expenditure and meet outstanding financial obligations.
Discussion about this post