Mbabane- Credit extended to Eswatini’s private sector climbed to E23.9 billion by the end of May, with businesses borrowing at a faster pace to finance expansion across key sectors of the economy, signalling growing investor confidence despite mounting fiscal and external pressures.
Latest figures released by the Central Bank of Eswatini (CBE) show that private sector credit increased by 10.6 percent on an annual basis, while lending to businesses reached E13.2 billion, driven largely by demand from agriculture, manufacturing, construction, transport and tourism.
The increase in business lending comes as the economy continues to gather momentum, recording 6.1 percent growth in the first quarter of 2026, outperforming earlier expectations and reflecting stronger activity in productive sectors.
The Central Bank said the pattern of lending suggested businesses were increasingly borrowing to invest in productive activities rather than finance consumption, pointing to improved confidence in the country’s economic outlook.
Manufacturing and construction emerged as the main drivers of growth during the quarter, with the secondary sector expanding by 13.9 percent and accounting for the largest share of economic growth.
Manufacturing rebounded to 12.4 percent growth after previous contractions, supported by stronger demand from export-oriented industries, including textiles, processed foods, chemicals and wood products.
Construction activity also stimulated growth in related industries such as quarrying, electricity generation and professional services, highlighting the sector’s wider contribution to the economy.
The services sector also recorded notable gains, with information and communication technology (ICT) expanding by 59.6 percent, while accommodation and food services grew by 27.2 percent, reflecting increased business activity and recovering domestic demand.
Despite the positive economic indicators, the Central Bank warned that significant macroeconomic challenges remain.
Public debt increased toE42.1 billion equivalent to 40.4 percent of gross domestic product (GDP), as government continued financing expenditure through Treasury Bills, government bonds and Central Bank advances.
At the same time, the country’s gross official reserves declined to E8.1 billion, providing 1.9 months of import cover, down from two months previously, largely due to government fiscal drawdowns and foreign exchange outflows.
The external sector also remained under pressure, with exports declining for a third consecutive month as weaker international sugar prices reduced export earnings, although the monthly trade deficit narrowed to E198.8 million.
Inflation edged up to 2.7 percent, driven mainly by higher fuel and energy prices linked to geopolitical tensions in the Middle East. Food prices, however, remained subdued, helping ease pressure on household budgets.
Meanwhile, the banking sector continued to demonstrate resilience despite increased lending.
Although the value of non-performing loans rose to E1.4 billion, the ratio of bad loans declined to 6.93 percent, reflecting stronger growth in total lending than in impaired assets.
The latest figures suggest that private investment is increasingly driving Eswatini’s economic recovery, even as policymakers continue to grapple with rising public debt, declining foreign exchange reserves and weaker export earnings.
For businesses, however, the expansion in private sector credit signals renewed confidence in future economic activity and a willingness by financial institutions to support investment in productive sectors of the economy.
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