Mbabane, Eswatini, September 8, 2022—The Kingdom of Eswatini can grow its economy, create jobs, boost exports, and speed economic recovery from COVID-19 by introducing reforms to build a stronger private sector and attract investment into key sectors, according to a new report published today by IFC and the World Bank.
The Eswatini Country Private Sector Diagnostic (CPSD) highlights reforms needed to increase Eswatini’s competitiveness to unlock export potential and increase private sector participation to sustainably grow its economy. The CPSD suggests strengthening the trade and regulatory environment and reducing the state footprint in sectors that can be better served by the private sector. It also encourages private participation in key enabling sectors like telecommunications and energy.
The report outlines actions Eswatini can take to unlock the potential of four important sectors, sugar, beef, forestry, and textiles/apparel. These sectors have greater job creation and value addition potential and can help expand export markets, according to the CPSD.
The MSME sector, which accounts for 40 percent of employment in the country, could be better supported by developing regulations to foster new financial products, including digital products, and more effective programs to improve skills and capabilities.
“The CPSD provides concrete reform proposals as Eswatini recovers from the COVID-19 pandemic and looks ahead. The World Bank Group supports Eswatini to return to growth that expands job opportunities, reduces poverty and brings shared prosperity in a sustainable manner,” said Marie Francoise Marie-Nelly, World Bank Country Director for Botswana, Eswatini, Lesotho, Namibia, and South Africa.
“Eswatini can speed economic growth by supporting micro, small, and medium enterprises to thrive and by enabling the private sector to take a leading role in the economy,” said Adamou Labara, IFC’s Country Manager for Eswatini. “By focusing on export-led private sector growth and entrepreneurship, Eswatini can restore its past performance, create jobs, and sustain growth in an inclusive manner.”
Despite its lower middle-income status, Eswatini’s development challenges — high unemployment, especially among women, young people, and those in rural areas, and high poverty and inequality –mirror those of low-income countries. COVID-19 caused widespread business closures, and job and export losses, further slowing growth.
Eswatini’s economy also faces the impact of climate change, with drought threatening the country’s environmental and socioeconomic stability.
The CPSD aligns with reform commitments outlined in Eswatini’s National Development Plan 2019/20–2021/22 and its post-COVID-19 Economic Recovery Strategy. The World Bank Group is committed to supporting Eswatini to accelerate key reforms in sectors with high export and job-creating potential.