In-Depth Analysis
eSwatini
Landlocked eSwatini is ruled by Africa’s last absolute monarch and most of its people are dependent on subsistence agriculture. Large amounts of unwarranted state spending blemish the country’s reputation along with its foreign investment appeal. Key macroeconomic indicators have underperformed in recent years, mainly owing to the widening fiscal deficit. While disruptive political change at some point seems certain, it does not look imminent.
eSwatini’s already stumbling economy is set to be hard hit by the global and domestic effects of efforts to contain the spread of Covid-19. In addition to domestic containment measures, the country has felt the effects of border closures and the lockdown in neighbouring South Africa. eSwatini is deeply dependent on South Africa as its primary trade partner, both for Southern African Customs Union (Sacu) revenues to feed its fiscal account and boost its international reserves, as well as for remittances. eSwatini’s economy is projected to contract by 8.1% this year, followed by a protracted U-shaped recovery. The economic effects of Covid-19 are expected to further challenge the country’s already stretched fiscal position and increase debt sustainability concerns. There has been no progress on reform in the past quarter (and only sluggish reform for some years), and so our overall political risk assessment remains unchanged at upper moderate with the trend negative. (Source: eSwatini Quarterly Update, published June 2020)
Macroeconomic Data
(2019)
|
Fiscal Balance (as a % of GDP) |
-9.5 |
|
Consumer Price Index (% change y-o-y, avg) |
2.6 |
|
Current Account Balance (as a % of GDP) |
4.3 |
|
Real GDP (annual % change) |
1.3 |
|
GDP per Capita, US$ |
3,973.8 |
|
Import Cover (months) |
2.7 |
|
Population, million |
1.1 |
| Total External Debt (as a % of GDP) |
11.9 |