BY MBONO MDLULI
MBABANE– While Eswatini’s latest fiscal projections show a widening budget deficit over the medium term, the figures also reveal encouraging signs of economic growth and revenue expansion that could provide a strong foundation for long-term stability.
According to the Comparative Budget Summary of 2023/24 to 2028/29, which is within the Govenrment of the Kingdom of Eswatini Budget Estimates for the years from April 1, 2026 to March 31, 2029, the most positive development in the outlook is the steady rise in revenue. Total revenue (excluding grants) is projected to grow from E25.16 billion in 2023/24 to E34.28 billion by 2028/29. When grants are included, total revenue and grants are expected to increase from E25.73 billion to E34.52 billion over the same period.
This consistent upward trend suggests improved revenue collection, expanding economic activity and stronger fiscal capacity. Supporting this trajectory is projected GDP growth, with the economy expected to expand from E86.79 billion to E117.34 billion by 2028/29. Sustained economic growth of this scale provides Government with a broader tax base and greater potential to strengthen public finances.
Another notable positive is the strong commitment to capital expenditure. Infrastructure spending is projected to rise significantly, from E5.34 billion in 2023/24 to E13.45 billion by 2028/29. Increased investment in infrastructure — such as roads, energy, water systems, schools and health facilities — can stimulate job creation, attract private sector investment and enhance long-term productivity. If well targeted and efficiently managed, such investment can accelerate economic growth and ultimately generate higher future revenues.
However, despite these positives, the fiscal imbalance presents a serious concern. Total expenditure is projected to rise much faster than revenue, reaching E46.93 billion by 2028/29. As a result, the budget deficit is expected to widen significantly — from E1.47 billion in 2023/24 to E12.42 billion by 2028/29.
A deficit of this scale will require substantial borrowing, including foreign loan drawdowns and domestic financing. While borrowing to finance productive capital investment can be justified, persistent and expanding deficits raise concerns about debt sustainability, rising interest costs and long-term fiscal vulnerability.
If not carefully managed, increasing debt levels could crowd out social spending in the future and place pressure on future generations.
Possible Solutions
To address the deficit while preserving growth momentum, a balanced and disciplined approach will be required:
- Strengthen Revenue Collection Without Overburdening Citizens
Enhancing tax compliance, broadening the tax base and improving efficiency in revenue administration can increase collections without necessarily raising tax rates. - Prioritise High-Impact Capital Projects
Capital expenditure should focus on projects with clear economic returns — particularly those that boost productivity, exports and private sector development. Rigorous project appraisal and monitoring will ensure value for money. - Contain Recurrent Expenditure Growth
While service delivery must be protected, careful management of the public wage bill and operational costs can slow expenditure growth without undermining essential services. - Promote Public-Private Partnerships (PPPs)
Leveraging private sector financing for infrastructure can reduce direct pressure on the national budget while accelerating development. - Support Economic Diversification
Expanding sectors such as manufacturing, agriculture value addition, tourism and digital services can strengthen resilience and expand the revenue base. - Debt Management Strategy
A clear medium-term debt strategy focused on concessional borrowing, longer maturities and prudent refinancing will help maintain sustainability.
In conclusion, the fiscal outlook presents both opportunity and challenge. The rising revenue trajectory and ambitious capital investment programme demonstrate a forward-looking development agenda. However, disciplined fiscal management, improved efficiency and strategic economic reforms will be essential to ensure that growth ambitions do not compromise long-term financial stability.
(Courtesy Pic)
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