Minister of Finance Neal Rijkenberg insists that the country’s debt position, which stood at E38.4 billion as of May 2025, remains within acceptable limits and is not a cause for alarm.
The minister dismissed mounting concern over the country’s ballooning public debt in an interview following the launch of the latest Eswatini Economic Update by the World Bank earlier this week, where the international financial institution joined a growing chorus of concern over the country’s rising debt levels as a risk to fiscal stability.
According to the Central Bank of Eswatini (CBE), which raised concerns in its previous Monetary Policy Statement, the E38.4 billion debt equates to 40.2% of the country’s gross domestic product (GDP).
In its assessment presented during the event held at the United Nations building in Mbabane on Thursday, the World Bank called for the urgent implementation of a medium-term debt management strategy, warning that Eswatini is increasingly relying on external borrowing to finance government operations rather than transformative development.
Senior Country Economist Marko Kwaramba stated that the country’s economic growth, although relatively strong at a projected 5% in 2025, is heavily reliant on debt-financed investment in a few sectors, primarily construction and mining, which have limited impact on employment or poverty reduction.
“Debt levels are on the rise and this also requires close monitoring,” Kwaramba said, warning that the current trajectory lacks broad-based economic transformation.
On that account, the Bretton Wood institution urged government to channel more efforts into digitalisation, revenue enhancement and fiscal discipline to strengthen the long-term foundations of the economy.
Yet despite these warnings, Rijkenberg has maintained that government is managing the situation carefully.
“Our debt is rising, yes, we’re not denying that, but what we have done as a ministry of finance is trying to hold our debt-to-GDP at 41% and not go over that. That is our benchmark,” said the minister.
He emphasised that the country has consistently hovered around this threshold for the past three years, with any slight fluctuations being absorbed within the fiscal cycle.
“You can look at the latest Central Bank statistics, they show we are at 40.2%. We are trying to remain within that range and, in time, hopefully even bring it down slightly,” he stated.
The minister did not hide his frustration over what he said he views as repetitive and at times unjustified warnings from international partners.
“I get a bit frustrated myself sometimes when they say our debt-to-GDP is going up. You look at our numbers for the last three years, we’ve been at 37% and we’re kind of remaining there. As the year goes by, yes, we take on debt, but it gets back to 41% next year,” he insisted.
Rijkenberg argued that the kingdom’s debt position is modest when compared to regional peers, many of whom are grappling with debt levels well above 50% of GDP.
“It would be nice if we could take it (the debt) down, but 41% is not too bad, especially when you look at the countries around us, and maybe those entities should also give all those countries more advice,” he said.
“We believe that we’re being a lot more conservative than virtually everyone else,” he added.
Independent economists and academics have also joined the chorus of concern, raising questions about the transparency, sustainability and effectiveness of government’s borrowing practices.
Independent economist Thembinkosi Dube warned that the country is increasingly using debt to fund day-to-day operations rather than long-term development.
“In simple terms, this is like taking out a bank loan to pay your water bill. It’s unsustainable,” Dube said.
“Even the domestic market has reached its borrowing limit. Treasury bills and bonds are maxed out, and government is now turning to international lenders just to stay afloat,” he added.
He cautioned that with gross international reserves standing at E11.8 billion, enough to cover only three months of import and debt repayments taking up a growing share of the national budget, the country is losing the fiscal space needed for critical investments.
“The sad thing is that our children will have to pay for these loans, while development in the country stalls during repayment,” he stated.
University of Eswatini’s Dr Sanele Sibiya echoed these sentiments, warning that the current borrowing patterns could lead the country to breach the 51% debt-to-GDP danger zone if left unchecked.
He cited the case of the ICC and FISH project, which was initially estimated at E300 million but has now ballooned to over E7 billion, with little return on investment.
“That’s a painful sore to the nation. The fundamentals in our economy haven’t changed, and yet we are borrowing as though our revenue base has significantly expanded,” Sibiya said.
He added that while projects such as the Strategic Oil Reserve at Phuzumoya are crucial, they risk being undermined by mismanagement and poor implementation.
“The loans aren’t helping us broaden the tax base. If anything, they benefit foreign contractors more than Emaswati,” said Sibiya.
Despite these warnings, government appears set to continue on its current path as in addition to the E3.5 billion loan Bills tabled in Parliament last month, the Ministry of ICT announced at the same event that it is in ongoing negotiations with the World Bank for a USD200 million (approximately E3.7 billion) grant to support digital infrastructure and e-governance projects.
While this could offer long-term benefits in terms of modernising the economy and improving service delivery, it also raises further questions about how the country intends to manage this new injection of funds within its already strained fiscal framework.
Economists however, say the issue is not just about ratios, but also about outcomes.
“If the projects funded with this debt don’t yield structural change, inclusive growth, and jobs, then the numbers become meaningless. It’s not just about staying below 41%, it’s about what we’re doing with that money,” said Dube.
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