ECONOMIST Sanele Sibiya says Central Bank of Eswatini (CBE) Governor Dr Phil Mnisi’s Monetary Policy Statement highlights both resilience and vulnerability.
He noted that the strong growth and low inflation last year provided relief, but global geopolitical tensions and rising oil prices mean tougher times ahead.
Unpacking the overall implications for the country’s economy, he said businesses must prepare for higher costs and possible interest rate hikes, while consumers face rising fuel and food prices.
At the same time, he said reforms in banking, payments, fintech and financial surveillance strengthen resilience and open new opportunities.
“Overall, the country’s economy is stable but exposed, thus requiring vigilance and adaptability from both businesses and households,” Sibiya said.
He said the governor’s speech made it clear that the country’s monetary policy framework remained anchored in the Common Monetary Area (CMA) peg and the pursuit of low, stable inflation, but was shifting from accommodative.
After supporting growth with modest rate cuts in the past year, he said the bank now faces rising inflationary pressures from global oil prices, geopolitical tensions and supply chain disruptions.
This, he said, meant that the trajectory of policy was likely to tighten in the near term, with interest rates expected to rise to safeguard price stability.
At the same time, he said the framework remained data-driven and forward-looking, balancing inflation control with the need to sustain growth, protect financial stability and manage vulnerabilities in households and fiscal accounts.
“Overall, the speech signals that businesses and consumers should prepare for higher borrowing costs and rising prices, as the bank prioritises resilience in a volatile global environment,” Sibiya added.
The bank introduced new guidelines on climate risk, conduct risk and financial literacy, alongside initiatives to transition savings and credit cooperatives (SACCOs) into licensed banks.
Sibiya said businesses would face stricter governance and environmental, social and governance (ESG) requirements, while consumers gain from improved financial literacy and broader financial inclusion.
He said the Payments Switch project advanced interoperability among banks and mobile money providers, with migration to a regional low-value system planned.
As a result, he said businesses benefit from faster and cheaper transactions, while consumers enjoy greater convenience and inclusion through mobile money platforms.
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Sibiya further noted that the launch of the National FinTech Strategy and regulatory work on virtual assets marked a milestone.
He said businesses could innovate in digital finance, while consumers could gain access to new financial products, although regulation would be key to ensuring safety and trust.
“The Small-Scale Enterprise Loan Guarantee Scheme (SSELGS) supported over 2 000 loans, including E33.6 million in new guarantees in 2025/26. This provides small businesses with easier access to credit, fostering job creation and service expansion. Consumers benefit indirectly through employment opportunities and improved services.
“The bank also introduced automated FX approvals and a trade verification system to combat illicit flows, while improving Financial Action Task Force (FATF) compliance. Businesses face stricter oversight on cross-border transactions, ensuring transparency. Consumers gain confidence in the integrity of the financial system,” Sibiya further stated.
He also noted that currency in circulation rose by five per cent, with new banknotes issued featuring enhanced security, and no counterfeit notes detected.
He said businesses and consumers alike benefit from secure, reliable currency and reduced fraud risks.
He said the financial system remains sound, supported by strong capitalisation and liquidity buffers, though household debt remains high and external dependence poses risks.
“Businesses can rely on a stable financial system, but households should be cautious with borrowing as interest rates may rise.
Consumers face vulnerability to income shocks, highlighting the need for prudent financial management,” Sibiya emphasised.
