Country Summary

Macroeconomic performance and outlook

Real GDP growth was estimated at 1.4% in 2019, an appreciable decline from 2.4% in 2018. Economic activity was supported by growth in manufacturing and agri- culture, which stabilized following a regional drought in 2015–16. Unabated fiscal challenges impeded domes- tic demand and generated large domestic arrears that constrained private sector activity linked to government, thus inhibiting economic growth. Construction has contracted since 2017, while services weakened due to poor performance by the wholesale, retail, and public administration subsectors.

The fiscal situation remained weak, with the budget deficit estimated at 7.8% of GDP in 2019, up from 6.5% in 2018, with low revenues outpaced by elevated expenditures, particularly transfers, the wage bill, and capital outlays. Deficits are financed by central bank advances, drawdowns of reserves, and external and domestic borrowing. Public debt escalated to nearly 30% of GDP by mid-2019, raising sustainability concerns.

The current account surplus increased slightly to an estimated 2.4% of GDP in 2019 as exports recov- ered. Official reserves remained below the recom- mended three months of import cover, thereby threatening parity with the South African rand and weakening resistance to shocks. Inflation was estimated at 2.7% in 2019, down from 4.8% in 2018, as utility and food prices remained capped. Inflation is expected to remain tamed in the short term, dampened by a freeze on utility costs. Because of the falling prices, the central bank lowered the discount rate to 6.5% in July 2019 to sup- port growth. The domestic currency remained under pressure because of low investor confidence and protracted global trade tensions that have affected emerging market external positions.

Tailwinds and headwinds

Real GDP growth is projected at 2.5% in 2020, spurred by industrial growth and agricultural expansion, but is expected to slow to 1.2% in 2021. Accommodative monetary policy should boost domestic demand with increased private sector borrowing. And growth in South Africa, if sustained, will provide export receipts and Southern African Customs Union (SACU) receipts to ease fiscal constraints.

Revival of the African Growth and Opportunity Act and European Free Trade Association trade preference markets improve the outlook for textiles and meat processing. And new trade agreements will present fresh markets for eSwatini and provide an impetus to growth.

Implementing structural reforms articulated in the Strategic Roadmap for Economic Recovery and the National Development Plan (2019–22) should ease the regulatory environment, reduce business costs, support fiscal consolidation, clear domestic arrears, and eliminate structural rigidities. Infrastructure investments will sustain growth and employment. The development of agribusiness, agroprocessing, and commodity value chains will help build processing capacity.

Poverty, inequality, high unemployment (youth unemployment at 47.4%), and HIV/AIDS prevalence at 27.2% among adults ages 15–49 remain key challenges. The weak fiscal situation, exacerbated by uncertain SACU inflows against a backdrop of high spending, will aggravate macroeconomic imbalances. The continuing domestic arrears buildup and esca- lating public debt heighten fiscal risks, raise debt sustainability concerns, and potentially undermine business confidence. The tight budget regime, particularly toward growth-enhancing capital projects, will constrain domestic demand, curtail industrial activity, and thus impede faster growth. Construction, mainly government-financed road projects, remains the major casualty of the constrained fiscal environment. Slower than anticipated public finance management reforms, in particular expenditure rationalization and wage bill containment, may impede fiscal stability.

Health sector preparedness

The COVID–19 pandemic adversely impacted the capacity of the country’s public health system already encumbered with a high adult HIV prevalence rate of 27%. The 2019 Global Health Security Index ranked the country at 139 among 195 countries, with a score of 31.1 of 100, rating it among those least prepared to deal with epidemic threats with international implications. Although the country intensified efforts to prevent and manage the pandemic, including establishing its own testing center, significant gaps remain in its capacity to mitigate the socioeconomic impacts of the pandemic.

Policy responses

To reduce contagion, the government imposed a par- tial lockdown and travel restrictions, and adopted social distancing policies. An array of tax relief measures were enacted, including an E 90 million ($5 million) tax relief fund aimed at small and medium enterprises. A portion of the 2020 capital budget will be redirected toward strength- ening the health system. Fuel prices were reduced, and planned increases in electricity tariffs were deferred. Between March and May 2020, the central bank reduced the discount rate from 6.5% to 4%. It also reduced the banks’ liquidity ratio from 25% to 20% and the statutory reserve requirement ratio from 6% to 5%.

As the government prepares a post COVID–19 eco- nomic recovery plan, it should create mechanisms to help build adequate fiscal and external buffers for countercy- clical policy purposes in case of similar emergencies. It should also systematically increase, in the medium to long term, the share of the budget for investment in the public health system to build its resilience. The financial sector could leverage the measures and incentives put in place by the authorities to support local businesses adversely affected by the pandemic.

Source: African Economic Outlook 2020

Fixed Income


  • The government securities yield curve extended to 10 years with four benchmark points along the curve (3-5-7 and 10 years). 
  • It has a Medium-Term Debt Strategy which is published after the budget speech. 

Issuance strategy 

eSwatini has a Medium-Term Debt Strategy which is published after the budget speech. Strategy: enhance availability of financing, by (i) reaching out to potential investors for auctions of government securities, (ii) issuing long-term bonds at floating interest rates, and (iii) bonds linked to specific projects. 

Benchmark issues 

Benchmarks issues (3-5-7 and 10 years) are sold in the market using the auction and Swaziland’s website reopening methods. The yield curve is indicative only. The yield curve is available on the Central Bank of Swaziland 

Yield curve 

Yield curve calculation models 

eSwatini uses the Republic of South Africa’s yield curve plus spread. 

Interpolation methods 

There are no interpolation methods

Yield curve managed by 

The Central Bank of Swaziland is in charge of calculating the yield curve on a daily basis. 

Display platform 

The yield curve is available on the Central Bank of Swaziland’s website.

Challenges in building an efficient yield curve 

The government faces the following challenges in building an efficient yield curve: 

  • Illiquid and limited secondary market 
  • Narrow investor base: Swaziland does not have foreign participation 
  • Lack of transparency in pricing, especially the primary dealers 

Guide to Buying Bonds

Procedures for market participation

The primary market is open to institutional investors and individuals alike. Banks, non-bank financial institutions, stockbrokers, corporate, individuals and non-residents can all participate in the auctions. Investors must contact one of the Primary Dealers or go directly to the Central Bank to purchase Treasury bills (the process to purchase the securities at the Central Bank is more administratively cumbersome).

Foreign participation is limited, hence there were few funds repatriation after the global financial crisis.

Settlement cycle

The settlement cycle for treasury bills is T+2.


There is no capital gains tax. Interest income is subject to a withholding tax of 10% for residents but the tax rate is 0% for non-residents.

Swaziland has double taxation agreements with the following countries: the UK, the US, Germany, Mauritius and Kuwait.


Credit rating

Rating Agency

Current Rating










Standard & Poor’    





Market restrictions

Openness to international investors

The Swaziland Investment Promotions Authority (SIPA) guarantees the equal treatment between domestic and foreign investors. There are no discriminatory practices between domestic and foreign investors.

The SIPA was established in 1998 through the Swaziland Investment Promotion Act. The objective of the SIPA is to foster a job creation environment by encouraging domestic and foreign investments.

International investors may participate in the purchase of Treasury securities through Primary Dealers

Capital controls

There are no restrictions placed on the transfer of interest, profits, dividends and or other accrued income.

Restrictions on foreign exchange and profit repatriation

The Central Bank of Swaziland (CBS) is charged with monitoring the flow of foreign investment in and out of the country. It may screen and regulate foreign exchange and investments in the country.

The process of obtaining foreign exchange in Swaziland is fairly simple and straightforward. To obtain hard currency, one must apply through an authorized dealer. Rules also state that a resident holding foreign currency must sell it to an authorized agent or dealer for local currency within 3 months (90 days).

List of Primary Dealers

The primary dealers in the system are:

Nedbank Swaziland Ltd

Standard Bank Swaziland Ltd

First National Bank of Swaziland

o  Swaziland Development and Savings Bank

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