IMF Staff Completes 2015 Article IV Mission to Swaziland


An International Monetary Fund (IMF) team led by Jiro Honda visited the Kingdom of Swaziland during September 17‒30, 2015 to conduct the 2015 Article IV consultation with Swaziland.

At the end of the mission, Mr. Honda issued the following statement:

“Swaziland’s economic growth continues to improve since the 2010‒11 fiscal crisis, albeit at somewhat slower pace in 2015. After the fiscal crisis, growth rebounded, partly supported by manufacturing, construction and the wholesale and retail sectors, while Swaziland’s significant development challenges continue, with high unemployment and poverty. Inflation has remained modest at 4.8 percent in August 2015. Since 2014, Swaziland has shifted toward an expansionary fiscal policy, while revenues from the Southern African Customs Union (SACU) have declined in percentage of GDP. Hence, after running surpluses for two years, fiscal balance turned into a deficit in 2014/15. International reserves stood at 3½ months of imports as of end-August 2015.

“Swaziland’s economy is faced with new challenges. Specifically the recent weakening of the regional economic outlook would have adverse impacts on Swaziland through trade and financial channels. To this end, the SACU revenues are projected to decline significantly in the coming years, which raises concerns for fiscal and external sustainability. Swaziland’s key challenges are: (i) to strengthen its resilience to shocks in preparation for the expected SACU revenue fall and (ii) to achieve higher and inclusive growth and meet social and development needs.

“To prepare for the SACU revenue fall, the mission calls for fiscal consolidation efforts over the medium term, while protecting spending for critical social and development needs. Such a tight fiscal policy stance would help maintain a sufficient international reserve buffer and maintain modest debt distress. To help implement the policy, the mission encourages the authorities to enhance efforts for public financial (and investment) management reforms, while welcoming further efforts to enhance domestic revenue collection.

“The mission encourages the authorities to step up efforts to raise the country’s potential for inclusive growth in order to address social and economic challenges. To this end, the mission recognized that the loss of AGOA eligibility raises the importance of enhancing economic diversification and competitiveness. To this end, the mission highlights the importance of fast-tracking policy efforts in multiple areas to promote export diversification (through private sector development), enhance access to financing, and improve the business climate.

The mission met with the Prime Minister, Hon. Sibusiso Dlamini; Minister of Finance, Hon. Martin Dlamini; the Governor of the Central Bank of Swaziland, Mr. Majozi Sithole; the finance committee of Parliament; other senior government officials, as well representatives of the private sector and development partners. The mission would like to express its gratitude to the authorities and their staffs for the highly professional, productive, and open discussions

“The IMF Executive Board is expected to complete the 2015 Article IV consultation in November 2015.”

Source: International Monetary Fund (IMF)


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