World Bank applauds SACU revenue stabilisation fund
MBABANE – Residents of Mbabane want free and fair elections for the local government elections. The residents called upon the Ministry of Housing and Urban Development to ensure that issues of boundaries are resolved immediately, to avoid spoiling the scheduled local government elections.
A concerned resident said the challenges, which had hogged headlines for years needed an honest oversight from the ministry.
The resident, who commented on condition of anonymity, said the ministry must be honest on the issue to ensure that expansions of towns were addressed before they become a national issue, yet affecting one town.
The declaration of peri-urban
MBABANE – International Monetary Fund (IMF) visiting team, led by Todd Schneider, Mission Chief for Eswatini, applauded Eswatini’s SACU Revenue Stabilisation Fund.
The team said the Eswatini Government, in establishing the SACU Revenue Stabilisation Fund which, if effectively imple- mented, should be a significant step forward in managing the swings in SACU revenue transfers and enhancing macroeconomic management.
However, the team disclosed that the downside risks continued to persist and included volatile international commodity prices, tighter global financial conditions and slowing growth in South Africa. “While considerable progress was made on controlling public finances even through the pandemic, Eswatini’s macroeconomic and financial imbalances are a source of vulnerability. Eswatini’s risk of sovereign debt distress is high.”
The team disclosed their sentiments yesterday at the Ministry of Finance, when concluding their mission in Eswatini.
The team’s mission started on February 27 and concluded yesterday. Yesterday’s main focus was on discussions for the 2023 Article IV Consultation with a broad range of counterparts from the public and private sector.
The discussions covered the performance of Eswatini’s economy since the COVID-19 pandemic and policy challenges that lie ahead. The team comprised of Nelnan Koumtingue, Can Server, Victor Davies and Todd Schneider.
Schneider, at the end of their visit yesterday at the Ministry of Finance building, shared their analyses with the media. He disclosed that Eswatini’s economy was comparatively resilient areas into fully-fledged townships has greatly affected the relations between residents and the coun- cil. “The ministry should have taken a leading role in the expansion dis- cussion to avoid the current challenges of the areas in dispute,” said the resident.
Issues
He called for the government ministry to ensure that issues of the municipalities were addressed urgently. “The inactivity of the ministry on the affairs of
through the pandemic. He said that followed a strong rebound of 7.9 per cent in 2021, real gross domestic product (GDP) growth, which stagnated in 2022, at 0.4 per cent.
He said this reflected the continued dampening effect of the civil unrest, government payment arrears, slowing growth in South Africa, and heavier than normal rainfall and industrial action on the sugar sector.
InflatIon
Schneider also disclosed that headline inflation rose to 5.6 per cent at end of 2022 due to higher food and transport prices. He disclosed that government’s fiscal deficit is projected to widen to 5.4 per cent of GDP by the end of financial year 22-23, in the wake of lower SACU revenues and higher government spending.
“In the balance of payments, the urban governments has created discomfort between residents and the councils,” said the resident. Meanwhile, the Mbabane City Ratepayers and Residents Association (MCRRA) Chairperson, Patrick Bhembe, concurred with the resident.
However, Bhembe called for residents to take full advantage of the registration extension that was made by the ministry to ensure that they had registered.
the current account balance has shifted to an estimated deficit of about 1.1 per cent of GDP as the trade balance was negatively affected by higher import prices” said Schneider.
He pointed out that the foreign reserves declined to US$449 million (E8 billion), equivalent to about 2.3 months of import cover. “The near-term outlook is positive but subject to numerous downside risks. Real GDP growth in 2023 is projected to rise to 3.2 per cent supported by agricultural production and manufacturing, and higher government capital spending” said Schneider.
He further disclosed that inflation is expected to stabilise at around five per cent. Schneider acknowledged that SACU revenue transfers were expected to roughly double in the financial year 23-24, facilitating a significant
Bhembe continued to state that registration for elections was the first key step towards local government administration role by residents. He also pleaded with residents to take full advantage of their right to vote and stand a chance to be voted into office as ward councilors.
Influence
He also pleaded with all residents who had been staying in areas around the boundaries of the city of Mbabane for six months or more, to register to influence service delivery in their areas.
Bhembe said residents had all the right to register, vote, or be
reduction in the fiscal deficit and a modest reduction in the ratio of public debt to GDP.
However, Schneider said public debt remained elevated at 45.5 per cent of GDP, domestic payment arrears after a sharp reduction in 2021 rose again in 2022 and foreign exchange reserves of the Central Bank of Eswatini were below three months of import cover.
RebuIld
He said fiscal and external buffers had fallen as a result, leaving Eswatini less prepared to counter new shocks. “Continued adjustment is needed to ensure fiscal sustainability and rebuild external buffers. A revised fiscal adjustment plan, linked to a medium-term fiscal framework, is needed to guide year-by-year adjustment” said Schneider.
He also disclosed that adjustment voted into office with a mandate of their area or ward. “Register and vote for the candidate of your choice,” said Bhembe.
He further pleaded with the residents who formed part of the city of Mbabane to think seriously and get the right person to represent their interests in the council.
The chairperson of the newly-installed committee said they were working on ensuring that the association remained the oversight entity for the council. “The association will not compete with councilors but will be an oversight body for the Municipal Council of Mbabane,” said Bhembe.
He further clarified that the council was where the office of the chief executive officer (CEO) and the mayor’s office were. “The CEO’s office works with qualified employees and the mayor with his ward councilors,” said Bhembe.
The MCRRA chairperson said as an association they were aware of issues that were showing up on the urban boundaries but said that could only be resolved through engagements.
He further shared that as a new association, they felt any development should be driven by the tripartite residents, council and the ministry.
should combine expenditure measures focused on reducing the public wage bill.
He disclosed that the wage bill, which was high by international standards and transfers to public enterprises and higher revenue by continued progress in tax administration and closing holes in the tax net. He said lower fiscal deficits should reduce pressure on the external balance of payments and create room to increase central bank foreign exchange reserves.
Successful adjustment will also rest on strengthening public financial management and more rigorous assessment of public investments. “Importantly, fiscal adjustment should come with measures to mitigate the effects on low-income households,” said Schneider.
Schneider encouraged Eswatini to facilitate private investment and strengthening competitiveness, which would be essential in lifting growth and reducing unemployment. He said continued efforts were needed to streamline licensing requirements and property registration.
Schneider said to establish a one-stop shop for businesses, bolster protection of investor rights such as contract enforcement, property, and investor rights enhanced the rule of law. He said that could also be effective in operation of the commercial court, simplify tax payment procedures, and address high electricity and communication costs.
Schneider also touched on the issue of gender-based disparities in access to education, healthcare, financial services, ownership of assets and the labor market saying it prevent women from fulfilling their economic potential hampering economic growth and development.
Schneider said addressing these disparities and enabling women to participate fully in economic activities could play an important supporting role in the shift to private sector led economic growth.
“The association will not compete with councillors but will be an oversight body for the municipality