AfDB approves $47.5 million loan to Eswatini
The African Development Bank Group has approved a $47.5 million loan to the Kingdom of Eswatini to help the country strengthen its economy, create jobs and improve public services. The loan will support the first phase of the enhancing economic resilience and competitiveness program (EERCP) which aligns with Eswatini’s National Development Plan for 2023 to 2028.
This marks a key step in the government’s efforts to build a stronger and more competitive economy. The two-year programme will focus on long-term economic growth and recovery while helping the country deal with reduced revenues from the Southern African Customs Union and other economic pressures.
“This operation comes at a critical juncture for Eswatini as the country navigates challenging economic conditions while implementing ambitious reforms,” said Moono Mupotola, Deputy Director General for Southern Africa at the African Development Bank. “Our support will help the Kingdom build fiscal resilience while creating an enabling environment for private sector-led growth that can generate jobs for young people and women.”
Eswatini’s economy is under pressure, the country’s GDP growth fell from 5% in 2023 to an estimated 3.6% in 2024 due to severe droughts that hurt farming. At the same time, the fiscal deficit rose from 1.5% in 2023 to 1.7% in 2024 as customs revenues dropped and public spending increased.
Unemployment remains a serious concern, youth unemployment is at 48.7% while the overall rate stands at 35.4%. The government hopes to use this programme to support reforms that will grow the private sector and create more job opportunities, especially for young people.
The EERCP focuses on two main areas: improving public financial management and strengthening the country’s competitiveness. These goals are designed to support inclusive, green, and private sector-led growth.
The programme also promotes gender equality and environmental sustainability. It is expected to help lower domestic arrears, grow the private sector’s share of the economy, increase the use of renewable energy, and improve key policy scores that track fiscal and social performance.
This new loan builds on previous African Development Bank support to Eswatini including help with economic recovery, state-owned enterprise reforms and public procurement improvements. The EERCP was developed together with the World Bank which is also providing financial support.
The loan is part of a broader effort to help Eswatini meet its development goals and improve the lives of its people through lasting economic reforms.
by Princess Debrah Avenyoh
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