SACU REVENUE TAKES A DIP BY 18.3%

MBABANE – The Southern African Customs U n i o n (SACU), the major contributor of government
revenue, is set to plunge by 18.3% from E7.1 billion recorded from 2017/2018 to reach E5.8 billion in 2018/201.
The Central Bank of Eswatini (CBE) requested all relevant stakeholders to give the ministry of finance and the government as a whole the direction and strength to navigate through the unprecedented fiscal challenges that are
confronting this country owing to the volatile SACU revenue. Sikhumbuzo Dlamini who is the CBE’s General Manager Policy, Research and Statistics noted, “The previous two financial years had budgets delivered on the backdrop
of devastating effects of severe drought and the resultant low economic growth.” He stated that the government
would continue with its efforts to create employment through the implementation of the industrial policy. In addition, public finance is said to be under threat as SACU revenue declines. CBE said this source of revenue
accounts for 34 per cent of total revenue and grants compared to 43 per cent the previous fiscal year. It is not the first time the kingdom of Eswatini has faced such a challenge. In 2011, the country faced similar challenges which included the struggle to pay civil servants’ salaries which accounted for over 40% of government expenditure.
In light of the low SACU revenue, the International Monetary Fund (IMF) proposed various fiscal adjustment strategies for the government. Worth noting is that due to South Africa’s worsening economic position,
it is likely that SACU revenue in the medium term will continue to fall and become a source of volatility in government’s revenue.

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