By Ntombi Mhlongo
The country’s preliminary gross official reserves figure reached E7.9 billion at the end of February 2023, lower by 9.9 per cent from January 2023 and 15.4 per cent year-on-year.
This is reflected in the Monthly Statistical Release for January and February 2023 presented by the Central Bank of Eswatini (CBE). The CBE said the decline was attributed to a net outflow of foreign currency from trades with local banks coupled with payment of the government’s fiscal obligations over the month under review.
It was stated that the reserves were, therefore, enough to cover 2.6 months of imports of goods and services, lower than the 2.9 months covered in January 2023.
Credit extended to the private sector closed the month under review at E17.4 billion, recording a month-on-month and year-on-year expansion of 0.6 per cent and 10.1 per cent, respectively. Growth was on account of all credit categories; credit to businesses, other sectors of the domestic economy, and households and non-profit institutions serving households (NPISH).
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Credit extended to businesses improved by 1.0 per cent month-on-month and 19.8 per cent year-on-year to reach E8.6 billion at the end of January 2023.
The increase in credit to businesses was absorbed by agriculture and forestry, real estate, and distribution and tourism sectors, which expanded by 3.5 per cent, 2.0 per cent, and 0.7 per cent, respectively.
It is reflected that several subsectors decreased marginally and these are; mining and quarrying (-6.0 per cent), manufacturing (-3.5 per cent), community, social and personal services (-2.5 per cent), construction (-2.4 per cent) as well as transport and communication (-0.7 per cent).
However, it was mentioned, the decrease was not large enough to surpass the increase in credit to businesses. Credit extended to other sectors increased slightly by 0.4 per cent month-on-month, however, compared to January 2022, fell by 24.5 per cent to close at E698.2 million at the end of January 2023.
The month-on-month growth was observed in credit to local government and other financial corporations, which rose by 8.3 per cent to E61.1 million and 2.3 per cent to E401.8 million, respectively.
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In contrast, credit to public nonfinancial corporations declined by 4.5 per cent to close the review month at E235.3 million. On another note, net claims on government with the banking sector depicted a month-on-month reduction of 39.2 per cent and year-on-year growth of 47.1 per cent to close the review month at E2.2 billion.
This outturn was reflective of the partial repayment of the advance from the CBE by the government. The payment was effected after receipt of the quarterly proceeds from the Southern African Customs Union pool at the beginning of January 2023.
As a result, government claims went down by 12.8 per cent month-on-month to E7.0 billion. Government deposits, on the other hand, improved by 8.7 per cent from the previous month to settle at E4.8 billion.
