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Government writes off arrears from stalled projects amidst mounting financial pressures

By Ncaba Ntshakala

The Ministry of Finance’s report for the first quarter of the 2024/2025 financial year reveals that the Eswatini government is grappling with significant financial burdens due to arrears from projects that failed to materialize.

These unpaid liabilities have exacerbated liquidity challenges within the public sector which has prompted the Ministry to take decisive measures set at alleviating the strain.

The government, in a bold policy move, has decided to write off arrears directly associated with projects that never took off. This decision, outlined in the report, is part of a major strategy to streamline fiscal management by clearing non-productive liabilities that have been weighing heavily on the public sector’s finances. The Ministry of Finance has expressed the importance of this write-off initiative in relieving financial pressure and setting the stage for more sustainable fiscal practices.



To further mitigate the risk of accumulating new arrears, the Ministry has introduced stringent controls on new expenditures. These measures include rigorous project evaluation criteria designed to ensure that only viable and well-assessed projects receive funding. The report also asserts that enhanced oversight mechanisms have also been put in place to monitor financial management closely, thereby preventing the recurrence of similar financial challenges.

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However, the report highlights that despite these proactive steps, the challenge of reducing existing arrears remains significant. The liquidity constraints faced by the government continue to pose hurdles in effectively managing and decreasing these arrears.


With limited financial resources at its disposal, the report shares that the government is compelled to prioritize expenditures and strategically allocate funds carefully. This delicate balancing act is essential to addressing the outstanding arrears while maintaining the delivery of essential services to the public.

The Ministry of Finance’s report further acknowledges the complexity of the situation. While the decision to write off arrears and implement expenditure controls marks a proactive approach to fiscal management, the path to overcoming liquidity challenges and reducing existing arrears is fraught with difficulties.

Minister of Finance Neal Rijkenberg

The government has said that it recognizes that sustained efforts, coupled with prudent financial strategies, will be required to achieve fiscal stability.

Economist warns of long-term risks despite Government’s write-off of arrears

An economist, speaking on condition of anonymity, has raised concerns about the long-term implications of the Eswatini government’s recent decision to write off arrears from stalled projects.

While acknowledging the immediate relief this measure might bring to the government’s strained finances, the expert warns that it could mask deeper, more systemic issues that require urgent attention.



According to the economist, the government’s move to clear non-productive liabilities is a pragmatic response to the mounting financial pressures highlighted in the Ministry of Finance’s first-quarter report for the 2024/2025 financial year.

However, the source cautions that this approach, while beneficial in the short term, might not address the underlying causes of the arrears. “Writing off these debts may provide temporary relief, but it doesn’t solve the root problems that led to these projects stalling in the first place,” the economist stated.

The economist expressed concerns about the effectiveness of the stringent expenditure controls introduced by the Ministry of Finance. These controls are aimed at preventing the accumulation of new arrears and involve rigorous project evaluation and enhanced oversight mechanisms.



However, the economist questioned whether these measures would be enough to prevent a recurrence of the financial mismanagement that has plagued previous projects. “Without addressing the governance and accountability issues within the project approval and funding processes, we might see similar problems arise in the future,” the economist warned.

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One of the key challenges highlighted by the economist is the persistent liquidity constraints that the government faces. The expert noted that while the write-off might ease some immediate pressures, it does little to improve the overall liquidity situation. “The government is still in a difficult financial position. Liquidity constraints mean that even with the write-off, there’s limited room to manoeuvre when it comes to funding essential services and new initiatives,” the economist explained.



The economist also pointed out the potential risks associated with the government’s reliance on write-offs and expenditure controls as a fiscal strategy. “This approach could lead to a dangerous precedent where the government feels compelled to write off more arrears in the future, rather than addressing the systemic issues that cause these projects to fail. It’s a temporary fix, not a sustainable solution,” the source said.

Furthermore, the economist urged the government to focus on long-term financial strategies that go beyond immediate relief measures. “While the decision to write off arrears might be necessary in the current context, it’s crucial that the government also works on improving project planning, execution, and financial oversight to avoid falling into the same traps in the future. The focus should be on building a more resilient and accountable financial system,” the economist concluded.

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