Africa’s Eswatini Kingdom plans $275m wealth fund

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Africa’s Eswatini Kingdom plans $275m wealth fund

8:45 CAT | 12 May 2025

Map: Wikimedia Commons

Legislation for the fund, drawn up with the Commonwealth’s help, is in draft form and likely to be finalised in the next three months, Neal Rijkenberg said.

The southern African Kingdom of Eswatini plans to start a sovereign wealth fund of around 5 billion emalangeni ($275 million) this year to help channel money into areas including manufacturing and agriculture, its finance minister said.

Legislation for the fund, drawn up with the Commonwealth’s help, is in draft form and likely to be finalised in the next three months, Neal Rijkenberg said. “It is something that we are really focusing on and driving very hard to get. So we need it to be perfect,” he said in an interview.

The fund will likely pool together government assets — such as certain state-owned companies, land, shares in banks and insurance companies and stakes in mines, the minister said.

It will focus on building wealth for future generations and growing the economy, Rijkenberg said. “We are hoping the wealth fund can be quite strategic in trying to crowd in private-sector investments into manufacturing production, agroprocessing, agriculture, those kinds of industries.”

Clearing arrears

The landlocked nation bordering South Africa and Mozambique, and led by King Mswati III since 1986, is also working on budget support loans to help clear arrears of about 2 billion emalangeni and address its financing gap. It estimates a fiscal deficit of 3% of gross domestic product in the year through March.

It recently secured $100 million from the World Bank and is in talks with the African Development Bank for $45 million and the OPEC Fund for International Development for $50 million, Rijkenberg said.

Formerly known as Swaziland, the country may also issue another bond on the Johannesburg Stock Exchange next month for budget support. “It won’t be a massive amount, it won’t be in the billions, but it’ll be in the hundreds of millions,” the minister said.

In 2024 it listed its first 400 million rand bond under a 4-billion-rand program on the bourse, with a coupon of 11.875%. The nation’s currency is pegged to South Africa’s rand.

Rijkenberg expects the terms of Eswatini’s next issuance to be more favorable as Moody’s Ratings upgraded the rating for its bond program on the JSE to investment grade. “This should also reduce the cost of our bonds and broaden the market,” he said in his budget speech in February.

Other highlights:

Eswatini’s 2025 economic growth forecast of 8.3% may need to be revised downward depending on the impact of US tariffs on its trading partners.

The forecast is premised on construction projects such as the International Convention Centre and Five Star Hotel and the Mkhondvo-Ngwavuma Water Augmentation Program. The latter project, its biggest capital-spending item, includes the development of the Mpakeni dam in the southern Shiselweni region that at expected completion in 2028 will irrigate 30,000 hectares of land, benefiting about 100 000 people.

The US has reinstated a third of the aid it froze as part of a global suspension earlier this year, and the government will cover about 10% of essential spending from its budget contingency fund. he US government’s Presidential Emergency Funding for Aids Relief program financed critical health staffing, systems and health commodities for HIV treatment and prevention.

Source: Bloomberg