Eswatini’s economy is growing faster than South Africa’s, according to new international forecasts, but analysts warn that underlying structural risks could limit the benefits of this growth.
Recent projections from the World Bank show that Eswatini’s economy is expected to expand at a rate above 4%, while South Africa’s growth remains closer to 1%. The stronger performance places Eswatini among the faster-growing economies in the region, despite its smaller size and limited domestic market.
The growth is being supported by improved performance in manufacturing, services, and agriculture, as well as recovery from earlier economic disruptions. Public investment and regional trade have also contributed to the upward trend.
However, the same reports caution that growth alone does not guarantee broad economic relief. The World Bank notes that job creation has not kept pace with economic expansion, particularly for young people entering the labour market. As a result, unemployment remains high even as headline growth figures improve.
The International Monetary Fund echoes this concern, warning that Eswatini’s economy continues to face structural constraints. These include limited private sector diversification, high operating costs for businesses, and dependence on external factors such as regional demand and imported inputs.
Analysts also point to fiscal pressure as a continuing risk. While revenues have stabilised, spending demands remain high, especially in areas such as wages, infrastructure, and social services. Without careful management, these pressures could narrow the space for growth-supporting investment.
Government officials say efforts are underway to strengthen economic resilience. Policy measures focus on improving the business environment, supporting small and medium enterprises, and investing in infrastructure that can unlock private sector growth. Authorities have also highlighted the importance of digital transformation and energy security in sustaining long-term expansion.
Regional economists caution that the contrast with South Africa should be viewed carefully. While Eswatini’s growth rate is higher, the country remains highly interconnected with its neighbour. Any slowdown or shock in the South African economy can still affect trade, employment, and revenue flows into Eswatini.
The latest outlook suggests that Eswatini is in a period of relative economic momentum, but one that remains fragile. Analysts agree that sustaining growth — and turning it into jobs and higher incomes — will depend on addressing long-standing structural challenges rather than relying on favourable short-term conditions.
For now, the data shows a mixed picture: stronger growth than the region’s largest economy, paired with risks that continue to shape everyday economic realities.
