By Nokuphila Haji | 2025-03-14

Senators are raising concerns about government's decision to tap into the country's Stabilization Fund, questioning whether it's too soon to utilize reserves intended for emergencies.

During a budget debate, senators expressed worries about the nation's financial stability, particularly in light of declining Southern African Customs Union (SACU) receipts, which have fallen from E13 billion to E10 billion.

Senator Prince Mphatfwa questioned the timing of drawing from the Stabilization Fund, stating it was recently established and meant for dire situations. He asked, "Are we not digging into the fund too soon? What is the point of setting aside money because it appears as if we are quick to draw from the fund?" He sought assurance that the funds would be replenished to ensure the country's future survival.

Senator Isaac Magagula echoed these concerns, asking about the relationship between SACU and the Stabilization Fund. He also sought clarity on the impact of drawing from the fund on the central bank's reserves and the country's three-month import cover threshold.

Senator Lindiwe Ngwenya inquired about the government's plan to address the E3 billion shortfall from declining SACU receipts, asking whether the proposed solutions were feasible.

In response, Minister Neal Rijkenberg explained that the government had taken measures to secure better SACU receipts compared to other member countries and that Eswatini's GDP was growing faster. He described the Stabilization Fund as a "shock absorber," stating that the current E1 billion withdrawal was necessary for smooth operation. He assured the senators that SACU flows would improve, allowing for replenishment of the fund.

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