By 
By Ncaba Ntshakala
The Minister of Finance, Neal Rijkenberg, has highlighted the significant decline in Southern African Customs Union (SACU) receipts as a pressing fiscal challenge facing Eswatini.
Speaking during his weekly Finance in Focus session, Rijkenberg provided a detailed explanation of the complexities surrounding SACU revenue collections and outlined the government’s strategies to ensure fiscal stability and sustainability amidst the declining inflows.
Rijkenberg revealed that the final figures for SACU receipts have shown a considerable reduction for the upcoming financial year, dropping from E13.04 billion in the current year to E10.4 billion in the next.
The E2.6 billion shortfall represents a substantial strain on the national budget, which heavily relies on SACU revenues to fund key government programs and services.
RELATED: SACU revenue declines by 20.4%, E2.66 billion shortfall in 2025/26
The Minister explained that SACU receipts operate on a two-year lag, meaning that while the country draws from estimated revenue throughout the year, actual trade figures only become clear much later.
This delay often results in either surplus or deficit adjustments, which can have profound impacts on fiscal planning.
According to Rijkenberg, the current shortfall is partly due to an overestimation in the previous financial year, where Eswatini received almost E1 billion more than it was entitled to.
As a result, the upcoming financial year will be marked by a deficit adjustment, which will require the government to implement prudent fiscal measures to mitigate the impact of the decline.
The Minister reassured the nation that proactive measures have been taken to cushion the blow, particularly through the SACU Stabilization Fund, which was established as a financial buffer against such fluctuations.
The SACU Stabilization Fund, which Rijkenberg likened to the “shock absorbers” of a vehicle rather than a savings fund, was initiated last year with an initial allocation of E835 million.
This year, the government has injected an additional E1.5 billion into the fund, bringing the total to over E2.4 billion. The Minister emphasized that the fund, which accrues interest over time, will be strategically utilized to bridge the revenue gap and ensure that government operations remain on a stable footing.
He assured emaSwati that the upcoming budget speech would provide a clear outline of how much will be drawn from the fund to support the economy and public services in the next fiscal year.
Rijkenberg acknowledged that Eswatini’s heavy reliance on SACU receipts remains a fundamental challenge to the country’s financial sustainability.
He noted that while SACU revenue serves as a vital contributor to the national budget, efforts must be intensified to diversify revenue streams and reduce dependency on external inflows.
The Minister clarified that the goal is not to decrease SACU contributions but rather to increase the country’s internal revenue collection capabilities to create a more self-reliant economy.
One of the key strategies being pursued to address this challenge is enhancing tax revenue generation. The Minister stressed that while increasing taxes may not be popular among citizens, it is essential to ensure that the government has adequate resources to provide essential services and drive development.
He commended the Eswatini Revenue Service (ERS) for its efforts in improving tax compliance and collection efficiency, highlighting that the entity has remained on target for the current financial year.
Moreover, Rijkenberg elaborated on the government’s approach to taxation, stating that rather than imposing higher tax rates, the focus is on broadening the tax base by ensuring that all eligible entities contribute their fair share.
He emphasized that enforcement efforts are being ramped up to bring previously untaxed businesses and individuals into the formal tax system, thereby increasing overall revenue without placing additional burdens on compliant taxpayers.
RELATED: Declaring your goods at the border helps Eswatini with its SACU receipts
In addition to revenue collection, the Minister addressed the government’s strategy regarding the supplementary budget, which is a critical component of fiscal management.
He explained that a supplementary budget is introduced to address unforeseen expenditures and budgetary shortfalls that arise during the financial year. While some countries with surplus funds can afford to allocate additional resources mid-year, Eswatini must operate within its means, necessitating a careful reallocation of existing funds.
The supplementary budget, which will be tabled alongside the national budget, will focus on reprioritizing expenditure to ensure that urgent funding needs are met without compromising fiscal discipline.
Rijkenberg expressed that the process involves identifying areas where savings can be made and redirecting funds to critical sectors, such as health, education, and infrastructure development.
Despite the fiscal challenges posed by declining SACU receipts, Rijkenberg expressed confidence in the government’s ability to navigate the situation effectively.
He highlighted that prudent financial management, coupled with proactive revenue collection measures, will help maintain fiscal stability and ensure that essential services continue to be delivered without disruption.
The Minister also emphasized the importance of transparency and accountability in public financial management, encouraging citizens to stay informed and engaged in discussions about the country’s economic future.
He emphasized the government’s commitment to maintaining open communication with the public through platforms such as Finance in Focus, where regular updates on fiscal policies and developments are provided.
