Finance

Eswatini’s rising debt complicates development spending

The Tip Desk · November 13, 2026 · 2 min read

Eswatini faces worsening debt dynamics and large employment needs, as Guyana channels oil wealth into development spending and financial savings.

Eswatini’s sharp increase in public debt has made financing substantial development needs harder to reconcile with macroeconomic sustainability, the IMF’s *Kingdom of Eswatini: 2026 Article IV Consultation* reports. The effective interest rate now exceeds nominal GDP growth, making debt dynamics less favorable. Guyana’s rapid economic expansion has been accompanied by no clear signs of overheating or resource-driven competitiveness pressures so far, the *Guyana: 2026 Article IV Consultation* finds. Together, the assessments put the financing of development at the center of two countries’ growth experiences.

Eswatini’s government has begun an expenditure-focused fiscal consolidation program following the sharp debt increase in fiscal year 2025/26. Its stated objectives are to place public debt firmly on a downward path and strengthen external buffers. The adjustment also carries contractionary effects, which the government plans to help offset by encouraging private sector participation. Private investment consequently has an explicit role in the authorities’ effort to support growth and address development needs during fiscal consolidation.

The scale of those needs is apparent in employment. Unemployment stands at about 33.5 percent overall and 52.2 percent among young people, despite economic growth accelerating to 4.9 percent in 2025. The report places these employment conditions alongside the challenge of restoring debt sustainability. Inflation remained moderate through July 2026, partly supported by the Fuel Price Regulation Mechanism, which is funded by a fuel levy. That price performance forms part of an assessment in which debt and employment remain substantial concerns.

Oil wealth supplies Guyana with resources for its development agenda. The Guyana consultation describes exceptionally rapid expansion supported by strong oil production, robust and broad-based non-oil growth, and sustained prudent macroeconomic policies. The authorities are using oil income to increase public investment and social spending in support of social development, diversification, and resilience. They are also accumulating savings in the Natural Resource Fund. Development spending and the retention of financial resources are both features of the authorities’ management of oil wealth.

Guyana’s available indicators do not point to clear overheating or resource-driven competitiveness pressures, an assessment the report partly attributes to policy measures that help contain price pressures. The qualification matters: the finding concerns conditions observed so far. The IMF calls for close monitoring and continued policy vigilance as the authorities deploy oil wealth across investment, social spending, and savings.