MBABANE:Satu Kahkonen,the World Bank Eswatini Country Director says, the newly launched Public Finance Review Report will guide the collective effort with the Government particularly, in strengthening fiscal policy while fostering or promoting sustainable economic growth and development.
Satu was speaking at the Hilton Hotel in the capital city-Mbabane on Wednesday during the official launch of the Report, Dr Thambo Gina, the Minister of Economic Planning and Development, Finance Minister Neal Rijikernberg, United Nations(UN) Eswatini Coordinator George Wachira, Central Bank Governor Dr. Phil Mnisi, Business Eswatini Chief Executive Officer(CEO) Nathie Dlamini and other key stakeholders were also present during the event.
“The World Bank regularly conducts Public Finance Reviews in countries across the world, with the aim to provide robust analysis and evidence-based policy recommendations.Previously known as Public Expenditure Reviews,these reports have evolved to cover not only spending but also revenue mobilization that is a key element in ensuring fiscal sustainability and economic resilience. The review we are launching today highlights opportunities that Eswatini has to leverage fiscal policy for macroeconomic stability, competitiveness and faster economic growth.The review shows that fiscal policy could be used to address long-standing constraints to growth and improvement of living standards.Given the build-up of macroeconomic imbalances and stagnant social indicators in Eswatini, this is an opportune time to assess and consider how fiscal policy could be used better to address these challenges.It is an important and powerful policy lever that merits attention,” she said.
On another note, the World Bank Country Director said, the Public Finance Review Report has four(4) main messages that, the international financial institution would like the eSwatini Government to prioritize and/or take into consideration.
“The first message is that addressing current macro-fiscal imbalances is essential to promote investment and economic growth and to enhance resilience of Eswatini’s economy to shocks. Without macroeconomic stability growth will not come. And fiscal policy is a critical tool to ensure that stability.This is in particular the case in Eswatini where there is no full independent monetary policy hence ensuring macroeconomic stability needs to be one and a core goal of fiscal policy.The second message is that domestic revenues could be increased in Eswatini while also strengthening competition and market contestability.These dual objectives-revenue raising and stronger competition-could be achieved by rationalizing the vast array of tax holidays, tax expenditures, and procurement preferences that exist today.All these things are limiting competition and reducing revenues.Rationalizing them would level the playing field for all and thus promote competition. And such rationalization would also raise tax revenues without any increase in tax rates.In parallel, there is room to improve tax administration to reduce tax evasion and improve compliance,” said the World Bank Country Director.
But when sharing the third(3rd) and fourth(4th) key messages as contained in the Public Finance Report,Satu highlighted the need for the immediate strengthening of public financial investment management to improve the impact of eSwatini Government spending while ensuring more efficient use of resources to promote fiscal consolidation.
“The third message is that strengthening public financial and investment management would improve the impact of government spending, ensure more efficient use of resources, and promote fiscal consolidation.This could be done, for example by improving transparency and integrity of public procurement through adoption of e-procurement. Also, implementation of the Treasury Single Account and digitalization of the public sector would strengthen management of public finances. And strengthening the capacity to manage, monitor and sanctions SOEs would help improve impact of public spending,” she said.
World Bank Eswatini Country Director Satu Kahkonen says newly launched Public Finance Review Report to guide collective effort in strengthening fiscal policy for economic growth(pic: WB).