By Agribusiness Media Reporter
MBABANE – Eswatini’s economy closed the fourth quarter of 2025 on a relatively stable footing, with lower inflation, positive sector growth, stronger export performance, and improved foreign reserves offering cautious optimism for agribusiness and the wider productive sectors.
According to the latest Quarterly Economic Bulletin released by the Ministry of Economic Planning and Development, the domestic economy recorded positive growth across all major sectors, while inflation moderated and the trade balance remained in surplus. For agriculture and agribusiness players, the figures point to a more supportive operating environment, although concerns remain around import cover, public finances, and uneven sector credit growth.
Economy grows as all major sectors record gains
The bulletin shows that Eswatini’s economy grew by 2.1 percent on a seasonally adjusted basis in the third quarter of 2025 compared to the previous quarter, and by 6.8 percent year-on-year, with all economic sectors posting positive performance.
This broad-based growth is significant for agribusiness because it signals stronger activity not only in primary production, but also in manufacturing, transport, trade, and services that support agricultural value chains.
The primary sector rebounded strongly, growing by 11.8 percent year-on-year, reversing the contraction seen during the same period in 2024. While much of this growth was driven by mining and quarrying, forestry also made a notable contribution, showing that land-based sectors continue to play an important role in the country’s economic structure.
The secondary sector also performed well, growing by 4.9 percent, supported by a 10 percent increase in manufacturing and 13 percent growth in construction. This matters for agribusiness because manufacturing growth, especially in food processing and related industries, is central to value addition, job creation, and market expansion for farmers.
Meanwhile, the tertiary sector recorded 6.2 percent growth, driven by strong performance in ICT, wholesale and retail trade, financial services, transport, and professional services. These are all important enablers for modern agribusiness, especially as farmers and agri-enterprises increasingly rely on digital tools, logistics networks, finance, and market information systems.
Inflation eases, bringing relief to farmers and consumers
One of the most encouraging developments in the report is the moderation in inflation during the fourth quarter of 2025.
Headline inflation averaged 2.6 percent, down from 2.7 percent in the previous quarter. The slowdown was mainly attributed to a significant drop in food and non-alcoholic beverage inflation, which fell from 1.5 percent to 0.2 percent.
For households, this easing in food inflation provides some welcome relief. For agribusinesses, lower inflation can help stabilise input and operating costs while also supporting consumer spending power.
The report notes that although bread prices rose in November, these increases were offset by lower prices in other food items such as cereals, poultry, and vegetables. This suggests some improvement in food price stability, which is especially important in a country where both producers and consumers are highly sensitive to shifts in food costs.
However, not all price pressures disappeared. Housing and utilities inflation rose slightly from 4.2 percent to 4.3 percent, while transport inflation increased from -0.1 percent to 0.8 percent, driven by higher fuel, lubricants, and air transport costs. For farmers and agri-processors, transport and utility costs remain critical pressure points, especially in distribution-heavy value chains.
Credit growth rises, but agriculture still sees a decline
The bulletin also shows that private sector credit expanded during the period, supported by an unchanged monetary policy stance. Total private sector credit increased by 3.3 percent, rising from E21.693 billion in the third quarter to E22.408 billion in the fourth quarter of 2025.
Credit to households rose by 4.9 percent, while credit to businesses increased by 2.5 percent.
However, the picture is more mixed for productive sectors. Credit growth was strongest in transport and communication, distribution and tourism, mining and quarrying, and real estate. In contrast, credit to agriculture declined by 2.2 percent, while construction, community services, and manufacturing also recorded declines in some categories.
This is an important signal for the agricultural sector. While the economy may be growing, the decline in agricultural credit suggests that farmers and agri-enterprises may still be struggling to access adequate financing for expansion, mechanisation, irrigation, input purchases, or working capital. For a sector expected to contribute to food security, exports, and rural employment, sustained access to finance remains critical.
Reserves improve, but import cover still below target
Eswatini’s gross official reserves improved in the fourth quarter, rising to E11.672 billion, an 8.7 percent increase from the previous quarter. The increase was largely attributed to the October 2025 SACU receipts inflow and foreign currency transactions involving the Central Bank and local commercial banks.
While this improvement is encouraging, the report notes that the reserves were sufficient to cover only 2.8 months of imports, which remains below the internationally recommended threshold of three months.
For agribusiness, reserve levels matter because they influence exchange rate stability, import financing, and confidence in the broader macroeconomic environment. This is especially relevant for a sector that depends on imported inputs such as fertiliser, chemicals, machinery, packaging materials, and fuel.
Trade surplus strengthens as exports outpace imports
External trade was another positive highlight in the quarter.
Merchandise exports rose to E12.619 billion, reflecting 5.8 percent growth, while imports increased more modestly to E14.161 billion, up 1.5 percent. As exports outpaced imports, Eswatini recorded a trade surplus of E1.458 billion, representing a 56.2 percent increase from the third quarter.
This is important for agribusiness because export earnings remain a major pillar of the economy, particularly through agro-based commodities and processed goods.
The report indicates that export growth was largely driven by miscellaneous edibles, which increased by 43.3 percent and accounted for 41.9 percent of exports. Sugar also posted strong growth of 17.6 percent, contributing 19.9 percent of total exports.
These figures underline the continued importance of agro-processing and agricultural commodities in Eswatini’s external sector. Sugar remains one of the country’s most strategic export products, while the rise in edible products points to growing relevance for value-added food exports.
On the import side, major categories included food, capital goods, and other intermediate consumption items. This reflects the ongoing dependence of the economy on imported machinery, equipment, and production inputs, reinforcing the importance of strengthening domestic production capacity where possible.
Stronger Lilangeni offers mixed picture for producers
The bulletin further notes that the Lilangeni appreciated against major currencies during the quarter.
It traded at an average of E17.13 per US Dollar, down from E17.64 in the third quarter. It also strengthened against the British Pound and the Euro.
A stronger local currency can help lower the cost of imported farm inputs, machinery, packaging materials, and fuel-related imports. However, it can also reduce competitiveness for exporters if not matched by gains in productivity and efficiency.
For export-oriented agribusinesses, especially those involved in sugar, processed foods, and regional trade, exchange rate movements remain a key factor to watch.
What this means for agribusiness
Taken together, the Q4 2025 figures present a cautiously positive picture for Eswatini’s agribusiness sector.
Lower food inflation, improved trade performance, stronger reserves, and economy-wide growth all point to improving macroeconomic conditions. Export growth in edible products and sugar is especially encouraging for agricultural value chains.
At the same time, the decline in credit to agriculture shows that growth in the broader economy is not automatically translating into improved financing conditions for farmers and agri-enterprises. Rising transport and utility costs also remain a challenge, especially for businesses involved in input supply, processing, storage, and distribution.
Going forward, the key question will be whether the improving economic environment can be translated into stronger support for production, agro-processing, rural enterprise development, and export competitiveness.
For Eswatini’s agribusiness sector, the final quarter of 2025 suggests that the foundations for growth are present — but turning that momentum into long-term sector transformation will require targeted investment, access to finance, and continued support for value addition.
