eSwatini Housing Finance Overview

The Kingdom has a population of 1.160 million and is largely rural, with 76% of the population residing in rural areas in self-built houses and 24% of the population residing in the main urban areas of Mbabane and Manzini. Its housing deficit is recorded at 200 000 units. The geographic spread of households in Eswatini makes the provision of basic services difficult due to the high costs involved in supplying services to rural and semi-rural households. The population growth rate is 1.04% and the urbanisation rate is 1.83%. Eswatini has a growing young population (58.5% of the total population are between the ages of 15 and 64) who predominantly reside in the main urban centres. The influx of people into the main urban centres has led to the proliferation of slums in these areas.

In 2020 Gross Domestic Product (GDP) fell -1.64%, compared to a growth of 2.2% in 2019. Eswatini’s GDP was E57.215 billion (US$3.962 billion) in 2020.10 GDP per capita in 2020 fell -2.7% in contrast to a growth of 2.5% projected before the outbreak of COVID-19. Monetary policy has been accommodative to support growth during the pandemic, allowing banks to suspend provisioning rules and to keep the same risk weights on COVID- 19-affected loans for six months.

The country’s economy relies on South Africa for 70% of its imports and 65% of its exports. This includes being reliant on South Africa for its main electricity supply, with the attendant risks of unreliability and further increases in inflation. The inflation rate is projected, in one estimate, to increase from 3.87% in 2020 to an estimated 4.55% in 2021. The Central Bank of Eswatini’s mid-year annual average inflation rate forecast for 2021, however, was 3.92%, only slightly higher than the 3.88% projected in May 2021. Contained inflation has capped housing rentals. The lending rate in Eswatini dropped in 2020 to 7,95% from 10,125% in 2019.