The Kingdom of Eswatini is set to establish a sovereign wealth fund valued at approximately 5 billion emalangeni ($275 million), a strategic move to channel investments into key sectors such as manufacturing, agro-processing, and agriculture. Finance Minister Neal Rijkenberg announced the initiative, emphasizing its potential to build wealth for future generations and stimulate economic growth in the landlocked southern African nation.

Draft legislation for the fund, developed with support from the Commonwealth, is nearing completion and expected to be finalized within the next three months. “This is a priority we are driving hard to perfect,” Rijkenberg said in an interview. The fund will consolidate government assets, including stakes in state-owned enterprises, land, shares in banks and insurance companies, and interests in mining operations, to create a robust financial vehicle for strategic investments.

Rijkenberg highlighted the fund’s role in attracting private-sector investment to diversify Eswatini’s economy, which relies heavily on agriculture and trade with neighboring South Africa and Mozambique. “We aim to crowd in private capital into manufacturing, agro-processing, and agriculture to drive sustainable growth,” he said. The initiative aligns with Eswatini’s efforts to address a fiscal deficit projected at 3% of GDP.

To tackle financial challenges, including arrears of about 2 billion emalangeni, Eswatini has secured a $100 million loan from the World Bank and is negotiating additional funding of $45 million from the African Development Bank and $50 million from the OPEC Fund for International Development. The country, led by King Mswati III since 1986, also plans to issue a new bond on the Johannesburg Stock Exchange (JSE) next month to support its budget. “It will be in the hundreds of millions, not billions,” Rijkenberg noted. In 2024, Eswatini listed a 400-million-rand bond under a 4-billion-rand program on the JSE with an 11.875% coupon.

The upcoming bond issuance is expected to benefit from improved terms following Moody’s Ratings upgrade of Eswatini’s JSE bond program to investment grade, which Rijkenberg said will lower borrowing costs and expand market access. With its currency pegged to the South African rand, Eswatini is positioning itself as a stable investment destination, leveraging the sovereign wealth fund to foster economic resilience and long-term prosperity.