Meeting on Tuesday, 18 October 2022, the Board of Directors of the African Development Bank Group approved the mid term report of the implementation of the Bank’s 2020-2024 Country Strategy Paper (CSP) for Eswatini and the 2022 country portfolio performance.
The review assessed the extent to which the objectives and expected outcomes of the Bank’s strategy and captured lessons learned at mid-term of the CSP, while determining the continued relevance of the CSP priority areas for the remaining implementation period. The Bank’s portfolio performance in Eswatini was rated 3 on a scale of 1 to 4, with 1 being “Very Unsatisfactory” and 4 being “Very Satisfactory”.
Approved by the Bank Group’s Boards of Directors in February 2020, the Eswatini 2020-2024 CSP focuses on two priorities: (i) Scaling-up infrastructure investments to promote economic diversification; and (ii) Strengthening economic governance to improve the investment climate. These align with the Bank’s 10-year strategy and its High 5 operational priorities. The strategy is also aligned with Eswatini’s national development priorities. The mid-term report was prepared following extensive consultations with the government, private sector, civil society and development partners.
The Country Strategy Paper cites 11 projects that are to be approved during the remainder of the CSP period, 2022-2024. Given the lack of progress in programmed non-sovereign operations and potential public-private partnership projects, the Bank will prioritize country dialogue missions with the private sector. The Bank will also design innovative financing instruments, including syndication, tailormade to the needs of Eswatini, an economy whose private sector is dominated by micro, small, and medium-sized enterprises. The Bank could also use partial risk and partial credit guarantees to encourage private sector participation in public-private partnership projects.
At the operational level, lessons learned at mid-term identified many factors crucial to efficient project implementation: the quality-at-entry of projects, timely provision of counterpart funds by the Government and full-time deployment of project implementation staff.
Eswatini is among the African countries that can access the resources of the ADB Window, the Middle Income Country Technical Assistance Fund (MIC TAF), and other trust funds. During the first half of the period covered by the CSP, the country’s lending limit declined from $715 million in 2020 to $206.91 million in 2021 and $200.20 million in 2022. Since 2020, four sovereign operations with a total value of $238.23 million have been approved, with an additional $1.56 million coming from MIC TAF.
Development partners, such as the OPEC Fund for International Development and the European Union, have expressed interest in co-financing ongoing or potential Bank projects in the agriculture, water and sanitation, and energy sectors.
As of 31 August 2022, the Bank’s active portfolio in Eswatini comprised 12 operations (8 projects, 1 line of credit, 1 study and 2 technical assistance projects). Total commitments amounted to $441.02 million, up from $221.85 million in 2020. Much of this has been sourced from ADB Window resources.
The portfolio covers the agriculture, transport, water and sanitation, multi-sector, and finance sectors. It targets four of the High 5s, namely: “Feed Africa” (56.4%), “Improve the quality of life for the people of Africa” (23%), “Integrate Africa” (17.6%), and “Industrialize Africa” (3.1%). The portfolio includes no energy sector projects (“Light up Africa”).
The Government and the Bank have agreed that the priority areas of the Country Strategy Paper remain relevant and should therefore remain unchanged through the end of the strategy period.