OF ESWATINI Umntsholi Wemaswati Introduction uncertainty as trade tensions remain. On the trade front, the forecast reflects It gives me great pleasure to present to the May 2019 increase of US tariffs on the Minister for Finance, Eswatini USD200 billion of Chinese exports from citizens and other stakeholders the 10 per cent to 25 per cent, and retalia- second CBE Integrated Annual Report for tion by China. the financial year ended 31 March 2019. The Report provides a comprehensive Furthermore, technology tensions have overview of the operations of the CBE erupted, threatening global technology during the past financial year. It supply chains, and the prospects of a ‘no includes a summarised version of the deal’ Brexit have increased following financial statements. the appointment of new Prime Minister (PM) Boris Johnson in the United Coverage Kingdom. In addition, rising geopolitical tensions, especially relating to sanctions Matters included in the Report are on Iran, supply disruptions in Russia, aimed at informing and providing assur- Chile and Libya have roiled energy ance to stakeholders on the CBE’s ability prices and, in the process, affected to deliver on its mandate, commitment commodity exporters, despite a to sustained relationships and responsi- near-term strengthening of oil prices. 2018/2019 ble corporate citizenship. The issues of Overall, risks to the latest growth materiality pertain to price stability and forecast are mainly to the downside. broader stability of the financial sector Other negative developments include a INTEGRATED conducive to economic growth in the protracted increase in risk aversion that short, medium and long term. has exposed the financial vulnerabilities that continue to accumulate after years ANNUAL REPORT Materiality of low interest rates; and the mounting In ascertaining matters of materiality disinflationary pressures that increase for disclosure in this report, the Bank debt service difficulties, constraining has considered issues that either affect monetary policy space to counter down- or have potential to substantially affect turns, and make adverse shocks more our ability to perform and remain persistent than normal. relevant, our mode of operation, input factors as well as our ability to create The IMF highlights that, against the value over time. As indicated, issues of observed difficult backdrop in the first materiality pertain to those that direct- half of 2019, there were positive ly affect the Bank’s ability to achieve its surprises to growth in advanced econo- price and financial stability mandate. mies, but weaker-than-expected activi- ty in emerging markets and developing Global developments economies. For advanced economies, growth is projected at 1.9 per cent in According to the International Monetary 2019 and 1.7 per cent in 2020. In Fund’s World Economic Outlook (IMF emerging markets and developing econ- WEO) Update released in July 2019, omies, growth is forecast at 4.1 per cent global growth is forecast at 3.2 per cent in 2019, picking up to 4.7 per cent in in 2019, before picking up to 3.5 per 2020. Investment and demand for cent in 2020. The softer projections consumer durables have been subdued follow a 3.6 per cent expansion record- across advanced and emerging market ed in 2018. Global growth remains economies as firms and households sluggish and precarious, with the dyna- continue to hold back on long-term mism in the global economy being spending. weighed down by prolonged policy Budget estimates for 2019/20 show that social responsibility. The focus of the CSI As at the end of March 2019, the annual the fiscal gap has reduced to E3.0 billion Financial technology CBE top 10 risks Our strategy of the effectiveness of our regulatory advanced economies has softened below programme is three priority areas, target (for example, in the United inflation rate increased to 4.5 per cent (equivalent to a deficit of 4.5 per cent mandate. Most of the amendments have The range, prevalence and evolution of For the period under review, the Bank namely; community health programmes, States) or remained well below it (in the from 4.1 per cent in February, the of GDP) from an estimated outturn of Our ‘super-goal’ (V4 target) is to be an been concluded and quality assured. financial innovations have since identified, analysed and prioritised the educational initiatives (covering prima- Eurozone and Japan). highest inflation rate since December, 5.5 per cent in 2018/19. This contrac- agile, efficient and integrated central The next year will be focusing on the increased incredibly. In the light of top 10 corporate risks according to the ry school, high school, tertiary institu- amid a sharp rise in fuel prices. The tion was mainly due to the fiscal consoli- bank by the year 2021. We may achieve legislative stages that are outside of our these technological advancements for Bank’s process construct. The top 10 tions) and national research institu- policies and delegates to management 2019. This has, once again, been a The IMF projects inflation in emerging financial year ended with the South dation and proposed revenue measures all other strategic targets, but if we control. financial services, regulators and super- risks are based on the risk landscape tions. Total amount invested in this the detailed planning and implementa- difficult year, but the CBE has been able markets and developing economies, on African Reserve Bank (SARB) voting that the Government has put in place miss this one, our entire strategy will visors face the challenge of harnessing considered against the Bank’s capacity programme for the financial year was tion of the objectives and policies in to contend with the challenges present- average, to rise to 4.8 per cent in 2019, unanimously to hold its benchmark repo for the financial year. fail. In the previous year, we captured Financial sustainability the potential of Financial Technology to avoid and mitigate the likelihood of E1.7 million. accordance with acceptable risk param- ed. before declining to 4.7 per cent in 2020. rate steady at 6.75 per cent on 28 March our V4 targets for the 2018/19 financial (FinTech), while making sure not to the risk occurrence as well as the eters. The Board monitors compliance Core inflation has also dropped further 2019, as widely expected. Policymakers Public debt year. The programme did well in counteract- undermine consumer protection, integ- impact - should it occur. Mitigation Stakeholder engagement with policies and achievements against Supplementary reports below historical averages in many highlighted that the current stance on ing the negative effects of outflows in rity of financial markets and stability of measures were implemented during the set objectives by holding management emerging markets and developing econ- monetary policy remains accommoda- Total public debt stock was recorded at policy uncertainty as we come to grips FSC discharges its accountability The Bank identified four strategic areas the South African Rand (ZAR) portfolio. the financial system as a whole. course of the financial year, with strate- We have a Stakeholder Management accountable for its activities through As stand-alone reports, the Bank, along- omies, barring a few cases such as tive and monetary policy actions will E17.6 billion, an equivalent of 26.7 per with the freeze on increases in water through the publication of the annual of focus, namely; human dynamics, It also performed well in creating finan- gic and operational projects implement- Framework in place that guides stake- performance reporting and budget side the Integrated Annual Report, also Argentina, Turkey, and Venezuela – continue to focus on anchoring inflation cent of GDP at end of March 2019. This and electricity tariffs introduced by the Financial Stability Report. financial sustainability, regulatory cial efficiencies (per V4 financial The Eswatini FinTech strategy describes ed for transformation and to improve holder engagement activities and updates. publishes an Economic Review Report, contributing to the subdued headline near to the mid-point of the target reflects an increase of 35.4 per cent new Cabinet. The freeze on increases in reform and business intelligence. These efficiency targets). More interventions the country’s priorities in its journey to controls. Reasonable success was processes. During the reporting year, we Financial Stability Report and Audited inflation across this group of countries. range in the interest of sustainable from the revised figure of E13.0 billion the electricity tariff has been reflected Eswatini’s fiscal challenges still repre- strategic areas are overseen by a cham- will continue even in the next financial be the ‘leading FinTech hub in Africa’. achieved with slight delays in project developed a Meaningful Stakeholder In the year under review, the Board Financial Statements, which can be Core inflation has also dropped further growth. recorded in March 2018. The surge is in the inflation outcome for April 2019, sent a significant point of vulnerability pion. A total of fifteen programmes are year. Central Bank Digital Currency, partner- deliveries as a consequence of the Engagement Project as one of our finalised the external Board evaluation accessed on our website https://ww- below historical averages in many mainly attributed to continued issuance where it fell to a low of 1.8 per cent for the financial sector. Developments in run under these strategic areas, with ship with key stakeholders, the Innova- leadership uncertainty among other strategic activities. We developed a exercise with the Institute of Directors w.centralbank.org.sz. emerging markets and developing econ- KINGDOM OF ESWATINI of Government securities. The Bank down from 5.3 per cent recorded in South Africa (SA) present much closer each programme headed by a manager Where are we going? tion Committee, and creation of the operational inefficiencies. stakeholder engagement measurement (SA). omies, barring a few cases such as notes with concern that the country’s March 2019.