PSPF records E632m surplus in 3 months

The Public Service Pensions Fund (PSPF) in Eswatini has achieved a significant surplus of E632 million in revenue after tax for the quarter spanning July to September. This information was disclosed in the second quarter performance report for the ministry of public service, tabled by Minister Mabulala Maseko in Parliament. The report highlights that this surplus represents a favourable variance of E139 million, or 28.2%, over the quarterly budget of approximately E493 million.

According to the report, the surplus was primarily supported by investment income and administration expenses that performed better than their quarterly budget benchmarks. However, this positive outcome was partly offset by lower revaluation gains and a higher withholding tax expense. The favourable performance is also attributed to the country's stable and low inflation environment, which averaged approximately 2.6% during the quarter that ended in June.

The stable macroeconomic environment in Eswatini was further reflected in the prime lending rate, which remained unchanged at 10.25% throughout the quarter. The ministry noted that this stable interest rate environment was a result of subdued inflationary pressures and continued support for economic activity while maintaining price stability. The government's 2026/27 budget, presented in February, has been supporting economic growth through various initiatives.

The report also highlighted that the Lilangeni remained broadly stable during the quarter, supported by its peg to the South African Rand and a relatively stable monetary environment in the Common Monetary Area (CMA). Global markets exhibited strong performance during the quarter, driven by resilient economic activity, robust corporate earnings, and investments in artificial intelligence and digital infrastructure.

Investor sentiment improved following the easing of geopolitical tensions in the Middle East, which alleviated concerns over global energy supply disruptions and led to lower oil prices towards the end of the quarter. The International Monetary Fund (IMF) projected global growth of 3.1% in 2026, underscoring the resilience of the global economy despite ongoing geopolitical uncertainties.

The South African markets, with which Eswatini is closely aligned through the CMA, remained resilient during the quarter that ended on June 30. The PSPF report has been tabled in Parliament but has not yet been debated by Members of Parliament. The favourable financial performance of the PSPF is seen as a positive indicator for the country's economic stability and pension fund management.

The surplus achieved by the PSPF is a significant development for Eswatini's public service sector, indicating effective financial management and strategic investment. As the report awaits debate in Parliament, stakeholders are keenly watching the potential implications and future plans for the fund. The PSPF's performance is crucial for the country's public servants and pensioners, and its stability is vital for overall economic health.

Key points

• PSPF achieved a E632 million surplus after tax for July-September.
• The surplus represents a 28.2% favourable variance over the quarterly budget.
• Stable inflation and interest rates supported the favourable financial performance.