Eswatini's King Mswati III has intensified his grip on power by banning opposition gatherings and restricting press freedoms, triggering warnings from international investors about the country's economic stability. The move, announced on 12 May, follows months of protests and political unrest, with the government accusing critics of destabilising the nation. The crackdown has raised concerns among business leaders and financial analysts who fear a decline in foreign investment and economic growth.
Repression Deepens as Mswati Consolidates Power
The ruling Eswatini National Council, led by Prime Minister Barnabas Sibusiso Dlamini, issued a decree banning all public gatherings that criticise the monarchy. The order, effective immediately, has led to the arrest of several activists and journalists, including Thandiwe Dlamini, a prominent human rights advocate based in Mbabane. The government claims the measures are necessary to protect national security and uphold the king's constitutional authority.
According to a recent report by the African Development Bank, Eswatini's GDP growth slowed to 1.2% in 2023, the lowest in a decade. The economic slowdown has been exacerbated by a lack of foreign direct investment, with many firms citing political instability as a key concern. "The recent crackdown is a major red flag for investors," said Dr. Lindiwe Mkhize, an economist at the University of Swaziland. "It signals a return to authoritarian governance, which has historically hurt economic performance."
Businesses Face Uncertainty as Political Tensions Rise
Local and international businesses are now bracing for the economic fallout of Mswati's actions. The Eswatini Chamber of Commerce has warned that the crackdown could deter foreign investors, particularly in the agricultural and manufacturing sectors. The country's main export, sugarcane, is already under pressure due to declining global prices and rising production costs.
Several multinational companies have expressed concern over the political climate. A spokesperson for the South African-based mining firm, Anglo American, said: "We are closely monitoring the situation in Eswatini. Political instability can have a direct impact on our operations, especially in a country that relies heavily on foreign investment." The firm has not yet announced any changes to its operations but has called for greater transparency from the government.
Impact on Tourism and Labour Markets
Eswatini's tourism sector, a key source of foreign currency, is also at risk. The country's pristine natural reserves and cultural heritage sites have attracted visitors from across Africa and beyond. However, the recent political turmoil has led to a 15% decline in tourist arrivals since January, according to the Eswatini Tourism Authority. This drop has already affected small businesses in Mbabane and Lobamba, where many rely on seasonal tourism for income.
The labour market is another area of concern. With political instability and economic uncertainty, unemployment has risen to 28%, according to the World Bank. Young workers, in particular, are struggling to find stable employment, leading to increased migration to South Africa and other regional economies. "The government's actions are making it harder for young people to see a future here," said Sipho Nkosi, a youth activist in Manzini. "We need real change, not repression."
Investors Warn of Long-Term Economic Risks
International financial institutions have issued warnings about the long-term economic risks posed by Mswati's actions. The International Monetary Fund (IMF) has suspended its technical assistance programme in Eswatini, citing concerns over governance and transparency. The move has raised questions about the country's ability to access future funding, which is critical for its economic recovery.
Investors are also looking at alternative markets. A recent survey by the African Investment Council found that 62% of respondents are considering shifting investments away from Eswatini due to the political climate. "This is a concerning trend," said Noma Moyo, a financial analyst at the Johannesburg-based investment firm, FNB. "Stability is the foundation of growth, and Eswatini is moving in the opposite direction."
What Comes Next for Eswatini?
The coming weeks will be critical for Eswatini's economic and political future. The government has not announced any plans for dialogue with opposition groups, and international pressure is mounting for greater transparency and accountability. The African Union and the Southern African Development Community (SADC) have called for a peaceful resolution to the crisis, but their influence remains limited.
Investors and business leaders will be watching closely for any signs of policy shifts or reforms. The next major test will come in early June, when the Eswatini National Development Plan for 2024–2028 is expected to be released. If the plan fails to address the country's economic and political challenges, the risk of further instability and capital flight will only increase.
