"Between the Mountains and the Monarchy": Eswatini’s Quiet ESG Reckoning

The hills of Eswatini are green this time of year—lush with sugarcane, eucalyptus, and the smell of early rain. In the distance, the craggy ridges of the Lebombo Mountains cut across the horizon like a memory. The roads wind gently through valleys dotted with homesteads, schools, and government clinics, many no more than a few rooms with a solar panel on top. The country is small—Africa’s last absolute monarchy—but what it lacks in size, it makes up for in complexity.

Eswatini is a nation in quiet transition. Not just politically, as pressure mounts for democratic reform, but developmentally—as it attempts to navigate the ESG era with limited resources, deep-rooted traditions, and a growing vulnerability to climate shocks.

“We are trying to build resilience without losing identity,” says a senior official from the Ministry of Economic Planning. “Our challenge is not just to modernize—but to do so in a way that is just, inclusive, and sustainable.”

1. ESG in Context: A Small State With Big Sustainability Questions

Eswatini, formerly Swaziland, is a landlocked kingdom nestled between South Africa and Mozambique. With a population of just over a million and a largely agrarian economy, it faces the triple ESG challenge of economic concentration, climate fragility, and governance constraints.

• GDP (2024 est.): $5.1 billion

• Population: ~1.2 million

• GDP per capita: ~$4,200

• Growth rate (2024): 2.3%

• Inflation: 5.4%

• Youth unemployment: ~45%

• Public debt-to-GDP: ~52%

The economy is heavily reliant on:

• Sugar and soft drink concentrate exports

• Customs receipts from SACU (Southern African Customs Union)

• Public sector employment and donor support

While Eswatini is politically unique, its ESG challenges are shared by many small states: vulnerability without voice, ambition without scale, and transition without a clear roadmap.

2. Environmental Sustainability: A Climate-Vulnerable State in a Warming Region

2.1 Low Emissions, High Risk

Eswatini is a low emitter but climate-vulnerable:

• GHG emissions per capita: ~0.7 tCO₂e

• Total GHG emissions: negligible globally

• Climate risks:

  • Drought in the Lowveld

  • Flooding in the Highveld

  • Soil erosion and land degradation in rural areas

In 2023, the country updated its Nationally Determined Contribution (NDC):

• Target: 14% reduction in national emissions by 2030 (conditional)

• Focus: energy, agriculture, waste, and land use

• Net-zero ambition: under review

2.2 Energy, Renewables, and the Transition Gap

Eswatini imports ~80% of its electricity from South Africa but has ambitions to localize and green its energy mix:

• Renewable electricity share: <10% (mostly hydro and biomass)

• Electrification rate: ~79% (urban: 91%, rural: 64%)

• Solar PV potential: high but underutilized

Key developments:

• Solar mini-grids piloted in rural schools and clinics

• National Energy Policy (2022) targets 50% renewable generation by 2035

• New IPPs (Independent Power Producers) framework under development

Energy efficiency and clean cooking remain underfunded, but development finance institutions are stepping in—particularly the DBSA, World Bank, and AfDB.

3. Social Sustainability: Between Tradition, Youth, and Inclusion

3.1 Poverty, Health, and Human Capital

Eswatini has made substantial progress in health and education, but poverty and inequality remain high:

• Poverty rate: ~58%

• HIV prevalence: ~27% among adults (highest globally)

• Life expectancy: ~60 years

• Primary school enrolment: >90%, but dropout rates rise sharply at secondary level

Social protection:

• Child grants and elderly pensions exist but are underfunded and inconsistently delivered

• Universal health care is aspirational, but donor-dependent for HIV and maternal health

3.2 Gender and Youth Inclusion

Women and youth are overrepresented in poverty, underrepresented in power:

• Female MPs: ~14%

• High rates of GBV (gender-based violence), with limited legal recourse

• Youth unemployment: >45%, especially in rural regions

Initiatives underway:

• Youth agripreneurship and digital skills training through UNDP and FAO

• Gender Mainstreaming Strategy (2023–2027) aligning with SADC protocol

• Social cash transfer pilots using mobile money platforms

Cultural factors—including the role of traditional leaders—both enable and constrain social inclusion efforts.

4. Governance: Stability Without Full Accountability

4.1 Political Structure: Absolute Monarchy Meets Developmental State

Eswatini is Africa’s last absolute monarchy. The king appoints the prime minister, cabinet, and judiciary. While parliamentary elections are held, political parties are banned, and dissent is often suppressed.

Despite this, the state is technocratically functional in many areas:

• Budget transparency is improving

• Civil service capacity is relatively strong

• Public finance reforms are underway, supported by the IMF and World Bank

But the lack of political pluralism and civic space poses ongoing ESG risks:

• Limited citizen participation in planning and budgeting

• Weak grievance mechanisms

• Sporadic protests and civil unrest, most recently in 2021–2022

4.2 ESG Policy and Institutional Framework

Eswatini lacks a national ESG strategy, but components are emerging:

• National Development Plan (2024–2028) includes climate, gender, and inclusion targets

• SDG Alignment Unit within the Ministry of Economic Planning

• Environmental Management Act (2021) mandates EIAs and stakeholder engagement for major projects

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The Central Bank of Eswatini is exploring:

• Climate risk stress testing

• Green lending guidelines

• ESG disclosures for licensed financial institutions (pilot phase)

Private sector ESG uptake remains minimal, but leading firms in sugar, telecoms, and banking are starting to adopt GRI and IFC Performance Standards.

5. ESG Finance: From Donor Dependence to Domestic Innovation

5.1 Climate Finance and Donor Support

Eswatini is highly dependent on external finance for its sustainability efforts:

• Accredited to Adaptation Fund and GCF (via UNDP)

• Climate-smart agriculture, solar electrification, and catchment restoration are top-funded areas

• Mobilised ~$55 million in climate finance over the past five years

Challenges:

• Limited absorptive capacity

• Weak project pipeline development

• Fiscal inflexibility due to SACU revenue volatility

5.2 Green Bonds and Carbon Markets: Early Days

There are no sovereign or corporate green bonds yet, but:

• MoF is exploring a Green Bond Framework (2025 target)

• Voluntary carbon credit projects (e.g., reforestation, cookstoves) being piloted

• REDD+ Readiness Phase completed under FAO and UNEP

With its forest cover, biodiversity, and smallholder landscapes, Eswatini has moderate carbon market potential—but requires legal frameworks and MRV systems to scale.

6. ESG Case Studies: Eswatini in Motion

Case Study 1: Lubombo Region Solar Clinic Initiative

• 40 clinics powered via solar microgrids

• Improved vaccine storage and maternal care

• Funded by Gavi and World Bank, implemented by Ministry of Health

Case Study 2: Malkerns Youth Innovation Hub

• Trains rural youth in coding, agritech, and green business

• Public-private partnership with MTN, UNDP, and local chiefs

• ESG-linked KPIs include gender inclusion and climate sensitivity

Case Study 3: Mbuluzi River Catchment Restoration

• Community-led reforestation and erosion control

• REDD+ pilot project generating preliminary carbon credits

• Gender-inclusive governance model with traditional councils

7. Comparative ESG Snapshot: Peers and Parallels

Indicator (2023)	Eswatini	Lesotho	Botswana	Malawi	El Salvador
GHG per capita (tCO₂e)	0.7	0.6	3.2	0.3	1.5
Renewable electricity (%)	<10%	35%	20%	14%	70%
ESG disclosure regulation	None	Draft	Partial	Weak	Draft
Sovereign green bond issued	No	No	Yes (2023)	No	No
TI Corruption Rank (2023)	120/180	97	35	114	116

*Eswatini trails in ESG regulation and energy transition, but leads in health access, institutional functionality, and donor coordination.

8. Strategic ESG Risks and Opportunities

Risks

• Political repression and civic space erosion

• Climate shocks (droughts, floods, erosion)

• Public finance dependency on SACU and donors

• Limited private sector ESG engagement

Opportunities

1. Develop a national ESG strategy and disclosure framework

2. Scale decentralised renewables and mini-grids

3. Create a green finance platform with regional DFIs

4. Build carbon credit readiness for smallholder landscapes

5. Expand youth and gender-focused climate entrepreneurship

   
   

Conclusion: A Kingdom at the Edge of a New Narrative

Eswatini rarely makes headlines—but perhaps it should. In the quiet corridors of Mbabane and the rural ridges of Shiselweni, a different kind of ESG story is emerging. One not of scale, but of sincerity. One not of speed, but of structure. One that grapples with the hardest question of all: how to modernize without losing what makes you whole.

As ESG capital seeks new frontiers, Eswatini may find that its greatest asset is not its size or its GDP—but its ability to evolve with grace, and govern with purpose.