… tertiary sector records strong 9.9 per cent year-on-year

Eswatini's tertiary (services) sector has emerged as a bright spot in Southern Africa's economic landscape, recording robust year-on-year growth of 9.9% according to latest official data. This expansion comes as the kingdom pivots away from traditional reliance on sugar exports and textile manufacturing, signaling a structural shift in economic priorities that carries significant implications for regional investors and international stakeholders eyeing emerging market opportunities.

## What is driving Eswatini's service sector boom?

The tertiary sector encompasses financial services, tourism, retail, telecommunications, and government services—industries that collectively now anchor the kingdom's GDP growth trajectory. Growth has been fueled by rising consumer demand within the regional SADC bloc, increased digital adoption in banking and fintech, and renewed foreign direct investment in hospitality and logistics hubs. Post-pandemic recovery in cross-border trade through South Africa has also bolstered wholesale and distribution activity, a critical tertiary subsector.

Tourism recovery remains particularly noteworthy. Eswatini, home to Hlane Royal National Park and world-class wildlife reserves, has seen international visitor arrivals rebound to near pre-2020 levels. Hotel occupancy rates in Mbabane and Manzini are climbing, with average room rates rising 12-15% year-on-year, suggesting both local and regional confidence in the kingdom as a destination for leisure and business travel.

Telecommunications and digital services are accelerating growth further. Mobile money adoption has doubled since 2022, with fintech platforms facilitating cross-border remittance flows from the Eswatini diaspora—particularly those working in South African financial centers. This digital-first trend is attracting venture capital from Pan-African fintech investors, creating secondary job creation in software development and customer service.

## Why should international investors pay attention?

Eswatini's 9.9% tertiary growth rate substantially outpaces South Africa's sluggish 1.2% expansion and Botswana's 3.4% service sector growth. This relative outperformance signals that Eswatini has become a more attractive micro-market for targeted sectoral exposure. The kingdom's stable currency peg to the South African Rand, coupled with membership in the Southern African Customs Union (SACU), provides structural advantages for businesses seeking SADC distribution platforms with lower operating costs than Johannesburg or Cape Town.

However, growth remains fragile. The kingdom still depends on SACU revenue transfers for roughly 60% of government income, and any South African recession would cascade directly into Eswatini's fiscal position. Additionally, the labour market has absorbed only 30% of new tertiary-sector growth into formal employment; much remains in informal retail and street-level services.

## What are the sectoral entry points?

Real estate developers eyeing affordable hospitality and logistics park development in the Matsapha industrial zone can capture middle-mile distribution demand. Fintech platforms targeting unbanked rural populations (45% of the kingdom) represent untapped customer acquisition opportunities. Regional franchise operators in quick-service restaurants and retail have found Eswatini's market less saturated than South Africa, with 8-12% annual unit economics improvement documented by first-movers.

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