At a moment when many of sub-Saharan Africa's urban centres are straining under the weight of rapid population growth and chronically underfunded municipal budgets, the Governor of the Central Bank of Eswatini, Mr Phil Mnisi, stepped into the policy arena with a pointed message: the kingdom's local authorities cannot continue to rely on the financing models of the past. Speaking at the Eswatini Urban Development Forum in Ezulwini on 26 October 2026, Mnisi outlined a framework for building sustainable revenue streams capable of funding the next generation of local government services and urban infrastructure.
The forum, whose proceedings were subsequently published by the Bank for International Settlements on 2 November 2026, marks a rare and significant moment in which the head of a small landlocked Southern African nation's central bank directly engages the question of subnational fiscal sustainability. That a central bank governor — rather than a finance ministry official — is leading this conversation signals the extent to which monetary and financial stability in Eswatini is now understood to be intertwined with the fiscal health of municipalities.
The Municipal Financing Gap
Eswatini's local authorities face a challenge that is neither unique nor simple. Across the African continent, municipalities are expected to deliver an expanding portfolio of services — water, sanitation, roads, waste management, local economic development — while operating on revenue bases that have failed to keep pace with urbanisation. In Eswatini, where the urban population has grown steadily and the demands on town councils have intensified, the gap between what local governments are expected to provide and what they can actually fund has become structurally consequential.
Mnisi's intervention at the Urban Development Forum addresses this gap directly. His talking points, as presented at the Ezulwini event, focus on the imperative of developing revenue streams that are both diverse and durable — moving local authorities away from dependence on central government transfers and toward financing instruments that can be structured, planned, and scaled. The underlying argument is one of fiscal resilience: a local authority that generates its own reliable income is better positioned to plan capital projects, service debt, and attract private investment than one that waits on intergovernmental grants.
Unlocking Local Government Financing
The second dimension of Mnisi's address — unlocking local government financing — points toward the structural barriers that prevent Eswatini's municipalities from accessing capital markets or attracting longer-term project finance. These barriers are familiar across developing-economy contexts: weak credit profiles, limited financial management capacity, insufficient own-source revenue to service debt, and a lack of standardised reporting that would give potential lenders or bond investors the transparency they require.
A central bank's involvement in this conversation is not incidental. BIS-published speeches from governors across emerging markets increasingly reflect a recognition that financial system stability depends not only on the health of commercial banks and sovereign borrowers, but on the entire architecture of public finance, including its subnational layers. When municipal balance sheets deteriorate — through arrears accumulation, unfunded pension liabilities, or infrastructure backlogs — the risks can migrate into the banking sector through exposed local lenders, contingent sovereign liabilities, and constrained economic activity in urban centres.
Urban Development as a Financial Stability Question
What distinguishes Mnisi's framing is the elevation of urban development financing from a purely administrative or budgetary question to one with clear implications for the broader financial system. By convening stakeholders at the Urban Development Forum under a theme of sustainable revenue and financing, Eswatini's central bank is, in effect, asserting that the kingdom's long-term economic trajectory depends on getting municipal finance right. Urban centres that are adequately funded become engines of productivity, tax generation, and private investment. Those that are not become fiscal liabilities and drags on national growth.
This perspective aligns with a growing body of thinking at multilateral institutions, including the BIS and its affiliated research networks, that subnational fiscal sustainability deserves greater prominence in financial stability frameworks — particularly in economies where central government resources are constrained and where the pace of urbanisation is compressing the timeline for reform.
What This Means for Eswatini and the Region
Governor Mnisi's address at the Eswatini Urban Development Forum in Ezulwini is more than a domestic policy speech. It is a marker of a broader shift in how central banks in smaller African economies are conceptualising their roles. The willingness to engage directly with local government financing — to speak at urban forums rather than leaving the conversation to treasury officials alone — reflects an expanded understanding of what financial stability requires in a developing-economy context.
For Eswatini's municipalities, the immediate priority is building the institutional and technical capacity to make use of whatever financing instruments are made available — whether through improved property tax collection, public-private partnerships, municipal bond frameworks, or development finance institution lending. The central bank's advocacy for sustainable revenue streams represents an important signal to local authorities that reform is not optional. For regional peers watching Eswatini's approach, the lesson may be equally instructive: sustainable urban finance is not merely a municipal bookkeeping matter. It is a financial stability imperative.
Written by the editorial team — independent journalism powered by Codego Press.