Families across the country may soon have to make difficult financial decisions if the anticipated El Niño-induced drought coincides with escalating conflict in the Middle East, economists have warned.
They say the combination could trigger higher prices for food, fuel and transport, leaving households with less money for non-essential spending.
Economist Sanele Sibiya said consumers would likely feel the effects first at the grocery store. He explained that El Niño weather patterns usually bring below-average rainfall to Southern Africa, reducing crop production and forcing countries such as Eswatini to import more maize and other staple foods.
The increased dependence on imports would push up food prices, placing the greatest burden on low-income families that already spend a significant portion of their income on basic necessities.
Sibiya said households should also prepare for the possibility of higher transport and energy costs if conflict in the Middle East continues to disrupt global oil supplies. Rising international oil prices would increase the cost of transporting goods, generating electricity and producing agricultural inputs such as fertiliser.
Those additional costs would eventually filter through the economy, making essential goods and services more expensive.
“The combined effect would significantly reduce household purchasing power,” Sibiya said.
“Families would be forced to spend more on necessities while cutting back on discretionary purchases, reducing demand for non-essential goods and services.”
He said this means households may need to revisit their budgets, prioritise essential expenses and avoid unnecessary debt should inflation accelerate. Consumers who plan ahead and manage their spending carefully would be better positioned to absorb higher prices if the anticipated shocks materialise.
The pressure would not stop at household finances. Sibiya said businesses are also likely to experience rising operating costs at a time when consumers are spending less.
Agricultural producers that depend on rainfall could record lower yields, while irrigated farms would also face higher production costs because of reduced water availability and increased pumping expenses.
Manufacturers, transport operators and retailers would similarly contend with more expensive fuel, electricity and logistics, squeezing already thin profit margins.
As costs rise and demand weakens, businesses could delay expansion plans, postpone investments and reduce employment opportunities.
According to Sibiya, commercial banks may experience an increase in non-performing loans as farmers and businesses struggle to meet their repayment obligations. Higher credit risks could prompt lenders to tighten borrowing requirements, making it more difficult for households and businesses to access finance when they need it most.
Another economist, Mkhosi Thwala, said government finances may come under additional pressure if the country is forced to respond to another drought while facing higher import costs.
Lower economic activity would likely reduce tax revenue, even as government spending increases on food imports, water delivery programmes, livestock support and expanded social protection initiatives.
He said rising global fuel prices would further inflate the country’s import bill and increase the cost of delivering public services, placing additional strain on the national budget.
Thwala said the two risks reinforce each other.
Drought reduces domestic food production and increases reliance on costly imports, while higher oil prices make transporting those imports even more expensive. Rising fertiliser prices could also delay agricultural recovery, prolonging the effects of drought on food production and prices.
He said strengthening the country’s resilience would require continued investment in climate-resilient infrastructure, improved water security, support for smallholder farmers, stronger fiscal buffers and greater diversification of energy sources to reduce dependence on imported fuel.
Consumer Preparation Guide
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Review household budgets.
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Plan grocery purchases carefully.
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Compare prices before buying.
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Reduce energy consumption.
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Avoid unnecessary debt.
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Pay down existing debt.
SMEs Preparation Guide
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Cut unnecessary costs.
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Build cash reserves.
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Diversify suppliers.
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Manage stock levels.
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Review pricing strategies.
