A four-party coalition government took office in June 2017 and, with support from a regional peacekeeping force, has brought peace and stability. However, with SACU revenues below historical averages and government expenditures remaining high, the fiscal situation has deteriorated, leading to the emergence of government payment arrears. While international reserves are at adequate levels and banks remain well-capitalized, domestic arrears are beginning to impact the broader economy, exacerbating growth challenges posed by structural impediments. Unemployment, particularly among the young, is a major concern.
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