Swaziland - Economy

Overview: Despite subdued growth in the latter 1980s and early 1990s, a period much influenced by the economic problems and then political change in South Africa, Swaziland has, over the longer period, one of the best growth records in Africa, and has pursued liberal policies towards foreign and private investment – especially in mining and industry – since independence in 1968. GDP grew by 6.7% p.a. 1980–90.

Its vulnerability lies in heavy dependence on soft drink concentrate and sugar cane, and on South Africa, which provides imports, investment and employment. It does, however, have established wood pulp and fruit-canning industries, and manufactures a variety of consumer goods, including refrigerators, footwear and plastic domestic goods.

There is dual administration of Swaziland’s official financial assets. Those of the Swazi nation, comprising communal land resources (known as Swazi Nation Land) and minerals, are managed by Tibiyo TakaNgwane, an institution created by royal charter in 1968 and not responsible to parliament. The modern economy is managed by the government, but there is an increasing demand, backed by the unions, for far-reaching economic reform.

The economy grew well in the late 1990s but growth was generally slower in the 2000s, due to the deteriorating investment climate, erosion of trade preferences, declining competitiveness, weak institutional capacity and devastation of the workforce by HIV/AIDS. Average GDP growth barely exceeded 2% p.a. in 2000–07. Inflation rose to 12% in 2002 and then averaged 5.3% p.a. during 2003–07. Years of low growth have led to high levels of poverty, inequality and unemployment.

Trade: Exports of goods and services account for 84% of GDP and manufactured exports for around 76% of total merchandise exports (2004). Main exports are soft drink concentrate, sugar, citrus, consumer goods, canned fruit, wood pulp; main imports are manufactured goods, machinery, transport equipment, food, chemicals and fuels.

South Africa provides the bulk of imports and receives more than 50% of exports. Other significant export partners are the USA and Mozambique.

Swaziland enjoys reciprocal duty- and quota-free access to the European market under an interim Economic Partnership Agreement on trade with the European Union.