This country profile was published in November 2008 in our annual 'Africa in 2009' issue. The next edition, 'Africa in 2010' will be on sale 23 November 2009.

Click on the drop-down menu above to see Swaziland's Top Companies and Top Banks.

Swaziland faces big challenges on the economic and political fronts. Elections in 2008 did little to stabilise the kingdom's economic decline or to improve the international reputation of its monarchical government. About 70% of the population live in poverty, while 20% own 66% of the country's income. Real per capita GDP growth is in decline at 0.7% per year.

There are economic issues that the Swazi government finds difficult to tackle. There is a large civil service wage bill that creates annual budget deficits which run well beyond current revenues. The deficits, together with poor selection and appraisal of public investment projects, have hurt growth.

As a landlocked country, Swaziland relies heavily on South Africa from which it receives more than 90% of its imports and to which it sends 60% of its exports. Customs duties from the Southern African Customs Union (SACU) equal about 70% of government revenue in most years. There have been warnings, largely ignored in Swaziland, that SACU revenues will decline sharply over the next three years.

In the economy at large, about 70% of the population are engaged in agriculture (many at a subsistence level). Agriculture (sugar cane, wood pulp, citrus fruits are important) amounts to 12% of GDP, but a shadow lies over the sugar industry since the EU reduced sugar prices by 17% in 2007. Manufacturing, which amounts to about 46% of GDP, has been diversified in recent years. Clothing manufacturing is currently in decline as world markets change. Workforces have been retrenched and the industry has been facing strikes; as a result, the international reputation of the industry has been falling, which may result in lost orders and further retrenchments in the coming year.

With an estimated 40% official unemployment rate, Swaziland's need to increase the number and size of small and medium-sized enterprises and attract foreign direct investment is acute. Overgrazing, soil depletion, drought, and sometimes floods persist as problems for the future. In the past year more than 650,000 people received some form of international food aid and about 30% of the adult population are infected with HIV.

Swaziland is ruled by King Mswati III, the only autonomous monarch in Africa. Despite the 2006 constitution that allows for freedom of association, political parties remain banned and members of parliament are elected on 'individual merit'. During the 2008 elections, both the AU and the Pan-African Parliament called for Swaziland to move towards democracy and allow parties, thereby bringing the kingdom into line with other Southern African Development Community countries. There seems little prospect of this happening. The king keeps tight control over the people, working through local chiefs who owe their position to him. Nearly all broadcasting is state-controlled and the independent press exercises a high level of self-censorship.

There has been some low-level terrorism. Official buildings have been attacked with petrol bombs (causing little damage or disruption). At the time of the elections, two men were killed when a bomb they were intending to plant near one of the king's palaces exploded prematurely.

The vital test for Swaziland now is to introduce democratic reforms that allow ordinary Swazis to engage fully in the political process and determine their own future. The introduction of political parties would be the first step towards this.