Country Profile: SWAZILAND

Southern Africa

Monday, 23 November 2009 00:00

This country profile was published in November 2009 in our annual 'Africa in 2010' issue. The next edition, 'Africa in 2011' will be on sale in November 2010.

Especially difficult economic circumstances loom for the Swazi kingdom in 2010 on account of its high dependence on Southern African Customs Union (SACU) receipts, which have been falling sharply because of reduced economic activity across the region, particularly in South Africa. SACU earns its revenue from import and excise duties for the region, which are subsequently divided among member states: Swaziland, Lesotho, Namibia, Botswana and South Africa. But collective imports by these countries were almost 46% lower in the first five months of 2009 than in the corresponding period in 2008.  

Although two-thirds of the population live  below the poverty line, Swaziland does not have an IMF programme. The government is struggling to reduce the size of the civil service and to control costs of public enterprises. One of its growth strategies is to try to improve the atmosphere for foreign investment. With an estimated 40% unemployment rate, Swaziland’s need to increase the number and size of small and medium-sized enterprises, and to attract foreign direct investment is becoming acute.  

The IMF calculates that real GDP growth in 2009 will decelerate to a marginal level of 0.4%, following a contraction in manufacturing and mining,  although there has been a rebound in sugar production. Inflation is projected to decline to single digits as pressures related to food-price increases in 2008 subside.  

Per capita income was estimated at $2,778 in 2008, with agriculture occupying approximately 70% of the population, many at a subsistence level.  Overgrazing, soil depletion, drought and floods persist. The fact that 25% of the population needed emergency food aid in 2006/07 because of drought is still fresh in the national memory. The sugar industry also has to increase efficiency in response to a 17%  decline in EU sugar prices.  

Sugarcane, wood pulp and citrus are important products, and the sectors make up 11% of GDP. The manufacturing sector makes up 46% of GDP and has greatly diversified since the mid-1980s, while services make up 43% of GDP. Mining has declined in importance in recent years, with only coal and quarry stone mines remaining active. Swaziland’s exports – consisting of soft-drink concentrates, sugar, wood pulp, cotton yarn, refrigerators, citrus and canned fruit – were worth an estimated $1.8bn in 2008, down from $2bn the previous year, while imports – motor vehicles, machinery, transport equipment, foodstuffs, petroleum products and chemicals – were worth $1.9bn, almost the same as the previous year.

 In the political arena, King Mswati III remains autocratic and Swaziland has attracted international condemnation for the Suppression of Terrorism Act (STA) introduced in 2008. The measure has been used to suppress freedom of speech and association, despite government claims that this was not the act’s intention. A number of political organisations that were already banned have been labelled ‘terrorists’ by Prime Minister Barnabas Dlamini – making any member or casual supporter liable for up to 25 years imprisonment. Now the Public Service Bill is finding its way through parliament to make it illegal for civil servants to engage in political activity.

 Mario Masuku, the president of the most influential opposition group, the People’s United Democratic Movement, was arrested in November 2008 under the STA and held in a maximum security prison until September when he appeared for trial. In an unexpected show of political independence, the High Court acquitted him five hours into a trial that had been expected to last several days, citing the weaknesses of the prosecution’s case.