Swaziland is a landlocked country in Southern Africa bordering South Africa and Mozambique. It has a population of 1.2 million. With a gross domestic product (GDP) per capita of about $3,000, Swaziland is classified as a lower middle-income country. Swaziland is very closely linked to South Africa on which it depends for about 85% of its imports and about 60% of exports.
Growth slowed down to 0.4 in 2015, slightly improved to 1.4 in 2016 and 1.9 in 2017 and is projected at 1.3 and 2% in 2018 and 2019 respectively. The slowdown is due to continued drought and a difficult external environment, especially from South Africa, leading to a sharp decrease in South African Customs Union (SACU) revenues. Such a decrease in revenue, combined with increased public spending, is generating higher fiscal deficits and a growing public debt. Under the current policy stance, the public debt to GDP ratio could increase from 17.4% in 2015 to 24% in 2018, increasing risks of fiscal unsustainability.
Swaziland was admitted back into Africa Growth Opportunity Agreement (AGOA) in December 2017 after three years of suspension. Full benefits from AGOA are expected in the medium term as it might take time to resuscitate the textile firms that closed after loss of trade benefits from AGOA in 2015. The restoration of AGOA might see the trade balance between United States and Swaziland turning positive in 2018 in favor of Swaziland after being negative for the past three years.
The primary development challenge for the Kingdom of Swaziland is to address the high rate of poverty and inequality in the country. An estimated 63% of the population lives below the poverty line, and about 29% lives below the extreme poverty line. Inequality is very high with a Gini coefficient of 49.5. The HIV/AIDS prevalence of 31% of the population is among the highest in the world and life expectancy has fallen to approximately 49 years.
As a consequence of severe drought, up to a quarter of the population remains food- and water- insecure and deeply vulnerable, and many households are still reliant on welfare or social safety nets. The regions with the highest prevalence of food insecurity are Lubombo and Shiswelweni, the areas most affected by the drought. Conditions are expected to improve in 2017/18 due to improvements in agricultural production (crops and livestock) and somewhat lower prices for food. Improvements can be seen at the national level, but persistent drier conditions in parts of the low-producing regions, heavy rains in February, and an outbreak of army worms are likely to constrain yields.
The government published its Programme of Action (2013–2018), which aims to fast track progress towards Vision 2022. As a monitoring tool, the Swaziland Development Index (SDI) was defined with eight focus areas: economic prosperity, agriculture and environmental sustainability, education, health, government service delivery, infrastructure, governance and corruption.
The actual implementation of Vision 2022 has not progressed as initially planned and nor has reporting on the SDI. It is challenged by the allocation of resources and SDI reporting undermined by limited capacity to monitor and report on progress. At a resource level, much financing has gone into infrastructure projects. El Nino-induced drought has also meant that the government has had to finance immediate relief to counteract the negative impact of drought. These developments have undermined the availability of public resources for poverty reduction programs, and thus any progress made toward achieving Vision 2022 is slow.
Last Updated: Apr 19, 2018