Swaziland is a landlocked, open economy 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, which accounts for about 85% of imports and about 60% of exports.
Swaziland’s economic growth has been slowing since 2013, and is projected at 1.3% in 2016 down from 1.7% in 2015. The downward trend 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.
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 one of the highest in the world and life expectancy has fallen to approximately 49 years. Growth will need to be supported by investments in human capital and an inclusive social safety net system to address the poverty challenge. The country faces a unique opportunity to capitalize on the demographic transition; improvements in containing the health epidemic can propel more young people into the labor force. For the country to utilize this growth potential, adequate investments have to be made in education and skills development. This would also require adequately supporting the poor and the vulnerable, in a manner consistent with fiscal affordability. To seize these opportunities, consistent implementation of existing policies and a transformative development program is required in order to put Swaziland on a high growth and development trajectory.
The Doing Business Report (2016) ranks Swaziland 105th out of 189 countries in the overall ease of doing business. A comparison across several of the Doing Business indicators between 2006 and 2015 suggests that the country has made some (absolute) improvements in several indicators over time—for example ‘trading across borders’ is now ranked first in Africa—but the overall pace of progress has been slower than in Sub-Saharan Africa. Some of the challenges the country faces include technological readiness, business sophistication, and higher education and training
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) has been defined with eight focus areas; economic prosperity, agriculture & environmental sustainability, education, health, government service delivery, infrastructure, governance, and corruption. The index will be used to assess the country’s overall status, but also to set performance targets and action plans for ministries and agencies up to 2022.
Last Updated: Oct 07, 2016