Economy of Eswatini

The economy of Eswatini is fairly diversified, with agriculture, forestry and mining accounting for about 13 percent of GDP, manufacturing (textiles and sugar-related processing) representing 37 percent of GDP and services – with government services in the lead – constituting 50 percent of GDP.

Economy of Eswatini
Currencylilangeni (SZL), South African rand (ZAR)
1 April - 31 March
Trade organisations
WTO, SADC, SACU
Statistics
GDP$6.344 billion [1]
GDP rank159th (nominal) / 157th (PPP)
GDP growth
0.4% (2015), 1.4% (2016),
1.9% (2017e), 1.1% (2018f) [2]
GDP per capita
$5,807 [1]
GDP by sector
agriculture: 8.2%, industry: 46.9%, services: 44.9% (2011 est.)
6.1% (2011 est.)
Population below poverty line
69% (2006)
Labour force
457,900 (2007)
Labour force by occupation
agriculture: 70%
Unemployment40% (2006 est.)
Main industries
Coal mining, wood pulp, sugar, soft drink concentrates, textile and apparel
111th (2017)[3]
External
Exports$2.049 billion f.o.b. (2011 est.)
Export goods
soft drink concentrates, sugar, wood pulp, cotton yarn, refrigerators, citrus and canned fruit
Main export partners
 South Africa 59.7%
 EU 8.8%
 US 8.8%
 Mozambique 6.2% (2004)
Imports$2.076 billion f.o.b. (2011 est.)
Import goods
motor vehicles, machinery, transport equipment, foodstuffs, petroleum products, chemicals
Main import partners
 South Africa 95.6%
 EU 0.9%
 Japan 0.9%
 Singapore 0.3% (2004)
Public finances
$703.1 million (2011 est.)
Revenues$1.006 billion (2011)
Expenses$1.488 billion (2011)
Economic aidrecipient: $104 million (2001)
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

Agriculture

Title Deed Lands (TDLs), where the bulk of high-value crops are grown (sugar, forestry, and citrus) are characterized by high levels of investment and irrigation, and high productivity. Nevertheless, the majority of the population – about 75 percent—is employed in subsistence agriculture on Swazi Nation Land (SNL), which, in contrast, suffers from low productivity and investment. This dual nature of the Swazi economy, with high productivity in textile manufacturing and in the industrialized agricultural TDLs on the one hand, and declining productivity subsistence agriculture (on SNL) on the other, may well explain the country’s overall low growth, high inequality and unemployment.

Economic growth

Economic growth in Eswatini has lagged behind that of its neighbors. Real GDP growth since 2001 has averaged 2.8 percent, nearly 2 percentage points lower than growth in other Southern African Customs Union (SACU) member countries. Low agricultural productivity in the SNLs, repeated droughts, the effect of HIV/AIDS, and an overly large and inefficient government sector are likely contributing factors. Eswatini’s public finances deteriorated in the late 1990s following sizeable surpluses a decade earlier. A combination of declining revenues and increased spending led to significant budget deficits. The considerable spending has not led to more economic growth and has not benefitted the poor to the same extent as regional comparitors, although the poverty headcount has shifted slightly during the first decade of the 2000s (SHIES 2010). Much of the increased spending has gone to current expenditures related to wages, transfers, and subsidies. The wage bill today constitutes over 15 percent of GDP and 55 percent of total public spending; these are some of the highest levels on the African continent. The recent rapid growth in SACU revenues has, however, reversed the fiscal situation, and a sizeable surplus was recorded in 2006/07 and 2012/13. SACU revenues today account for over 50 percent of total government revenues. On the positive side, the external debt burden has declined markedly over the last 20 years, and domestic debt is almost negligible; external debt as a percent of GDP was less than 20 percent in 2006.

Trade partners

The Swazi economy is very closely linked to the economy of South Africa, from which it receives over 90 percent of its imports and to which it sends about 70 percent of its exports. Eswatini has great resources making a good trading partner. Eswatini’s other key trading partners are the United States and the EU, from whom the country has received trade preferences for apparel exports (under the African Growth and Opportunity Act – AGOA – to the US) and for sugar (to the EU). Under these agreements, both apparel and sugar exports did well, with rapid growth and a strong inflow of foreign direct investment. Textile exports grew by over 200 percent between 2000 and 2005 and sugar exports increasing by more than 50 percent over the same period. The continued vibrancy of the export sector is threatened by the removal of trade preferences for textiles, the accession to similar preferences for East Asian countries, and the phasing out of preferential prices for sugar to the EU market. Eswatini will thus have to face the challenge of remaining competitive in a changing global environment. A crucial factor in addressing this challenge is the investment climate. The recently concluded Investment Climate Assessment provides some positive findings in this regard, namely that Eswatini firms are among the most productive in Sub-Saharan Africa, although they are less productive than firms in the most productive middle-income countries in other regions. They compare more favorably with firms from lower middle income countries, but are hampered by inadequate governance arrangements and infrastructure.

Eswatini, Lesotho, Botswana, Namibia, and the Republic of South Africa form the Southern African Customs Union (SACU), where import duties apply uniformly to member countries. Eswatini, Lesotho, Namibia, and South Africa also are members of the Common Monetary Area (CMA) in which repatriation and unrestricted funds are permitted. Eswatini issues its own currency, the lilangeni (plural: emalangeni), which is at par with the South African rand.

Infrastructure

Eswatini enjoys well-developed road links with South Africa. Swazi Rail operates its railroads that run east to west and north to south. The older east-west link, called the Goba line, makes it possible to export bulk goods from Eswatini through the Port of Maputo in Mozambique. Until recently, most of Eswatini's imports were shipped through this port. Conflict in Mozambique in the 1980s diverted many Swazi exports to ports in South Africa. A north-south rail link, completed in 1986, provides a connection between the Eastern Transvaal (now Mpumalanga) rail network and the South African ports of Richards Bay and Durban. From the mid-1980s foreign investment in the manufacturing sector boosted economic growth rates significantly. Since mid-1985, the depreciated value of the currency has increased the competitiveness of Swazi exports and moderated the growth of imports, generating trade surpluses. During the 1990s, the country often ran small trade deficits.

Sugar industry

Eswatini is the fourth largest producer of sugar in Africa and is 25th in production in the world.[4] This demonstrates the immense focus of the industry in order to continue to grow their economy. Eswatini’s GDP was $8.621 billion (US dollars) in 2014 based on purchasing power parity and of that 7.2% of that is from the agriculture sector and of that sector, sugarcane and sugar products have the largest impact on GDP. According to the World CIA Factbook, wood pulp and sugarcane were the largest exports of Eswatini until the wood pulp producer closed in January 2010.[5] This left the sugarcane industry as the sole main export. The largest company that produces sugar in Eswatini is the Royal Swaziland Sugar Corporation (RSSC) and it produces a little under two-thirds of total sugar in the country and produces over 3,000 jobs for the people of Eswatini. The RSSC is composed of two main sugar mill producers, Mhlume and Simunye, which produce a combined 430,000 tons of cane per season. The second largest sugarcane company is Ubombo Sugar Limited which has grown from producing 5,600 tons in 1958 to approximately 230,000 tons of sugar annually. The third largest sugarcane producer is the Tambankulu Estate (largest independent sugar estate)and it produces 62,000 tons of sugar annually on 3,816 hectares of land.[6]

The largest export partners of Eswatini and the larger Southern African Development Community (SADC) is the European Union. The SADC is a group of many southern African countries who have banded together in order to try to improve their individual socioeconomic status. In 2014-2015 the sugar production of Eswatini was 680,881 metric tons and of this about 355,000 metric tons of sugar was shipped to the European Union, larger than any other export partner. Another trade partner for Eswatini was the United States where they shipped 34,000 metric tons of sugar in the 2014-2015 year under the Tariff Rate Quota. These numbers are up from past years and continue to rise. The expected output based on the 2015-2016 post forecast predictions are that Eswatini will produce 705,000 metric tons, a new record for the country that can be attributed to an increase in land being available for sugar cultivation. Of this predicted figure about 390,000 metric tons will go to the European Union as part of a new Economic Partnership Agreement (EPA). This new agreement between the EU and SADC means that members like Eswatini can sell their sugar on a duty-free and quota-free basis.[4]

The quotas that the EU and the United States fill is similar to the Sugar Protocol which began in 1975. The goal of the Sugar Protocol was for the EU to purchase and import specific quantities from countries in Africa, the Caribbean and the Pacific. These prices and quantities guaranteed production and were well above the world price, which translated into substantial profits for these mostly impoverished countries.[7] This agreement reached an end in 2009 because the EU could no longer support the pre-determined demands. The Sugar Protocol came to an immediate end and was replaced with separate Economic Partnerships with the varying countries and regions. Even though the demands will be just as high as under the Sugar Protocol, the prices will drop significantly.[8] In the case of Eswatini, they have received good reassurance that their product will still be bought by the EU.[4]

Mining

Currently, Eswatini’s mineral sector is governed under a policy drawn up prior to Eswatini’s independence. In response to the sector’s recent decline, a new mining policy is being drafted by consultants, paid for by a grant from China, and legislation to facilitate small-scale mining has also been proposed.[9]

The country’s main source of foreign exchange is the Bulembu asbestos mine, however production has hit a steep decline. Diamond, iron ore and gold have also been found in the past, however a lack of investment and development policy has seen the region’s potential falter.[9]

Although fewer than 1,000 Swazis are directly employed in the mining sector, many workers from Eswatini processed timber from the country's extensive pine populations for mines in South Africa, and around 10,000–15,000 Swazis were employed in South African mines. Their contributions to Eswatini's economy through wage repatriation have been diminished, though, by the collapse of the international gold market and layoffs in South Africa.[10]

Other economic statistics

The following table shows the main economic indicators in 1980–2017.[11]

Jahr 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GDP in $
(PPP)
0.90 Bln. 1.50 Bln. 2.95 Bln. 3.84 Bln. 4.83 Bln. 6.52 Bln. 7.06 Bln. 7.54 Bln. 7.90 Bln. 8.32 Bln. 8.72 Bln. 9.07 Bln. 9.56 Bln. 10.18 Bln. 10.74 Bln. 10.97 Bln. 11.11 Bln. 11.34 Bln.
GDP per capita in $
(PPP)
1,653 2,359 3,793 4,421 5,033 6,537 7,000 7,387 7,658 7,978 8,268 8,502 8,853 9,317 9,712 9,807 9,814 9,884
GDP growth
(real)
−3.8 % 3.8 % 8.9 % 4.0 % 2.6 % 5.5 % 5.2 % 3.9 % 2.8 % 4.5 % 3.5 % 2.0 % 3.5 % 3.5 % 3.6 % 1.0 % 0.0 % 0.2 %
Inflation
(in Percent
18.2 % 20.5 % 13.1 % 12.3 % 12.2 % 1.8 % 5.2 % 8.1 % 12.7 % 7.4 % 4.5 % 6.1 % 8.9 % 5.6 % 5.7 % 5.0 % 8.0 % 6.3 %
Government debt
(Percentage of GDP)
... ... ... 12 % 17 % 13 % 14 % 15 % 14 % 10 % 14 % 14 % 15 % 15 % 14 % 18 % 25 % 29 %

Household income or consumption by percentage share:
lowest 10%: 1.6%
highest 10%: 40.7% (2001)

Industrial production growth rate: 1% (2001 est.)

Electricity – production: 470 GWh (2008), 420 GWh (1998)

Electricity – consumption: 1,207 GWh (2008), 962.9 GWh (2001), 1.078 GWh (1998)

Electricity – exports: 0 kWh (2009, 2001, 1998)

Electricity – imports: 768 GWh (2009), 639 GWh (2001), 687 GWh (1998)
note: imports about 60% of its electricity from South Africa (2009)

Currency: 1 lilangeni (E) = 100 cents

Exchange rates: emalangeni (E) per US$1 – 7.3 (2011), 7.32 (2010), 8.42 (2009), 7.75 (2008), 7.4 (2007), 10.5407 (2002), 8.6092 (2001), 6.9398 (2000), 6.1087 (1999), 5.4807 (1998), 4.6032 (1997), 4.2706 (1996), 3.6266 (1995); note – the Lilangeni is at par with the South African rand

See also

References

  1. ^ a b "Swaziland". International Monetary Fund. Retrieved 18 April 2013.
  2. ^ "World Bank forecasts for Swaziland, June 2018 (p. 154)" (PDF). World Bank. Retrieved 6 September 2018.
  3. ^ "Ease of Doing Business in Swaziland". Doingbusiness.org. Retrieved 2017-01-24.
  4. ^ a b c Swaziland Sugar Annual Report 2014-2015
  5. ^ World CIA Factbook, "Swaziland: Economy"
  6. ^ Mbendi Information Service, ["Sugarcane Farming in Swaziland"
  7. ^ Delegation of the European Union: 'Sugar Protocol'
  8. ^ http://www.bbc.co.uk/caribbean/news/story/2007/09/070928_sugarprotocol.shtml BBC Caribbean: 'Sugar Protocol Scrapped']
  9. ^ a b Mbendi Information Services, "Mining in Swaziland - Overview", Mbendi Information Services
  10. ^ Encyclopedia of the Nations, "Swaziland - Mining", Encyclopedia of the Nations'
  11. ^ "Report for Selected Countries and Subjects". Retrieved 2018-09-11.

External links

Central Bank of Eswatini

The Central Bank of Eswatini (Swazi: Umntsholi Wemaswati), is the central bank of Eswatini. It was established in April 1974 and is based in capital Mbabane. According to the bank's website, the bank's mission is to promote monetary stability and foster a stable and sound financial system.

Among the bank's responsibilities are managing Swaziland's foreign exchange position and safeguarding the country's foreign reserves of cash. The bank conducts weekly auctions of 91-day Swazi treasury bills, through "primary dealer" Swazi banks.The current governor is Majozi V. Sithole.

Ezulwini Handicrafts Centre

Ezulwini Handicrafts Centre is a handicrafts centre of notable regional significance located in the Ezulwini Valley in northwestern Eswatini, off the MR3 road. The centre was opened following investment by Taiwanese entrepreneurs and features many locally made sculptures, jewelry, textiles and other crafts.

List of Swazi billionaires by net worth

This is a list of Swazi billionaires based on an annual assessment of wealth and assets compiled and published annually by Forbes magazine.

List of banks in Eswatini

This is a list of commercial banks in Eswatini

SwaziBank

Nedbank Swaziland

Standard Bank Swaziland

First National Bank Swaziland

Swaziland Building Society

Outline of Eswatini

The following outline is provided as an overview of and topical guide to Eswatini:

Eswatini (officially the Kingdom of Eswatini) – small, landlocked, sovereign country located in Southern Africa, bordered by South Africa on three sides except to the east, where it borders Mozambique. The country, inhabited primarily by Bantu-speaking Swazi people, is named after the 19th-century king Mswati II, from whom the people also take their name.

Swazi lilangeni

The lilangeni (plural: emalangeni, ISO 4217 code: SZL) is the currency of Eswatini and is subdivided into 100 cents. It is issued by the Central Bank of Eswatini (Swazi: Umntsholi Wemaswati). The South African rand is also accepted in the country. Similar to the Lesotho loti, there are singular and plural abbreviations, namely L and E, so where one might have an amount L1, it would be E2, E3, or E4.

Swaziland National Ex-Mineworkers Association

The Swaziland National Ex-Mine Workers Association (SNEMA) is an organisation of ex-miners, who at one point were employed in mines in South Africa. The organisation has over 700 members. Many of the members have sustained injuries or illness from working in the mines, and have been declared redundant. And many of the ex-mineworkers have not been compensated for these injuries or paid the pensions they are due.

SNEMA is not a political organisation as such, taking a more broad rights-based approach in support of Swaziland's poor, particularly in relation to procuring the unpaid compensation that they believe they are due from the mining industry. In doing this, SNEMA seeks to disseminate its message through mobilisation and civic education. SNEMA is a member of the Swaziland United Democratic Front.

SNEMA see the main problems in trying to procure their compensations as being:

Lack of knowledge of rights amongst ex-mine workers.

Lack of access to provident fund money.

Lack of compensation to widows of ex-mine workers.

Lack of care for sick and injured ex-mine workers, many of whom live in the rural areas of Swaziland where medical care facilities are rudimentary at best.

Lack of support from the Swaziland government in accessing medical examinations to prove the illnesses, mainly tuberculosis and silicosis, or in helping addressing the above-mentioned problems.

Lack of support from the South African government and South African mining industry in addressing the above-mentioned problems.

Lack of support from other relevant bodies or organisations in addressing the above-mentioned problems.SNEMA has successfully taken the Swazi Government to court over its unfulfilled promise to provide free primary school education (section 29 (6) of the constitution). The ex-miners argued that the persistent lack of education of their children at primary school level is a complete and unlawful violation of the constitution. The court case followed the refusal of government to respect the ruling of the High Court on the same issue on 16 March 2009, wherein it issued a declaratory judgement pronouncing that the Government of Swaziland has the responsibility to provide free primary school education across all grades in public primary schools in accordance with the Constitution.

Swaziland Stock Exchange

The Swaziland Stock Market is a small but thriving stock exchange. The stock exchange was established in July 1990 by Sibusiso Dlamini, a former World Bank executive who became Swaziland's prime minister, to enable ordinary Swazis to become stakeholders in their economy. All listings are included in the sole index, the SSM Index, which is unweighted. There are a handful of listed public companies, as well as some listed government stock options, listed debentures, government guaranteed stock and non trading mutual funds.

Exchange Control approval is required for foreigners wishing to invest on the stock market.

Stockbrokers on the Exchange are licensed by the Central Bank of Swaziland and there is no regulation regarding the foreign ownership of brokerage firms.

Telecommunications in Eswatini

Telecommunications in Eswatini includes radio, television, fixed and mobile telephones, and the Internet.

Transport in Eswatini

Public transport is the main means of transportation in Eswatini. Car ownership is low, at 32 cars per 1,000 people. The National Road Network has 1500 km of main roads and 2270 km of district roads.

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