Economy of Swaziland

By | May 11, 2022

According to businesscarriers, the economy is characterized by stable development. GDP $4.6 billion, 5% growth (2001). GDP per capita is one of the highest in Africa at $4,200. The formal sector of the economy employs 340 thousand people. (2001, estimate). Unemployment is 34% (2001), it is weakened by otkhodnichestvo in South Africa. Inflation 7.5% (2001).

Sectoral structure by contribution to GDP (1999,%): agriculture – 10, industry – 43, services – 47.

The most important sector of the economy has become the manufacturing industry (35% of GDP), which is based on the agricultural and forest resources of Swaziland. The main enterprises are sugar production (about 500 thousand tons), wood processing (220 thousand tons of pulp), fruit and cotton processing plants. However, since the 1980s new industries appeared – the production of cotton and synthetic fibers, textiles, shoes, leather goods, glass, building materials, cardboard, electrical equipment, electronics, refrigerators, assembly of buses, computers.

The mining industry is in decline. The deposits of iron ore were depleted, the miners stopped mining diamonds, unable to penetrate deep into the deposit, the demand for asbestos fell. In 2000, 380 thousand tons of coal and 12.7 thousand tons of asbestos were mined.

The potential for the development of hydropower is significant due to the presence of mountain rivers, but so far hydroelectric power plants generate 44% of the electricity in the country. Most of the energy comes from South Africa. In 2000, its consumption amounted to 900.7 million kWh, and 362 million kWh were produced in the country.

44% of all land is owned by white farmers and foreign companies. The rest is considered the property of all Swazis, but only half of the Swazi lands are allocated for peasant plots. This is the subsistence sector, producing only 1% of GDP. The other half of the Swazi land is dedicated to the cultivation of marketable products by state-owned companies. Most of the corn and cotton in the country are grown in these areas.

The main commercial crops (thousand tons, 2000): sugar cane – 3885, corn – 85, citrus fruits – 73, pineapples – 20, cotton – 7. Sugar cane provided up to 13% of foreign exchange earnings, but now its exports have fallen due to the construction sugar mills in Swaziland itself. The corn harvest does not cover the country’s needs of 140 thousand tons, and grain has to be imported from South Africa. Cattle breeding has no commercial value. The number of cattle in 2000 was 608 thousand.

Railways that cross the country link Swaziland with South Africa and Mozambique. The length of railways is 297 km (2001). The annual traffic volume is 1250-1300 million passenger-km and 4.3-4.5 million tons of cargo. The length of roads is 3800 km, of which 1064 km are paved (2002).

The country has 2 airports and 16 airstrips. Mbabane and Manzini are connected by air with the cities of South Africa and Mozambique. Transportation is carried out by Airlink (South Africa).

Telephone communication is carried out at the modern level through digital telephone channels, communication satellites and mobile phone systems. The number of fixed phones is 38.5 thousand, mobile phones – 45 thousand (2001). There are 8 radio stations and 5 television stations. The number of Internet users is 14 thousand (2002).

All wholesale and retail trade is in private hands. Cooperation has been developed (123 trade and marketing cooperatives).

Tourism began to develop rapidly after 1994. In 2000, 353 thousand tourists visited the country, mainly from South Africa, and tourism revenues amounted to 47 million US dollars.

The government’s economic policy in agriculture is aimed at increasing production through irrigation, and in industry – at the diversification of manufacturing industries in order to reduce the dependence of the economy on the export of raw materials. It intends to achieve this through external investment, but in 2000 difficulties arose in relations with the IMF, which, along with the usual recommendations – speed up privatization, increase budget revenues – noted the need to control government spending, which is difficult to implement without democratic reforms and the creation of legal opposition.. Politics in the social sphere has a dual character. The government regularly indexes the salaries of civil servants and encourages the private sector to do the same. As a result, there were no major strikes in 2001–02.

The financial system is closely tied to the financial structure of South Africa. Swaziland is part of the rand currency zone, the South African rand is in circulation in the country on a par with langeni. The Central Bank of Swaziland is forced to adjust the langeni exchange rate, its emission, anti-inflationary measures, etc. in accordance with the policy of the Reserve Bank of South Africa. There are 2 commercial and 3 investment banks.

Since 1999 the budget has been constantly in deficit. Revenues $448 million, expenses $506.9 million including capital budget ($147 million, 2001/02). In the 2002/03 budget, taxes on goods, services and foreign trade account for 67% of budget revenues. External debt 336 million US dollars (2001).

The standard of living of the majority of the rural population is very low, since the land plots of less than 2 hectares allocated by the leaders make it difficult to feed a family even in harvest years. The standard of living in cities is much higher. Although the cost of living index in 1998-2001 increased by 6-7% per year, the growth of real wages was approximately the same. Bank deposits increased (619 million langeni in 2001).

Foreign trade (million dollars, 2001): export – 702, import – 850. Main export items: sugar cane, pulp, sugar, soft drink concentrates, fruits. Main import items: vehicles, equipment, foodstuffs, oil products. 90% of imports and 66% of exports come from South Africa.

Economy of Swaziland