Impact of Slow Global Growth on Swaziland

PESA Editorial – Swaziland - 1Q2017/18

The Kingdom of Swaziland is one of the smallest countries on the African continent in terms of both population (1 109 000) and land area. The country is an absolute monarchy and the current constitution governing the country was adopted in 2005. It is a member of SACU, from which it benefits immensely, with 37% of its revenue coming from customs union receipts. On 1 January 2015, Swaziland was removed from AGOA by the then President of the US, Barack Obama. The country’s manufacturing sector growth subsequently declined in 2015 to 1.8% from 3.9% in the previous year1, because the country could no longer enjoy the benefits of AGOA.

 

South Africa is Swaziland’s biggest trading partner. Swaziland exports 60% and imports 90% of its goods to and from South Africa2. As such, Swaziland’s economy is directly influenced by the performance of the South African economy. Swaziland also depends on other foreign countries for food and health assistance, particularly the US. The US foreign policy, which to some extent is determined by its economic performance will have a great impact on countries like Swaziland, which are heavily dependent of foreign. Even small countries like Swaziland with economies that may seem too small to be influenced by events in major global economies, are affected either directly or indirectly by the global economy.

 

Swaziland is faced with the huge problem of curbing the spread of HIV within its population. In 2003, the Centre for Disease Control and Prevention estimated that Swaziland had the world’s highest rate of HIV infected adults. The Centre also listed HIV as the highest cause of death in adults, with 37% of deaths in the country owing to the disease. The low life expectancy rate of 58 years in females, and 54 years in males, is partly due to this high rate of HIV related deaths. With the help of other international organisations, the country has put measures in place to tackle the disease. Whether these measures are effective or not will be indicated by the latest statistics when they are published. The disease is both an economic and a social problem in the country. The country’s active population has been depleted by the disease and this has had a negative effect on its labor force.

 

The number of child-headed households has risen due to the high mortality rate, in turn raising the country’s poverty levels and putting even greater pressure on the fiscus of the country. This is evident in the high levels of child malnutrition (DHS surveys 2006), with 46 000 of the 156 000 children (approx. 30%), under the age of five growing up stunted and underweight. In the 2017 WFP country brief, it was stated that 31% of children between 0-59 months had chronic malnutrition and that 350 000 people in the country were in need of food aid. According to COHA (Swaziland), children with under-nutrition are more susceptible to recurring illness and this presents a future cost for the country. HIV therefore presents a huge current and future cost to the economy of the country, and more needs to be done to effectively combat it.

 

The country faces no political unrest and has been ruled by the monarchy since 1968 when it became independent from the United Kingdom. Swaziland may be classified as a low middle income country but 63% of its people live under the national poverty line3. This shows that the distribution of wealth is uneven, and may be attributed to a lack of effective governance or policy execution. During the period of 2005 to 2007, the country had an unemployment rate of 29.1%4. A majority of the country’s population lives in rural areas and depends heavily on subsistence farming for their livelihood. It is this part of the population that requires food assistance during the lean season.

 

The country should implement more robust policies to fight poverty as it stems from the high levels of HIV infections. The long term effects of HIV will continue to be detrimental for the economy. For this reason, combating the disease should remain the country’s top priority. More should be done to diversify the economy, as well as bolster existing sectors. Swaziland is a beautiful country and its tourism sector should be developed in order to derive optimum revenue. To this end, the Ministry of Finance has allocated E14 million (R14 million) to the Swaziland Tourism Authority for tourism promotion5. This will go a long way in reducing the high level of unemployment and poverty in the country. The country should also improve its governance in order to regain its AGOA benefits. Life after AGOA has not been prosperous for Swaziland.


1 Swazi Central Statistics Office
2 African Growth and Opportunity Act
3 World Food Programme
4 Swazi Ministry of Economic Planning and Development
5 Swazi Ministry of Finance


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