Economy of Swaziland



Structure

Swaziland maintains close economic and trading links with South Africa and the other adjacent states of Botswana, Lesotho, and Namibia through the Southern African Customs Union. She is also party to a number of international and regional trade agreements which place local exporters in an advantageous position.

The country's industrial and agricultural activity is diverse, particularly considering her small size.

The main crops grown for export are sugar cane and citrus fruit while unbleached kraft pulp, produced from locally grown pine trees, is also a significant forex earner. Beef production for export markets is a growing sector.

Manufacturing industries, many of which are value-added through utilizing local raw materials, embrace a wide range of products. These cover food and beverage, including soft drink concentrates which are produced for several other African countries; clothing and textiles; timber, including furniture; pulp and paper; refrigerators; metal and engineering; glass and chemicals and a wide variety of handcrafts.

Manufacturers have become the greatest forex earners with soft drinks, furniture and refrigerators accounting for more than 50% of exports.


Economic Performance

As a small land-locked country which relies on export industries, Swaziland's economy has shown resilience during the recent adverse conditions of recessinary trends and prolonged drought.

The gross domestic product has grown from E102.7 million in 1972/3 to well in excess of one billion Emalageni just over 20 years later.

Average annual growth has been 3.8% with noticeable changes in the economic structure, from agriculture to industry based, due to the rapid industrial growth which occurred during the second half of the 1980's.

The outlook is that the economy will grow in real terms - 4.8% for 1994/5 and by between 1% and 5% in 1995/6 depending on prevailing trends. These forecasts allow for inflation.

Individual tenure farms are predicted to realise low growth rates of between 1% and 2.7% due to lack of scope for increased acreage and higher yields.

Swaziland is a member of the Common Monaetary Union, an agreement which links the Lilangeni to the South African Rand. At mid-1995 the Rand/$ US rate was about 3.6/1 and the Rand/Sterling rate about 5.7/1.

Foreign investment increased with funds injected into the economy for the expansion and development of existing operations.

Inflation

During recent years, inflation has performed on an upward curve and by May 1995 had reached an average of 14.6% for all income groups, mainly attributable to increased food prices and higher education and medical costs. Inflation is recorded at 13.8% for the year 1994/5.


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