Economical overview
Swaziland has a high gross domestic product
(GDP) per inhabitant, measured by African dimensions.
However, the income is unevenly distributed among the
inhabitants. Four-fifths of the population performs
small-scale agriculture and livestock management for
housing needs on land owned by the King.
Export crops such as sugar cane, cotton, citrus
fruits and pineapples are grown on around 40 percent of
the agricultural land. The great importance of
agriculture to the Swazis makes them dependent on good
weather conditions. Recurrent droughts have periodically
created food shortages and even famine.
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Countryaah.com:
Major imports by Swaziland, covering a full list of top products imported by the country and trade value for each product category.
Despite the fact that the vast majority of Swazis
feed on agriculture, the industry accounts for a
multiple share of the country's GDP. The food industry,
where foreign companies have invested, is most
important. Important export goods from the industry are
sugar, fruit concentrate and cotton yarn.
Swaziland has assets of coal, diamonds and gold, but
the mining industry has declined economically since the
1960s. However, many Swazi men work in South African
mines and thus provide for their families at home.
However, cuts in South Africa's mining industry during
the 2000s led many Swazi guest workers to move home.
Thus, the money the men send home has diminished in
importance to the country's economy. To a certain
extent, this loss has been offset by the increasing
number of well-educated Swaziland people working in
South Africa and the United Kingdom and sending money
from there.
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Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including SWZ which represents the country of Swaziland.
AIDS a threat to the economy
Between 2004 and 2013, economic growth averaged just
over 2 percent per year. During the first two years, the
economic development of drought and a decline in the
textile industry were hampered (see Industry). Growth in
the following years, thanks to better weather conditions
and greater demand for the country's export products.
However, widespread corruption has reduced the
willingness to invest with foreign investors and
international financial institutions such as the
International Monetary Fund (IMF). Not least, the royal
house's waste of state assets has contributed to this
(see Modern History and Current Policy). The result has
been low tax revenues to the Treasury and constant
budget deficits.
However, the biggest threat to Swaziland's long-term
economic development is the fact that the AIDS epidemic
has hit the country very hard (see also Social
conditions).
Swaziland is heavily dependent on the South African
economy. The Swaziland currency, lilangeni, is
linked to the South African Rand and the country is part
of the South African Customs Union (Sacu), which brings
significant revenue to the state. South Africa is one of
the most important investors in Swaziland's industry.
There is a program for privatizations and other
market economy reforms, but conservative groupings
within the ruling elite have slowed the pace of reform.
Airlines, dairies and water companies are examples of
companies that have been privatized.
Swaziland's external debt in 2013 corresponded to
almost a tenth of GDP. In 2012, the country received $
89 million in official development assistance. In the
case of drought and famine, the dependence on aid
increases considerably.
Acute economic crisis
A severe financial crisis in the first half of 2011
led to an acute shortage of money in the Treasury. The
crisis was mainly caused by sharply declining revenue
from the Sacu Customs Union and by high costs for the
royal house and the salaries of public servants. The
budget deficit exceeded 14 percent of GDP, while the
foreign exchange reserve fell for the 17th consecutive
month to $ 523 million, which would be enough for two
weeks of imports. Swaziland turned to the IMF with a
loan application, but the fund demanded, among other
things, increased taxes and reduced salaries for
government employees. The government then appealed to
South Africa for a loan. This was granted, but the South
African government demanded that economic and political
reforms, such as reduced costs for the court, be
implemented in Swaziland. Swaziland therefore refused
the loan.
In 2013, the economy turned slightly up, mainly
thanks to increased revenue from the Customs Union, Sacu
and an increased tax collection. The financial year
2012/2013 showed a small surplus and the foreign
exchange reserve strengthened somewhat. In November
2014, the World Bank approved a financial support
program for the period 2015–2018. In particular, the
money would be spent on poverty reduction, attempts to
increase Swaziland's competitiveness in the world market
and to create new jobs in tourism and agriculture.
However, the government did not use the increased
revenue to pay off debts and more, but instead increased
the expenditure. In 2014, for example, the court's
budget was increased by 10 percent. Thus, the country's
economic outlook continued to look bleak.
FACTS - FINANCE
Currency
Lilangeni
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