SWAZILAND

Kingdom of Swaziland

COUNTRY OVERVIEW

LOCATION AND SIZE.

Swaziland is a small landlocked country in southern Africa, with an area of 17,363 square kilometers (6,704 miles), extending 176 kilometers (109 miles) north to south and 135 kilometers (84 miles) east to west. By comparison, it is slightly smaller than the state of New Jersey. It shares a border of 105 kilometers (65 miles) to the east with Mozambique and is otherwise surrounded by South Africa, with which it shares a total border of 430 kilometers (267 miles). It is divided from east to west into 4 well-defined regions: the High-Veld, Middle-Veld, and Low-Veld, and the Lubombo plain and escarpment. Their height ranges from the High-Veld in the west which rises to 1,850 meters (6,070 feet) and the Low-Veld which stands at only 300 meters (985 feet) above sea level. The country is traversed by rivers and streams, making it one of the most well-watered areas of southern Africa.

POPULATION.

In 2001, the population was estimated at 1,101,343. The population has risen from 906,000 in 1997, and from 712,313 in 1986. The population grew at 2.9 percent annually between 1970-90 and 2.8 percent between 1990-97, while life expectancy in 2001 was 60 years (though the CIA World Factbook reports a figure of 38.62 years). The population growth rate in 2001 was1.83 percent, based on a birth rate of 40.12 per 1,000 and a death rate of 21.84 per 1,000, all based on 2001 estimates. About 33 percent of the population live in urban areas. It is a relatively young population with more than half of the population below 20 years of age.

Around 90 percent of the population are Swazi (although there are around 70 district groups), and most of the rest are Zulu, Tonga, Shangaan, European, and people of mixed descent. Large numbers of Mozambicans fled to Swaziland to escape the civil war in their country, but repatriation was completed in 1993 following a return to peace in Mozambique. About 77 percent of Swazi are Christian, with the rest practicing Islam or traditional faiths. English is an official language and the language of government and business, and is widely spoken alongside siSwati, the other official language.

OVERVIEW OF ECONOMY

Swaziland has one of the highest per capita income levels in Africa, although it is, after the Gambia, the smallest state on the mainland of the continent. According to the CIA World Factbook, Swaziland's gross domestic product ( GDP) per capita in 2000 was estimated at US$4,000 at purchasing power parity , high enough to rank Swaziland as a middle-income country.

Swaziland experienced slow growth in the 1980s and early 1990s, a period much influenced by world recession and then political changes in South Africa, but there were still increases in the gross national product (GNP) per head of 2.3 percent a year over the period 1980 to 1993. Swaziland has, over the longer period, had one of the most liberal policies towards foreign and private investment in all of Africa. Its vulnerability lies in heavy export dependence on soft drink concentrate and sugar cane and on the strong economic links with South Africa which provides imports, an export market, investment, and employment.

Since the late 1980s the country's economic situation has improved noticeably. The economy has grown more rapidly and foreign investment expanded. A significant part of the food produced is now sold to the European Union (EU). This improvement—initially a direct consequence of trade sanctions against South Africa which forced the EU to turn to Swaziland as an alternative source of food supplies—has allowed the manufacturing sector to increase in importance, contributing 20 percent of the GDP by 1991 and helping the country raise its economic growth rate to 3.5 percent per year.

There is a dual administration of Swaziland's official resources. The communal land resources (known as Swazi National Land or SNL) and the minerals, are managed by Tibiyo Taka Ngwane, an independent institution created by Royal Charter in 1968 and not responsible to Parliament. The non-communal land and all the other resources are subject to the legislation of Parliament.

Swaziland is committed to a free market economy and private ownership: nationalization is illegal. The Swaziland Investment Promotion Authority was set up in 1997 to encourage the growth of private business. Investment accounted for 34 percent of the GDP in 1997, and foreign direct investment was 5.7 percent of the GDP, both very high figures. The government wants to encourage the expansion of industrial sites. The Swaziland stock exchange was established in 1990 and by the late 1990s had 6 companies listed and a market capitalization of US$129 million.

POLITICS, GOVERNMENT, AND TAXATION

Swaziland, a British protectorate since 1867, became independent on 6 September 1968. The Kingdom of Swaziland is an absolute monarchy. The king appoints the prime minister and the council of ministers (cabinet) and can legislate by decree. A new constitution was launched in 1968. However, in 1973 the king repealed the constitution, abolishing Parliament and all political parties.

A system of government with elections for local councils, who then chose their representatives in the National Assembly, was introduced in 1978, creating a 2-tier form of representative government which was reformed in 1993 to allow the introduction of secret ballots and the direct election of National Assembly members. The vote was granted to all citizens over the age of 21 who were not insane or had not committed serious crimes. There are 30 senators, of whom 20 are appointed by the king and 10 elected by the National Assembly. The National Assembly consists of 65 deputies, of whom 55 are directly elected from candidates nominated by the local councils and 10 appointed by the king.

In 1998 government revenues amounted to 27 percent of the GDP. The most recent year for which tax revenue data are available is 1987, when taxes on income, profits, and capital gains generated 38 percent of government revenue, domestic taxes on goods and services 11 percent, export levies and import duties 42 percent, other taxes 1 percent, and non-tax revenue 7 percent.

The corporate income tax is 37.5 percent. Small mining companies with net income below the equivalent of around US$2,500 are taxed at 27 percent. There is a withholding tax of 15 percent on dividends paid overseas, and dividends paid to residents are taxed at 10 percent. There are tax breaks for companies producing for export, and for companies with staff training programs.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

Swaziland has a good road network with 3,000 kilometers (1,864 miles) of roads, 28 percent of which were paved by 1997. In 1997, there were 78,900 motor vehicles licensed, 4,320 of which were government-owned. Rail service is for freight only. The Kadaka-Goba line links up with Mozambique's Maputo line (providing Swaziland with access to the sea), and since 1986 there has been a direct heavy-duty connection between Mpaka and South Africa. Matsapha International Airport is 8 kilometers (5 miles) from Manzini. The national airline, Royal Swazi National Airways Corporation, operates flights throughout the region.

Swaziland generates its power from coal and hydropower. Oil and the coal used for domestic energy generation are imported from South Africa. Swaziland Electricity Board imports over 80 percent of its electricity from South Africa and generates the balance from diesel and hydropower. In 1998 Swazis consumed 198 million kilowatt hours (kWh) of electricity. On-site power generation takes place at the large sugar and wood pulp plants (from waste sugar cane or scrap wood), but they only generate for their own needs. Wood is still an important fuel for the rural population.

English language dailies are The Times of Swaziland and The Swami Observer. There were 27 daily newspapers in 1996. The Swaziland Broadcasting Service runs several radio stations, broadcasting in siSwati and English. There is a television channel, run by the Swaziland Television Authority (STA), which covers 80 percent of the population and 60 percent of the country. STA has a monopoly in the TV rentals market. There were 170 radios and 23 TV sets per 1,000 people in 1996.

All the main population centers have post offices. International direct dialing is available. The telephone network comprises 14 digital, 5 analog, and 3 manual exchanges. There were 33,500 telephone main lines in use in 2000, in addition to 20,000 cellular phones.

ECONOMIC SECTORS

The economy of Swaziland depends on soft drinks concentrates and sugar cane for export revenue and on South Africa, which provides significant trade investment and employment. However, Swaziland has one of the best

business environments in Africa as a result of its liberal policies towards foreign and private investment since independence. In 2000, the composition of Swaziland's GDP was as follows: agriculture, 10 percent; industry, 46 percent; and services, 44 percent.

AGRICULTURE

Agriculture's share of the GDP fluctuates with the fortunes of the harvest, accounting for 10 percent of the GDP in 2000, 13 percent in 1998, and 11 percent in 1994. The chief products are sugar, wood pulp, maize, citrus, and pineapples. About 44 percent of land is held on a free-hold basis (that is, the ownership is for an indefinite period in which the owner is free to buy and sell the land), mainly by non-Swazis. Large estates controlled mainly by Europeans produce the sugar, citrus fruits, and forestry products that dominate exports. The remainder of the land, known as Swazi Nation Land (SNL), is farmed on a small-scale by 70 percent of the population, in many cases on a part-time basis. The land is held in trust by the king. All Swazis are entitled to land, which is allocated by the chiefs according to traditional procedures.

Sugar used to be the mainstay of the economy until it was overtaken by fruit concentrates. However, it remains the country's largest source of employment. Maize, the country's staple food, and cotton are the main products of SNL farmers. Large-scale cotton production is being introduced as the Royal Swaziland Sugar Corporation begins to diversify into this crop. Oranges and grapefruit are grown for export on large estates, mainly controlled by Europeans, and mainly in the Low-Veld area.

Unbleached wood pulp is 1 of Swaziland's main export earners. Plantations cover 6 percent of the country, mainly in the High-Veld. Nearly two-thirds of this is made up of Usutu forest, one of the largest man-made forests in the world. The Usutu forest consists mainly of pine and eucalyptus and alone provides about 12 percent of the world supply of wood pulp. The Usutu pulp company is the country's largest employer. Indigenous industry produces mining and construction timber and furniture from local wood, some of which is exported.

Cattle are the traditional sign of wealth, and 80 percent of the cattle population remains in the hands of Swazi smallholders . The traditional nature of cattle raising has led to the slow development of the meat industry, as there is a strong resistance to offering cattle for slaughter. Domestic milk production is increasing and beef, tinned and frozen, is exported to the EU and South Africa.

INDUSTRY

The industrial sector is dominated by agro-industries involving local sugar, wood pulp, citrus and other fruit, cotton, and meat. Swaziland has been successful in attracting investment from Coca-Cola (which opened a concentrate plant in 1986) and Cadbury (which opened a new sweets factory in 1989). These, combined with continued investment from the Far East (4 Taiwanese-owned textile plants were opened in 1986), and investments in the mid-1990s in refrigerator production, means that the manufacturing sector continues to grow. However, there has been some domestic unrest caused by low wages.

Mining has fallen in importance since the 1960s, contributing only about 1 percent of the GDP in 1997-98. High-grade iron ore was exhausted by 1978, and health concerns have reduced the world demand for asbestos. Asbestos mining (by a joint venture between the government and a South African Company, HVL Asbestos) is nevertheless the principal mining activity. Production was 27,700 tons in 1998, and most of this was exported. Deposits are mainly in the High-Veld.

The diamond mine at Dvokolwako closed at the end of 1996. A new coal mine at Maloma in the south of the country opened in 1993 which produces mainly anthracite for export to Europe (203,100 tons in 1997 and 410,000 tons in 1998). It replaced the now closed Mpaka Mine as the main source of coal. Stone is quarried at 3 centers, and production is increasing. Local construction and roads industries take all stone production.

SERVICES

The services sector is very significant to the Swazi economy, comprising 44 percent of the GDP in 2000, up from 37 percent in 1994. Government services accounted for 20 percent of the GDP in 1996-97, and amounted for the majority of services production. Private sector services were dominated by tourism giant, Swazi Spa Holdings (a subsidiary of Sun International, a South African Hotel group). Tourism is mostly on a package-tour basis, and most visitors come from South Africa. The attractions are wildlife, splendid scenery, and casino facilities. Tourist arrivals numbered 322,000 in 1997, generating receipts of about US$7 million.

INTERNATIONAL TRADE

With a small economy, Swaziland does not have enough domestic demand to provide a basis for a wide range of production. Therefore, it must import a variety of goods. Imports typically outweigh exports, as they did in 2000 when imports were valued at US$928 million and exports at US$881 million.

The country's main exports are soft drink concentrate, sugar, citrus, canned fruit, textiles, wood pulp and refrigerators; the main imports are manufactured consumer goods , machinery, transport equipment, food, chemicals, and fuels. South Africa was far and away the dominant trading partner, taking 65 percent of exports and providing 84 percent of imports in 1998. Other major export destinations were the European Union (EU) (12 percent), Mozambique (11 percent), and the United States (5 percent). Other major importers were the EU (5 percent), and Japan and Singapore (2 percent each).

MONEY

The lilangeni is maintained at par with the South Africa rand, as it is in the de facto rand area involving Swaziland, South Africa, Namibia, and Botswana. The rand was on par with the U.S. dollar in the early 1980s, but has since lost value, very rapidly at times in the latter 1990s. In mid-2001, the lilangeni stood at E8.27:US$1. In March 1995, a 2-tier financial system (which allowed a different exchange rate for certain transactions) was

ended with the abolition of the financial rand, making the currency more vulnerable to international reaction to political developments in South Africa.

POVERTY AND WEALTH

Swaziland is a lower middle-income country, with a GDP per capita in 2000 of US$4,000 using the purchasing power parity conversion factor (which makes allowance for the low price of certain basic commodities in Swaziland). There are no figures for the incidence of poverty, but the number of under-weight children would suggest around 14 percent below the dollar-a-day poverty line. Most of those in poverty obtain their livelihoods from the agriculture sector, and they do not have enough income to provide the barest minimums of food, clothing, and shelter. Income is very unequally distributed, with the poorest 20 percent receiving 2.7 percent of total income in 1998, and the richest 20 percent receiving 64 percent. The poorest groups in the rural areas live in traditional dwellings with timber frames and mud walls, thatched roofing, and a beaten earth or polished cow dung floor. Water comes from a well, sanitation is by pit latrine, cooking is done over a wood fire, and lighting comes from a kerosene lamp.

The poor in the urban areas live in shanty dwellings constructed from timber, plastic sheeting, cardboard and

rusty scrap metal sheets. Water is obtained from a communal tap, sanitation is by pit latrine, cooking is done over charcoal, and kerosene lamps provide light. The wealthier groups live in modern houses with cement block walls and tin roofs, with electricity, piped water, and either a sewage system or a septic tank.

The UN's Human Development Index, which combines measures of income, health, and education, put Swaziland at 112 out of 174 countries in 1998, and this placed it in the medium human development category, one of the few African countries to achieve this status. Thus Swaziland has a level of development with relatively few of its population in poverty (more than 50 percent are in poverty in some countries), and has good basic education provisions, with 95 percent of children in primary school and 85 percent in secondary school, and sound health facilities which allow a life expectancy of 60 years (in the rest of Africa it is 49 years).

WORKING CONDITIONS

In 1997, about 113,000 people were employed in Swaziland: 57 percent in the private sector, 28 percent in the public sector , and 15 percent in the informal sector . An additional 13,000 Swazis worked as miners in South Africa. About 22 percent of the labor force is recorded as unemployed. However, the unemployment rate has little meaning in Africa, for it relates to those registering as looking for jobs in the urban areas as a percentage of the formal labor force. The largest part of the labor force in Swaziland, 60 percent, is in the agricultural sector, much of it in small-scale family farms outside the formal sector.

With no social security provisions, those without work or support from families or charities cannot survive. For much of the year in subsistence farming there is relatively little work to do, and what work there is is shared among the family members. During planting and harvesting, there is more work to be done, and everyone is more fully occupied, but even in these periods, there may be more than enough labor to do the tasks, and the work is again shared. Everyone sharing the work appears to have an occupation in agriculture, but in fact workers are not engaged full time for all the year, and hence there is some disguised unemployment.

There is a Federation of Trade Unions in Swaziland. Minimum wage levels are set, but the level is low, particularly for female agricultural workers, to avoid creating unemployment.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1867. Swaziland formally becomes a British protectorate.

1961. The Union of South Africa breaks relations with Britain and toughens racial segregation policies (known as apartheid). Britain accelerates the decolonization process in the region, and Swaziland is granted internal autonomy.

1868. Swaziland gains independence from Britain. King Sobhuza II is recognized as head of state and governs with 2 legislative chambers.

1972. Swaziland holds its first parliamentary elections; the traditionalist Imbokodvo National Movement wins.

1973. King Sobhuza II declares the constitution un-workable, dissolves parliament, and prohibits political parties and trade unions. The Royal Defence Forces are reactivated.

1977. Elections to Parliament are held under the local council system.

1982. King Sobhuza II dies. The powers of head of state are transferred to Queen Mother Dzeliwe, who is named regent. In a power struggle, traditionalists gain the upper hand.

1983. Prime Minister Prince Mabandla Dlamini, head of the liberal faction, is dismissed and replaced by conservative Prince Bhekimpi Dlamini. The Queen Regent is presented with document transferring most of her power to the Liqoqo, a traditional advisory body. On her refusal to sign, she is ousted in favor of Ntombi, mother of the heir apparent, Prince Makhosetive. Ntombi is installed as Regent, and power rests with the Liqoqo.

1986. Prince Makhosetive is installed as King Mswati III at the age of 18, and the Liqoqo is abolished.

1987. King Mswati III dissolves parliament in September, 1 year early. In November, elections are held and a new cabinet is appointed.

1992. In February the People's United Democratic Movement (PUDEMO) declares itself an opposition party, which is illegal.

1993. More than 50 opposition activists are arrested, including leaders of PUDEMO and the Swaziland Youth Congress (SWAYOCO). The local council system of indirect elections ends, and direct elections are held.

1996. PUDEMO announce plans for a campaign of protests and civil disobedience following the govern-ment's failure to respond to demands for the installation of a multi-party system and for the adoption of a constitution that would restrict the monarch to symbolic role in government.

1997. In mid-October the Swaziland Federation of Trade Unions (SFTU) calls for countrywide strikes in support of demands for democratic reform after talks with the government fail to produce any agreement. Support for strikes is low as a result of the limited success of earlier strikes.

FUTURE TRENDS

The Swaziland economy will for the foreseeable future continue to be heavily reliant on the South African economy as well as regional economic organizations such as the Southern African Customs Union and the Southern African Development Cooperation. Its small size and landlocked location make any changes in economic partnerships difficult to envisage. Even with greater regional integration, the dependence on South Africa will continue as South Africa has the largest manufacturing sector in southern Africa, as well as sophisticated financial expertise, and the ability to provide effective management for its investments in neighboring states.

Nevertheless, to exploit the benefits of regional integration and maintain economic stability, Swaziland is being pressured to speed-up its privatization program, upgrade infrastructure , and improve the regulation of the financial sector. The political maneuverings have to date been seen as having little effect on the economy. However, there is no doubt that Swaziland will receive more aid and international cooperation if the awaited constitutional review recommends a bill of rights, the introduction of a multiparty democratic system, and the reversion of the king to the role of constitutional monarch.

DEPENDENCIES

Swaziland has no territories or colonies.

BIBLIOGRAPHY

Commonwealth Secretariat. "Swaziland." The Commonwealth Yearbook 2000. Birmingham, UK: Stationery Office, 2000.

Economist Intelligence Unit. Country Profile: Swaziland. London: Economist Intelligence Unit, 2001.

Hodd, Michael. "Swaziland." The Economies of Africa. Aldershot: Dartmouth, 1991.

Swaziland. <http://www.magma.ca/~mali/swaziland/main.htm>.Accessed September 2001.

U.S. Central Intelligence Agency. World Factbook 2001. <http://www.odci.gov/cia/publications/factbook/index.html>. Accessed September 2001.

U.S. Department of State. Background Notes: Swaziland, August 2000. <http://www.state.gov/www/background_notes/swazi_0008_bgn.html>. Accessed September 2001.

—Allan C. K. Mukungu

CAPITAL:

Mbabane (administrative and judicial) and Lobamba (royal and parliamentary).

MONETARY UNIT:

The lilangeni (E); the plural is emalangeni. One lilangeni equals 100 cents. There are coins of 1, 2, 5, 10, 20, and 50 cents, and 1 lilangeni, and notes of 2, 5, 10, 20, and 50 emalangeni. The lilangeni is on par with the South African rand, which is also accepted as legal tender in the country.

CHIEF EXPORTS:

Sugar, citrus, canned fruit, soft drink concentrates, textiles, wood pulp, cotton yarn, refrigerators.

CHIEF IMPORTS:

Manufactured goods, machinery, transport equipment, food, chemicals, fuels.

GROSS DOMESTIC PRODUCT:

US$4.44 billion (purchasing power parity, 2000 est.).

BALANCE OF TRADE:

Exports: US$881 million (f.o.b., 2000). Imports: US$928 million (f.o.b., 2000).