Eswatini: Economic Outline
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In April 2018, 50 years after independence from British rule, King Mswati III changed the country’s name from Swaziland to the Kingdom of Eswatini, its pre-colonial original name. As a landlocked territory surrounded by South Africa and Mozambique, Eswatini’s economy relies largely on South Africa and on the volatile and declining Southern Africa Customs Union (SACU) revenue. The country's economic growth was already slowing when it entered recession in 2020 due to the outbreak of the Covid-19 pandemic. After contracting by -2.4% in 2020, economic growth recovered modestly to 1.5% in 2021, and is expected to slightly increase to 1.7% in 2022 and 1.8% in 2023 (IMF). In the medium term, growth is expected to be limited by accelerated fiscal consolidation and a decline in projected SACU receipts (AfDB).
Similarly to Lesotho, Eswatini faces significant volatility in its fiscal revenues, owing to highly unstable SACU receipts. The government depends on custom duties from SACU to finance almost half of its budget. The economy faces ongoing fiscal challenges, exacerbated by a weak external position. SACU's expansionary fiscal policies and low revenues have widened the budget deficit. In 2020, existing challenges were magnified by the effects of the pandemic as crisis-related expenditures increased and revenues declined. Fiscal deficit reached an estimated 8.6% GDP in 2020, prompting the government to request international financial support (AfDB). The IMF approved USD 110.4 million in emergency financial assistance under the Rapid Financing Instrument. The deficit for financial year 2021/22 was budgeted at 6.5% GDP, and was projected at 4.8% GDP in 2022/23. The government aims at a 1% GDP fiscal deficit in 2023/24 (Eswatini government). Driven by the fiscal deficit, Eswatini's public debt widened from an estimated 41.2% GDP in 2020 to 46% GDP in 2021, and is expected to further increase to 50.9% GDP in 2022 and 52.5% GDP in 2023 (IMF), remaining below the SADC threshold of 60% GDP. Due to supply chain constraints, elevated food prices and a weakening domestic currency (AfDB), inflation increased from 3.9% in 2020 to 4.3% in 2021 (IMF). It is expected to rise to 4.7% in 2022 and 4.6% in 2023 (IMF) due to increased commodity prices (especially oil). In addition to supporting economic and social recovery, the priorities are to implement a fiscal consolidation plan, as well as to implement the country's development plan (2019-2022), prioritising infrastructure, agriculture production, and economic diversification while reducing poverty. Eswatini is seeking a comprehensive industrial policy to support diversification, develop local entrepreneurs (the government has implemented initiatives to develop and promote indigenous entrepreneurship, particularly in small and medium enterprises), and to promote industrialisation across the country. Challenges include climate vulnerability (drought), lack of technological readiness and dependence on neighbouring South Africa.
Popular discontent over poor economic conditions has been increasing. Poverty levels stagnated at high levels in the last five years. A total of 60% of the population is poor overall and children, the elderly, the unemployed as well as female-headed and single-headed households are the most affected (World Bank). Income inequality is high and unemployment concerned 25.5% of the population in 2020 (World Bank modeled ILO estimate). Youth unemployment is extremely high, at an estimated 47% (AfDB). Over one quarter of Eswatini's population is infected with HIV/AIDS, the highest prevalence rate in the world (CIA).
| Main Indicators | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| GDP (billions USD) | 3.98 | 4.74 | 4.67 | 4.87 | 5.15 |
| GDP (Constant Prices, Annual % Change) | -1.6 | 7.9 | 2.4 | 1.8 | 2.1 |
| GDP per Capita (USD) | 3,535 | 4,165 | 4,056 | 4,189 | 4,382 |
| General Government Gross Debt (in % of GDP) | 41.4 | 45.0 | 45.8 | 44.1 | 41.3 |
| Inflation Rate (%) | 3.9 | 3.7 | 4.9 | 4.2 | 4.4 |
| Current Account (billions USD) | 0.27 | 0.12 | -0.04 | 0.00 | 0.04 |
| Current Account (in % of GDP) | 6.7 | 2.5 | -0.8 | 0.1 | 0.9 |
Source: IMF – World Economic Outlook Database - October 2021.
Note: (e) Estimated Data
| Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|
| Swaziland Lilangeni (SZL) - Average Annual Exchange Rate For 1 GBP | 19.86 | 17.16 | 17.67 | 18.38 | 21.13 |
Source: World Bank - Latest available data.
Agriculture accounted for 6.5% of GDP in 2017. Products included sugarcane, corn, cotton, citrus, pineapples, cattle, and goats.
Industry accounted for 45% of GDP in 2017 and included soft drink concentrates, coal, forestry, sugar processing, textiles, and apparel.
Services accounted for the remaining 48.6% of GDP in 2017.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
|---|---|---|---|
| Employment By Sector (in % of Total Employment) | 12.1 | 23.4 | 64.5 |
| Value Added (in % of GDP) | 8.1 | 32.3 | 54.0 |
| Value Added (Annual % Change) | 2.5 | 15.4 | 4.1 |
Source: World Bank - Latest available data.
| 2018 | 2019 | 2020 | |
|---|---|---|---|
| Labour Force | 367,358 | 374,305 | 369,124 |
Source: International Labour Organization, ILOSTAT database
| 2017 | 2018 | 2019 | |
|---|---|---|---|
| Total activity rate | 54.20% | 54.50% | 54.71% |
| Men activity rate | 57.97% | 58.14% | 58.22% |
| Women activity rate | 50.66% | 51.03% | 51.34% |
Source: International Labour Organization, ILOSTAT database
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
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The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
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Latest Update: February 2023
