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. Real GDP growth experienced a strong rebound of 7.9% in 2021; however, in 2022, growth came to a standstill (at 0.4%) due to the lingering impact of civil unrest, delayed government payments, sluggish growth in South Africa, and unfavourable weather conditions and strikes in the sugar industry. The outlook for the near future appears positive: according to the IMF, real GDP growth is expected to increase to 3.2% this year and 2.1% in 2024, driven by agricultural output and manufacturing, as well as increased government capital expenditure.
Similarly to Lesotho, Eswatini faces significant volatility in its fiscal revenues, owing to highly unstable Southern African Customs Union receipts (the government depends on custom duties from SACU to finance almost half of its budget). Due to decreased SACU earnings and increased government expenditures, the fiscal deficit of the government expanded to an estimated 5.4% of GDP by the end of the fiscal year 2022-23. Additionally, the current account balance has shifted to an anticipated deficit of roughly 1.1% of GDP in the balance of payments, primarily due to elevated import costs having a negative effect on the trade balance. As a result, foreign reserves have decreased to USD 449 million, which corresponds to roughly 2.3 months of import coverage. SACU revenue transfers are expected to roughly double in FY23-24, facilitating a significant reduction in the fiscal deficit and a modest reduction in the ratio of public debt to GDP, which stood at 45.8% in 2022 and should decrease to 44.1% in 2023 and 41.3% in 2024 (IMF). The government is working to establish a SACU revenue stabilization fund, which may represent a substantial advancement in the administration of fluctuations in SACU revenue transfers and the improvement of macroeconomic governance. Meanwhile, headline inflation rose to 5.6% at end-2022 due to higher food and transport prices, and is expected to stabilize at around 5% over the forecast horizon (IMF). Other government priorities include the implementation of a fiscal consolidation plan, as well as boosting 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 promote industrialisation across the country. Nevertheless, the presence of potential risks remains, including unpredictable shifts in international commodity prices, more stringent global financial conditions, climate vulnerability (drought), lack of technological readiness, and a deceleration in South African economic expansion.
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 24.6% of the population in 2021 (World Bank modelled ILO estimate). Youth unemployment is extremely high, at an estimated 50%. The country’s GDP per capita (PPP) stood at USD 11,054 in 2022 (IMF). 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 (E) | 2023 (E) | 2024 (E) |
|---|---|---|---|---|---|
| GDP (billions USD) | 3.98 | 4.74 | 4.46 | 4.82 | 5.11 |
| GDP (Constant Prices, Annual % Change) | -1.6 | 7.9 | 0.5 | 2.8 | 2.5 |
| GDP per Capita (USD) | 3,535 | 4,165 | 3,876 | 4,147 | 4,345 |
| General Government Gross Debt (in % of GDP) | 41.2 | 41.5 | 45.4 | 39.3 | 37.2 |
| Inflation Rate (%) | 3.9 | 3.7 | 4.8 | 5.4 | 4.8 |
| Current Account (billions USD) | 0.28 | 0.13 | -0.07 | 0.17 | 0.18 |
| Current Account (in % of GDP) | 7.1 | 2.7 | -1.7 | 3.4 | 3.5 |
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
See the country risk analysis provided by Coface.
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: September 2023
