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- GDP (PPP):
- $6.2 billion
- -1.5% growth
- 1.0% 5-year compound annual growth
- $5,782 per capita
- Inflation (CPI):
- FDI Inflow:
Swaziland’s economic freedom score is 61.2, making its economy the 82nd freest in the 2014 Index. Its score has improved by 4.0 points since last year, primarily due to improvements in the control of government spending, trade freedom, and investment freedom. Swaziland is ranked 8th out of 46 countries in the Sub-Saharan Africa region, and its overall score is just above the world average.
Swaziland was first rated in the 1996 Index, and its economic freedom score has dropped since then by 2.1 points. Improvements in five of the 10 economic freedoms, including double-digit increases in trade freedom and fiscal freedom, have been more than offset by significant declines, including declines of 10 points or more in freedom from corruption, property rights, and financial freedom.
Swaziland had been on a generally downward path of economic freedom since 1995. In 2014, however, it has achieved its highest economic freedom score in eight years and is again rated “moderately free.” Deeper institutional reforms are critical to ensuring sustainable economic development and greater poverty reduction.
King Mswati III rules Africa’s last monarchy under a constitution that includes some democratic elements and protections for human rights. September 2013 parliamentary elections were criticized because political parties were not allowed to participate. Swaziland is part of the Southern African Customs Union and the Common Monetary Area. Its currency is pegged to the South African rand, and South Africa is its largest trading partner. Subsistence agriculture employs 70 percent of the workforce. The soft-drink concentrate, textile, and cane sugar industries are the leading export earners and the largest private-sector manufacturers. Coal and diamonds are also exported. Swaziland qualified for the African Growth and Opportunity Act’s apparel provision in 2001, and 30,000 new jobs in its apparel industry have since been created. Swaziland has one of the world’s highest HIV/AIDS rates.
Corruption is a major problem, and government corruption was widely blamed for contributing to Swaziland’s current economic problems. The dual judicial system includes courts based on Roman–Dutch law and traditional courts using customary law. The judiciary is independent in most civil cases, though the king has ultimate judicial powers, and the royal family and government often refuse to respect rulings with which they disagree.
The top individual income tax rate is 33 percent, and the top corporate tax rate is 30 percent. Other taxes include a fuel tax and a sales tax. Overall tax revenue amounts to about 23.3 percent of the domestic economy. Government expenditures amount to 31 percent of the economy. Public debt has risen to almost 20 percent of GDP. Windfall revenues from the South African Customs Union have failed to shore up public finances.
It takes 12 procedures and more than a month to launch a business, and completing licensing requirements costs more than the level of average annual income. A formal labor market has not been fully developed, and informal labor activity remains substantial. The state continues to influence prices through numerous state-owned enterprises and utilities.
Swaziland has an average tariff rate of 4.2 percent. Foreign investment is allowed in most sectors of the economy, with ownership levels of up to 100 percent. The financial sector remains underdeveloped, and most of the population still lacks access to formal credit. Overall supervision of the banking sector is weak, and the sector remains subject to government influence. Capital markets are small.