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- GDP (PPP):
- $6.8 billion
- 2.8% growth
- 1.4% 5-year compound annual growth
- $6,218 per capita
- Inflation (CPI):
- FDI Inflow:
Swaziland’s economic freedom score is 59.9, making its economy the 91st freest in the 2015 Index. Its score is down by 1.3 points from last year, with improvements in freedom from corruption, fiscal freedom, and monetary freedom offset by deteriorations in five of the 10 economic freedoms, including a 10-point drop in 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’s economy has risen briefly to “moderately free” in recent years only to fall back to “mostly unfree.” Nonetheless, over the past five years, its economic freedom has advanced by 0.8 point, with a 9.0-point increase in the fiscal freedom score offset by declines in three of the 10 economic freedoms, including business freedom and trade freedom.
Swaziland has not fully embraced the principles of economic freedom. Rule of law remains weak and ineffective. A dual judicial system can rule based on either customary laws or European laws. The inefficient business environment discourages formal business formation. Recent success in the apparel industry, however, has been a testament to Swaziland’s slowly opening economy.
King Mswati III rules Africa’s last monarchy. September 2013 parliamentary elections were disputed because candidates were handpicked by the king. Banned political parties have called for greater democracy and limits on the king’s power. In June 2014, as a result of crackdowns on peaceful demonstrations and lack of protection of workers’ rights, the U.S. disqualified Swaziland from receiving the market-access benefits available under the African Growth and Opportunity Act. Swaziland’s currency is pegged to the South African rand, and South Africa is its largest trading partner. The soft-drink concentrate, textile, and cane sugar industries are the leading export earners and largest private-sector manufacturers. Coal and diamonds are also exported. Fiscal profligacy and the high HIV/AIDS rate undermine development.
Government corruption was widely blamed for contributing to Swaziland’s financial crisis. 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.
Swaziland’s top individual income tax rate is 33 percent, and its top corporate rate is down to 27.5 percent. Other taxes include a fuel and sales tax. Overall tax revenue amounts to 22.7 percent of domestic income, and government expenditures are equivalent to 32.4 percent of domestic output. Government debt equals 19 percent of gross domestic product.
Many regulatory requirements increase the overall cost of entrepreneurial activity. It still takes about a month to establish a business. Labor regulations are not enforced effectively, and there is no efficient countrywide labor market. A large share of the workforce is employed in the informal sector. The state continues to influence prices through numerous state-owned enterprises and utilities.
The average tariff rate is 7.0 percent. Informal barriers further impede trade. Foreign investment is allowed in most sectors of the economy. The underdeveloped financial system is closely linked to South Africa. Three commercial banks owned by South African institutions account for over 80 percent of total assets. The capital market is nascent, and the stock market is largely inactive.