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- GDP (PPP):
- $11.1 billion
- 1.7% growth
- 2.5% 5-year compound annual growth
- $9,776 per capita
- Inflation (CPI):
- FDI Inflow:
Swaziland’s economic freedom score is 55.9, making its economy the 123rd freest in the 2018 Index. Its overall score has decreased by 5.2 points, with a plummeting score for the fiscal health indicator overwhelming improvements in labor freedom and business freedom. Swaziland is ranked 20th among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.
Amid ongoing social unrest and public discontent with Swaziland’s elites because of their mismanagement of public finances, abysmal labor conditions, and resistance to demands for democratic reform, the government faces the uphill task of attracting new investment and implementing its ambitious agenda of structural reforms to improve infrastructure, boost agricultural productivity, and increase economic diversification. Bureaucratic inefficiency and corruption affect many aspects of the economy. Judicial enforcement of contracts and property rights is vulnerable to political interference.
Swaziland gained independence from the U.K. in 1968. King Mswati III is Africa’s last absolute monarch. Political parties are banned, and rights groups accuse the government of imprisoning journalists and pro-democracy activists. Chiefs loyal to the king pick parliamentary candidates, and international observers declared the most recent elections, held in 2013, not credible. Swaziland depends on South Africa for 60 percent of its exports and more than 90 percent of its imports. Subsistence agriculture employs approximately 70 percent of the population, and unemployment tops 25 percent. Manufacturing diversified in the 1980s and 1990s but has grown little in the past decade. Swaziland has the world’s highest HIV/AIDS rate but has cut the rate of new infections by half since 2011.
The government recognizes and enforces secured interests in titled property, but 60 percent of land in Swaziland lacks clear title. The constitution provides for an independent judiciary, but the king’s power to appoint judges undercuts judicial independence. Corruption is a major problem, especially in procurement, government appointments, and school admissions.
The top individual income tax rate is 33 percent, and the top corporate tax rate is 27.5 percent. Other taxes include fuel and sales taxes. The overall tax burden equals 26.0 percent of total domestic income. Over the past three years, government spending has amounted to 34.1 percent of total output (GDP), and budget deficits have averaged 6.1 percent of GDP. Public debt is equivalent to 27.5 percent of GDP.
Significant government bureaucracy and other high costs associated with doing business in Swaziland are not conducive to entrepreneurial activity. Subsistence agriculture employs approximately 70 percent of the population. Swaziland has a poor labor rights record. In an effort to reduce the cost of subsidies, the Swaziland Energy Regulatory Authority approved a 15 percent increase in the electricity tariff in 2017.
Trade is significant for Swaziland’s economy; the combined value of exports and imports equals 97 percent of GDP. The average applied tariff rate is 5.2 percent. Nontariff barriers impede some trade. Government openness to foreign investment is below average. The financial sector remains underdeveloped, and most of the population still lacks access to formal credit.