COUNTRY PROFILE KINGDOM OF SWAZILAND

							COUNTRY PROFILE:                  KINGDOM OF SWAZILAND                                                                                   IES/02: ATTACHMENT A
DATED:                            FEBRUARY 2008
CREDIT GUARANTEE:
                                Country               U/W
                                Rating               Method


          Short-term               3C             No Restrictions
 Recent Political Highlights
  Chief of state is King Mswati III. Head of government since November 2003 is Prime Minister Absolom Themba Dlamini. Elections for the members of the House of
     Assembly are scheduled for October this year. Balloting is done on a non-party basis and candidates for election are nominated by the local council of each constituency.
  Opposition groups in Swaziland have agreed to boycott parliamentary polls later this year, undertaking instead to push harder for multi party elections. A dozen political
     parties, civic organisations and student groupings met in Manzini, endorsing the formation of a united front within two months to challenge the status qou in the tiny
     kingdom. Political parties were banned in 1973 but the constitution, which was rewritten in 2006, allows for freedom of association. However people can only stand for
     elections as individuals. The parliament consists of 85 members, more than a third of whom are handpicked by the king who also makes all government appointments. The
     meeting was initially divided about whether to boycott a system of government or to propose an unofficial slate of election candidates to try to change the system from
     within.
 Recent Economic Highlights
  Swaziland’s population is estimated at 1.1 million and declining by 0.34% annually. About 68% of the population lives in poverty while 38.8% is living with HIV/AIDS.
  Swaziland’s ability to cope with its ongoing humanitarian crisis will not improve until its under-performing economy picks up, social welfare activists and the government
     agree. Drought, wild fires, orphans and vulnerable children, drug shortages and poverty are slowing down growth, which remains the lowest among SACU countries.
     Economic growth averaged just 2% over the past five years. Although growth was about 2.8% last year, the Central bank of Swaziland noted that the performance still
     represented an overall decline in the quality of life for the average Swazi. Unemployment is estimated at 30%.
  Swaziland’s increasing vulnerability to a seemingly endless string of manmade and natural disasters has prompted a new approach to improving the speed and effectiveness
     of the response. After a devastating drought hit all four of the country’s regions last year, withering up to 80% of crops in some areas, 2008 started with extremely heavy
     rains, hailstorms and wildfires. The Disaster Risk Reduction (DRR) has now become a priority for Swaziland.
  Some relief agencies and agricultural officials are dismayed that 2007’s devastating crop failures did not spark reform in the way land is utilised. Despite the heavy rains that
     have been received this year, the effects of the 2007 drought still linger. 40% of the population is dependent on some form of food assistance to survive. Leaders are also
     decrying some farmers’ apathy to grow crops because they know they will be fed by the World Food Programme.
  Swaziland’s sugar cane farmers were handed €15m by the European Commission in January this year in a measure to cushion them from the impact of a cut in industry
     prices. This amount is expected to enhance the profitability of smallholder sugarcane growers and to contribute to maintain the efficiency of Swaziland’s sugar production.
     Some 700 sugar industry workers have been laid off in recent months with producers forced to cut costs as a result of the lower prices from Europe. Swaziland’s yearly
     quota to EU markets stands at 120,000 metric tonnes.
  Foreign direct investors are preferring regional economies (South Africa and Mozambique) to the small kingdom that has few natural resources. The Prime Minister
     acknowledges foreign investors’ lacklustre interest in Swaziland and said the government priority would be to encourage Swazis to start small and medium sized businesses.
     An economist has accused the government of setting goals without telling how these will be achieved resulting in no implementations.
Latest Trade Developments
  Main exports: soft drink concentrates, sugar, wood pulp, cotton yarn, refrigerators, citrus and canned fruit.
  Main imports: motor vehicles, machinery, transport equipment, foodstuffs, petroleum products and chemicals.
  Major trade partners: South Africa, EU, US, Mozambique, Japan and Singapore. Swaziland is heavily dependent on South Africa from which it receives more than 90% of
     its imports and to which it sends 60% of its exports.
  Swaziland is to open talks about the possibility of importing power from Mozambique after its traditional supplier South Africa froze exports. This follows reports that
     Eskom will reduce the amount of energy given to neighbouring countries; landlocked Swaziland gets about 80% of its energy from South Africa.
                                                                                                                                           Sindiso Valerie Mpofu-Economic Researcher