Common Country Assessment - Swaziland, 1997

Contents | Introduction | Poverty Reduction and Sustainable Livelihoods | Advancement/Empowerment of Women | Child Rights/Child Development/Child Protection | Education | Population | Environment | Health | STD/HIV/AIDS | Food Security/Nutrition | Governance and Participation | Institution Building | Summary and Conclusion

Chapter One - Introduction

1.1 PHYSICAL

Swaziland is a small country - at 17,364 sq. km. it is the smallest in the southern hemisphere, and the second smallest in Africa after Gambia. Yet despite its small size, it has a variety of geographic features, climate zones and biodiversity not possessed by many far larger countries. Within a variation in altitude above mean sea level of between 100 and 1800 metres, it has six distinct physiographic regions - the highveld, upper middleveld, lower middleveld, western lowveld, eastern lowveld, and Lebombo range - with the average rainfall increasing with the altitude.¹ At a latitude of between 25 and 27 degrees south (its longitude is 31-32 degrees east) it is in a generally and sub-tropical region, with drought as a regular feature of the climate pattern for all regions but the highveld. Three-quarters of Swaziland's rainfall falls between September and March.

1.2 HISTORICAL BACKGROUND

In the early part of the nineteenth century, the Swazis expanded and consolidated their hold over what is now Swaziland and adjoining areas, and during the mid-century period that hold came under threat from external forces. In the latter part of the century, Swaziland’s current boundaries were drawn up, and almost all land use rights were alienated to Europeans in the form of concessions. Shortly after Swaziland became a British Protectorate after the Anglo-Boer war (1899-1902), the British permitted the conversion of many of the concessions into freehold. The Swazis then set about returning much of the land to customary tenure, with such success that now almost three-quarters of the land is held in that form - by the Ngwenyama (King) in Trust for the Swazi Nation.

Before the Second World War, Swaziland’s economy was generally around subsistence levels, based upon maize with some livestock. There had also been some exploitation of mineral resources - notably gold and tin. The opening of the Havelock asbestos mine in 1939 was a landmark for the entry of Swaziland into the world economy: up until the 1960s, the mine regularly contributed around eighty percent of export earnings. Iron ore also figured prominently from the early 1960s to the mid 1970s. However, the groundwork for Swaziland's current economy was not laid so much with mining as with the establishment of cash crops - predominantly sugar and forestry - in the 1950s and 1960s. While mining has faded from its previous dominance, forestry and in particular sugar, citrus and their related manufacturing industries are now the backbone of the economy.

King Sobhuza led his country into internal self-government in 1967. Full independence was achieved in 1968, the same year as the current King, Mswati III, was born.

Swaziland then embarked upon an era of generally sustained progress - reflected in many indicators, particularly those relating to the health, wealth and education of the population. To give one example from each category:

• Health - in 1966, the under five mortality rate was 232 per 1,000 live births, falling to 167 by 1990 and an estimated 107 by 1995;
• Wealth - the Real GDP at constant 1985 prices was about E273 million in 1968 and an estimated E1489 million in 1995 - an increase of 545 percent, compared with a population growth of about 230 percent over the same period;
• Education - from a literacy rate of about 44 percent in 1966 to an estimated 80 percent in 1995.

1.3 GENERAL

In human development terms, Swaziland has enjoyed one of the best results of post-colonial Africa (at 114^th out of the 175 countries surveyed, Swaziland has the third highest position on the Human Development Index (HDI) in sub-Saharan Africa). While such achievements are highly commendable, there is still much remaining to be done. Almost two-thirds of the population are below the poverty datum line for basic goods and services (of approximately US $180 per person per annum), and almost half are below the minimum required for the food component (of approximately US $120 per person per annum). About two-thirds of the rural population lack adequate sanitation, and over half lack access to potable water. This challenge is set against the recent economic background of a slowing in the growth of GDP to only 2.5 percent per annum between 1991 and 1995 - a rate of growth below the estimated rate of population growth of 2.7% 1986-97.

There are far greater challenges to be faced with large populations than without them. The social, economic and environmental challenges are not only technological, but are even more fundamentally managerial. In Swaziland, the current population is unsustainable without significant managerial improvements. The management systems on SNL have adapted little from those of the nineteenth century, when the challenges were both fewer and simpler. Internationally, there are instances where population increases have not lead to social, environmental and economic degradation - sometimes even the opposite - but in all such cases management has been upgraded to meet the increased challenges which occur of necessity with increased populations.

The following chart visually depicts the quantitative core of the problem: the same 17,364 sq. km., containing all the natural resources, has to service the needs of greatly increasing numbers - approximately 85,000 in 1904, 200,000 in 1950, 400,000 in 1968, an provisional figure of 913,000 in 1997 and a projection based upon a fast fertility decline of possibly 1.336 million by 2016 - a ten-fold increase in 90 years, and a possible increase of over fifteen-fold in 112 years.

Source: CSO.

A still-emerging factor which will inevitably affect both sides of this ‘economic growth vs. population growth’ equation is that of HIV/Aids. The experience elsewhere in Africa is that the disease hits the professional and skilled people hardest in the short term, and the poor and marginalised in the long run. As Swaziland has an acute shortage of high quality human capital, the economic impact of Aids could be severe - even more than on the population growth side. As already demonstrated in countries to the north where the pandemic is more advanced, HIV/Aids is a dark cloud with no silver lining.

1.4 SOCIAL

Swaziland is notable for its strong adherence to traditions. One such tradition is polygamy, which is still practised in Swaziland under customary law. The number of wives permissible is limited only by practical considerations, such as the ability to support, and to pay the bride price. Under civil law, however, only one wife is allowed, and she can be married either inside or outside of community of property. In effect, a woman is generally treated as a minor in both civil law and tradition, which will require change under Swaziland's proposed ratification of CEDAW. The TFR of Swazi women remains amongst the highest in the world, but has been declining steadily- 6.9 births per lifetime in 1976, 6.6 in 1986⁸ and an estimated 5.6 in 1996 ⁹ - which if true (which is likely, but other sources indicate 6.1. 6.4 and 6.5) would still be a rate more typical of a low human development (HD) nation than one in the medium HD category.

On the other hand, the high value placed upon education is reflected in its combined first, second and third level gross enrolment ratio in education being higher than all but one of the countries beneath it on the HDI and better than many countries above it - the fourth highest ratio on mainland Africa (behind Libya, South Africa and Namibia). English - a requirement to graduate to secondary school and a passport into ‘the global village’ - is very widely spoken, and the country has a primary enrolment ratios comparable to the ‘Asian Tigers’ - and those ratios are often given as one of the main reasons for the Asian Tigers’ successes. However, although the gross primary enrolment ratio is 100 percent and the net ratio 82 percent, the quality of the education has been called into question - particularly the aspect of arming children of school-going age with the skills needed to survive in the emerging "Age of Information", with its smart machines and capital-intensive nature. There is often a mismatch between education - even tertiary education - and economic requirements, both those current and those predicted for the long term. Yet the long-term future of the country is increasingly, if not entirely, dependent upon both the quantity and especially the quality of its education.

The population pressures have also resulted in an average number of people per household of 5.33, although that statistic and that of female heads of households being at 30 percent¹² should only be regarded as generally indicative (they can be clouded due to the practice of polygamy and the absence of many fathers employed away from home or for other reasons; for example, other sources say 39-40 percent of households have female heads, but on SNL, said to have the highest ratio of female heads of households, a 1995-96 survey put the figure at 18 percent¹³). However, even with that qualification, the indicative range of the female heads of households statistic reveals a serious poverty issue. Provision of health facilities, consuming an average of 8 percent of the government's budget, has been successful by some measures but not all, and again is caught between the growing population and the decline in government revenue.

A fundamental factor for both the continuation of tradition and economic empowerment (to pay for education, for example) is access to land. In this regard Swaziland has been blessed by the efforts of its forefathers in getting so much of the land returned to them that was alienated in the nineteenth century. It has been estimated that, largely due to customary tenure, only six percent of eligible Swazis do not have access to land - close to saturation level, given that a similar proportion of the population may be in transit, or not require land for other reasons.

Having access to land is one thing; what you can do with it is quite another. In this regard the Swazis are not as fortunate. Increasing population pressures and serious erosion mean that more SNL allocations are on marginal lands, exacerbating environmental pressures and limiting the land's usefulness for its intended purpose.

If it can be found at all, gaining finance for development on SNL is difficult and expensive, as the land cannot be secured as collateral for a lower-interest loan. The government is currently investigating the feasibility of introducing leasehold on SNL to address this problem. Many attempts have been made to improve production and availability of finance on SNL, but their successes thus far have been limited at best. The majority of income, and the great majority of food, has to be produced off SNL. Almost the only people making a living off SNL are some of those grazing cattle upon it (for an estimated return of around 22-25 percent per annum), and half the rangelands on SNL are now either seriously or very seriously eroded. Off SNL, the real property market is not functioning for the benefit of the majority (there are only about 20,000 surveyed parcels in the country), so despite general land access, land with the right location for a prosperous future is scarce. The government's urban development project - a sites and services scheme - is granting 99-year leases to provide security of tenure to low-income urban dwellers.

1.5 ECONOMIC INDICATORS

The most striking current aspect of the economy is the dramatic turn for the worse in the growth of GDP from the halcyon days of up to almost 15 percent growth in the 1980s. In the seven year period 1984-90, the GDP grew by an annual average of over 8 percent. The main reason for the increase in foreign direct investment which fuelled this growth was the imposition of sanctions against South Africa; the manufacturing sector established itself more strongly as a result, with strong multiplier effects and a boom period for the construction industry. The high prices obtained for sugar and other exports also helped.

The recent and projected figures are as follows:

Source: MEPD. Development Plan 1997/98-1999/00 pp.10 & 75

Amongst other things droughts have taken their toll (directly or indirectly, water accounts for about 29 percent of the GDP), and so has the dramatic reduction in FDI since the lifting of sanctions against South Africa and the opening up of eastern Europe. Unemployment has been growing at about 10 percent per annum, compared with a growth in formal employment of only 3.6 percent. The slow-down in the economy has not been matched by an equivalent slow-down in fiscal expenditure. As a result of there being less economic activity to tax, increasingly large government deficits are being faced every year (last year’s deficit was E98.8 million; currently, it is E148.4 million). SACU receipts currently provide over half the government's revenue: as SACU renegotiations are under way, the sustainability of this revenue base is questionable.¹⁴ Projections indicate that there will be major fiscal deficits without radical changes in the short term - well above the current deficit levels. With public servants accounting for almost one third of all paid employment, any attempts to ease the burden by cutbacks in the public service could have major social consequences.

The government is attempting to address these problems under the umbrellas of an Economic and Social Reform Agenda for the short term, and a National Development Strategy for the long term. ESRA contains a broad range of urgent initiatives - for example, an investment bill to facilitate FDI is currently before cabinet, and several tax reform issues are also being addressed. These initiatives are being carried out against a background of increasing civil unrest and a decline in openness and goodwill. This is resulting in retreats to fundamentally opposed positions and therefore inaction, at a time when cooperative action is urgently required.

Worldwide, political unrest is considered the single factor most likely to discourage FDI. As ESRA correctly recognises that the private sector is the engine that can drive economic recovery, economic recovery through FDI could be stalled significantly by unrest. Currently, employment in the private sector is in decline - down from 65,000 in 1993 to under 63,000 (est) in 1996 (in 1970, with 43 percent of the 1996 population, there were 33,000 in private sector employment - about 52 percent of the 1996 figure)[West, p. 131]. Including informal employment, there are approximately 106,000 jobs in Swaziland compared to the over 15 aged population of approximately half a million. The 15-19 age group have the extraordinary unemployment rate of about 49 percent.¹⁷

Sources: Central Bank and CSO

The government hopes that the long-term stability of Swaziland plus the openness and receptivity of the Investment Bill will carry more weight with FDI than the recent unrest. However, with or without the assistance of FDI, economic recovery must proceed to at least a rate of parity with the growth of the population to avoid a snowballing of many of the current problems. Sustainable utilisation of all resources is therefore an urgent priority. In this respect, the land resource can be better utilised.

In 1961-63, agriculture provided 39.9 percent of GDP; in 1971-73, 31.9 percent, and in 1981-83, 29.4 percent. While over recent years agriculture has only been accounting for around 10-12 percent of GDP, it is fundamental to much of the manufacturing industry (which accounts for about 40 percent), and also impacts strongly on the services sector (which accounts for the remainder). The combined share of the GDP of agriculture and agro-based processing industries was 54 percent in 1991. Moreover, when examining this agricultural base of Swaziland's economy, one sees a stark difference in production based on land tenure.

While SNL provides most of the nation's maize supplies and is fundamental in social and cultural terms, its economic production is low. Its main products are maize and cattle, with some other products such as cotton, tobacco, and winter vegetables on the small (1,250 ha) area of irrigated land. SNL under traditional administration covers about 56 percent of the country, although 74 percent of the country is SNL (the balance under long-term leasehold, or held by MOAC, Tibiyo, or the SNTC). The area under traditional administration is predominantly rainfed, and mainly worked by women, old men and children. There are about 66,000-71,000 homesteads on SNL¹⁸: figures from the agricultural survey indicate that over 44,000 of those have less than one hectare, plus the opportunity of rangelands grazing in the dry season (although only forty percent of households own cattle). The prospects of escaping poverty by rainfed development of an area of less than one hectare appear dubious at best. According to the same source, only 8,252 holdings are over two hectares.¹⁹

Furthermore, areas under production have been in decline. While drought has been the major factor, there was an average annual decline of crop production on SNL of 7.7 percent between 1989/90 and 1994/95, representing an average share of GDP of 3.1 percent (4.4 percent in 1989/90, 2.4 percent in 1994/95).²⁰ Less than half the income of the average homestead comes from the average homestead's agricultural production, although it accounts for over 70 percent of the income of poor households. Tractors are scarce and expensive (there are about 3,000 tractors serving SNL²²) and oxen are often in poor condition for ploughing when they are most needed, at the end of the dry season. This can cause planting delays - particularly damaging in an El Niño year such as this one.

In contrast, TDL farms are highly mechanised, with yields two to three times greater than on SNL and with over four times greater input costs per hectare. Most of the foreign exchange earnings come from TDL, with the main enterprises being sugar, citrus, cotton, pineapples, cotton, maize and cattle ranching. 97 percent of the irrigated land is on TDL (inclusive of SNL with long-term leases to large companies).

In general therefore, while TDL’s development is close to its fulfilling its highest and best economic potential, much of SNL is not. This is being seen as an area for potential improvement to the economic situation, with the added advantage of providing grass roots economic empowerment. However, any such improvement will require significant changes in administration, as a great many past attempts have been failures. For example, there is currently no means of raising funds in rural areas for the functions carried out in urban areas by councils - development of roads etc. - and with a yawning fiscal deficit looming, the government’s financial capacity to respond is becoming progressively more restricted.

The National Land Policy, currently being drafted under ESRA, is to address some of these issues, together with other initiatives under ESRA and the NDS. As mentioned in section 1.2 above, delivery of water to SNL households and their fields is considered fundamental. Improvements to economic productivity are essential to avoid mounting long-term crises, but cannot be expected to contribute significantly a solution to Swaziland’s economic problems in the short term.

Finally, it should be borne in mind that as with all nations, particularly noticeable in those with reasonably open economies such as Swaziland, external factors can play a determining role in that nation’s success or failure. The many macro elements that could affect the economy negatively or positively, affecting the validity of merely projecting current trends, include:

• The removal of distortions to international free trade under the World Trade Organisation
• The future of agreements such as SACU, the Lome convention, the CSP, SADC, and PTA/COMESA
• The heavy dependence on commodities facing potential oversupply internationally (sugar in particular)
• The fierce competition for FDI and foreign aid
• The ballooning imbalances in trade
• Reactive and myopic management and the consequent flight or underutilisation of capital and skilled human resources
• The danger of declining remittances from migrant workers, and
• The increasing irrelevance of all international economies that are not knowledge-based in international trade.

With respect to these factors, it is worthy of note that the price being paid for Swaziland's sugar under international agreements is from 1½ to 3 times the market price: sugar revenues provide 7 percent of GDP, 65 percent of agriculture’s contribution to GDP, and sugar products provide the majority of Swaziland’s GDP.²³

Another important factor is the currency exchange rate, which over the last few years has shown a significant decline against the United States’ Dollar. This makes imports dearer and exports cheaper, and therefore has significant effects upon the balance of trade. (Swaziland’s economy is strongly export-oriented, with exports usually amounting to about 70 percent of GDP²⁴). As part of the Common Monetary Area, Swaziland's Lilangeni is tied to the South African Rand, which has many practical advantages with the high degree of regional economic integration which outweigh the disadvantage of removing the possibility of Central Bank intervention in exchange rates.

1. West, G. 1996. An Assessment of Economic Performance 1968-1995 and Economic Prospects 1995-2000. (Draft). MEPD. Mbabane. p.148
2. Remmelzwaal, A. 1993. Physiographical Map of Swaziland. MOAC. Mbabane.
3. West, 1996, p.6.
4. MEPD.1997. Swaziland: Poverty Assessment by the Poor. (Draft). MEPD. Mbabane. p.14.
5. Whiteside, A. & Wood, G. 1993. Socio-Economic Impact of HIV/AIDS in Swaziland. (Draft). MEPD. Mbabane. p.92.
6. West, p.196.
7. Whiteside & Wood, p.91.
8. West, p. 137.
9. WHO. 1996. The Kingdom of Swaziland: A National Health Profile. (Draft). Mbabane. p.9.
10. GOS. 1997(1). The Economic and Social Reform Agenda. Mbabane. pp. 7-8.
11. CSO. 1997. Education Statistics 1996. Mbabane.
12. CSO. 1995. Swaziland Household Income and Expenditure Survey. MEPD. Mbabane. p.13.
13. CSO. 1996. Swaziland Annual Agriculture Survey 1995-1996. Mbabane.
14. MHUD. 1995. Swaziland National Physical Development Plan. Mbabane. p.2-6.
15. Ernst & Young's 1995 Survey of 230 of the 1,000 largest global companies. 89% regarded political instability as a major barrier to investment, and 85% financial risk.
16. Central Bank of Swaziland 1996-97 Annual Report.
17. CSO. 1995. p.1.
18. MEPD, 1997. Also see SHIES, 1995, and the CSO's 1996 Agricultural Survey, p.136.
19. CSO, 1996, p.136
20. MEPD, 1996. Development Plan 1996/97-1998/99. Mbabane. p.11.
21. CSO.1995. Annual Statistical Bulletin. p.30.
22. MHUD, 1995, pp. 7-5 to 7-7.
23. MNRE/Knight Piésold. 1997. Water Sector Situation Report p. A1-17
24. Ibid, p. A1-1.

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