Embed This Data
- GDP (PPP):
- $8.6 billion
- 1.7% growth
- 1.5% 5-year compound annual growth
- $7,797 per capita
- Inflation (CPI):
- FDI Inflow:
Swaziland’s economy is mired in stagnation, destabilized by poor governance, ongoing social unrest, and a lack of progress in structural reforms. Undermining macroeconomic stability and much-needed economic development, the mismanagement of public finance has aggravated the country’s fiscal crisis over the past five years. The inefficient regulatory framework continues to curb the emergence of a dynamic private sector.
Economic Freedom Snapshot
- 2016 Economic Freedom Score: 59.7 (down 0.2 point)
- Economic Freedom Status: Mostly Unfree
- Global Ranking: 94th
- Regional Ranking: 11th in Sub-Saharan Africa
- Notable Successes: Trade Freedom and Monetary Freedom
- Concerns: Rule of Law, Management of Public Finance, and Financial Freedom
- Overall Score Change Since 2012: +2.5
King Mswati III rules Africa’s last absolute monarchy. Political parties are banned, and rights groups accuse the government of imprisoning journalists and pro-democracy activists. Parliamentary candidates are handpicked by chiefs who are loyal to the king, and international observers declared the most recent elections, held in September 2013, not credible. In June 2014, as a result of crackdowns on peaceful demonstrations and a 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. Private-sector producers of soft-drink concentrate, textiles, and cane sugar are among the leading exporters.
Corruption is a major problem, especially in public contracting, government appointments, and school admissions. The dual judicial system includes courts based on Roman–Dutch law and traditional courts using customary law. Although the judiciary is independent, the king has ultimate judicial power, and the royal family and government often refuse to respect rulings with which they disagree. Sixty percent of land lacks clear titles.
The top individual income tax rate is 33 percent, and the top corporate tax rate is 27.5 percent. Other taxes include a fuel tax and a sales tax. The total tax burden equals 32.6 percent of GDP. Government spending amounts to 34.2 percent of GDP. Public debt is equivalent to about 16 percent of total domestic output. The civil service wage bill continues to crowd out other spending and needed investment.
The regulatory framework remains burdensome, with many requirements that increase the overall cost of entrepreneurial activity. A formal labor market has not been fully developed, and informal labor activity remains substantial. Inflation in Swaziland has edged up slightly due to electricity tariffs and public transport fares as well as the weaker rand and higher inflation in South Africa.
Swaziland’s average tariff rate is 0.6 percent. The government screens new foreign investment. State-owned enterprises operate in the energy and mining sectors. Although foreign investment is officially welcome, deficiencies in the investment regime such as heavy bureaucracy inhibit growth in long-term investment. The financial sector remains underdeveloped, and most of the population still lacks access to formal credit.