Claims by King Mswati III and his government that the economic crisis in
his kingdom is largely due to world economic conditions have been undermined by
two new reports.
And, a separate report says that
political instability in Swaziland, where King Mswati rules as sub-Saharan
Africa’s last absolute monarch, stops firms investing in his kingdom.
African Economic Outlook reported there falls in production in agriculture, mining, manufacturing
over the past year.
The report stated, ‘[M]anufacturing contracted by 0.6 percent, making it
the only sector that has contracted for four consecutive years, with a
cumulative decline of almost 8 percent.
‘The services sector, which had grown by more than 5 percent in 2009 and
2010, has experienced a significant slowdown in economic activity. In 2012, the
services sector recorded a mere 0.4 percent growth.’
African Economic Outlook said the freezing of public sector salaries for
the past two years, ‘has limited the purchasing power of about 10 percent of
the labour force and further reduced consumer confidence and domestic demand’.
It said the slow implementation of the government’s ‘Economic Recovery
Strategy’ has ‘prolonged the negative impacts of the fiscal crisis’.
It went on, ‘Subsequently, public and private investments have remained
low, even by regional standards. Therefore addressing the structural weaknesses
characterising Swaziland’s slow growth remains critical – the business
environment and management of public resources need to be improved to build
confidence in the economy and encourage private investment. Further actions are
also required to address skills shortages.’
A separate report by consultancy
DNA Economics in Pretoria, found that fewer than 10 percent of 400 firms
questioned in South Africa would consider investing in Swaziland, but more said
they would consider trading with the kingdom.
The survey also interviewed 25 Swazi firms, which agreed that the
country’s political situation was detrimental to the stable foundations desired
by foreign investors, particularly when investors could do business in
economically robust Mozambique or other regional economies, all of which are
faring better than Swaziland.
‘Swaziland has fallen behind in sub-Saharan Africa in terms of growth.
The global crisis has affected every country but why is it that others have
managed to do better? This could be attributed to domestic issues,’ Matthew
Stern of DNA Economics told Business
Report newspaper in South Africa.
One banker told the newspaper, ‘We can’t openly discuss what is keeping
Swaziland down, because it is governance. People are terrified to talk for fear
of being labelled traitors and terrorists, which is what this government does
with its critics, no matter how well meaning.’
He added that until it could be open to honest discussion, the root
problems hindering its economy would fester.
‘Swaziland is different from other sub-Saharan African countries, and
until that changes investors will remain nervous about coming here. In fact,
they’ve stopped.’
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