Authors : Peninah Kariuki, Fatou Leigh
Real gross domestic product (GDP) growth slowed from 2.5% in 2014 to 1.7% in 2015. The major factors include a drought that hurt agricultural production, a weaker mining sector and subdued prospects in South Africa, the major trading partner. Growth in the tertiary sector also slowed down, but the overall impact was cushioned by an increase in investment in government capital investment programmes. Short-term prospects in 2016 and 2017 remain muted, with economic growth expectations remaining below 2% per annum. Growth prospects are predicated on improved weather conditions and enhanced policy efforts to address critical challenges in areas such as the business climate and export diversification. This is particularly important in view of the country’s loss of eligibility under the African Growth and Opportunity Act (AGOA) in January 2015 and its high dependence on volatile revenues from the Southern African Customs Union (SACU).
Major social challenges include the high rate of HIV/AIDS and an uneven distribution of resources. Despite its classification as a low middle-income country, the incidence of poverty is high, with 63% of the population living below the poverty line. Other problems include a high unemployment rate of 28.1%, and a low Human Development Index (HDI) ranking of 150 out of 187 countries; Swaziland’s HDI score of 0.531 is mainly due to the high maternal mortality rate, underdeveloped labour markets and mistrust in national government. There has been some progress over the past three decades in the fight against HIV/AIDS and the incidence rate has declined trend from 3.1% in 2010 to 2.23% in 2013, to 1.94% in 2015, but the HIV prevalence of 26% among 15-49 year olds is among the highest in the world. This has translated into increased health spending and high numbers of orphaned and vulnerable children requiring social protection.
Swaziland is among the smallest countries in Africa in both size and population of whom 78% live in rural areas and 22% in urban areas. It is projected that the share of the population living in towns and cities will rise to 26.5% by 2030. The main urban centres are Mbabane, the administrative capital, and Manzini, the commercial hub. The two cities and the corridor between them support approximately 75% of the country’s urban population. Growth in both Manzini and Mbabane has been largely informal and about 60% of urban Swazi households live in unplanned and/or un-serviced informal settlements. The central location of the Manzini-Mbabane corridor makes it a prime area for transportation networks linking to other areas in the country, with consequent overcrowding as a result of internal migration. Other challenges arising from increased urbanisation include providing adequate access to sanitation and power, and dealing with air and water pollution, inadequate waste management and increased crime rates. Local governments are hard pressed to raise adequate financial resources to address these challenges and mainly rely on transfers from the central government. The government remains committed to prioritising urban development, through initiatives such as the Urban Development Programme, so as to harness fully the inherent potential from this key segment of the economy while ensuring its sustainability.
Africa: economic transformation hinges on unlocking potential of cities, says the African Economic Outlook 2016
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