Swaziland

Politics:

• Analysis

  Swaziland politics: Quick View - Another constitutional crisis

  Event

  The Prime Minister, Sibusiso Dlamini, has refused to resign, contrary to the constitution, after a parliamentary vote calling for his resignation.

  Analysis

  The genesis of the problem was an order from the prime minister to the Swaziland Post and Telecommunications Corporation (SPTC) to withdraw from the lucrative mobile network in favour of MTN Swaziland (the local subsidiary of the South African firm, MTN). King Mswati III is a shareholder in the local MTN operation and his daughter, Princess Sikhanyiso Dlamini, is a member of the board. This decision prompted parliament to take an uncharacteristic step on October 3rd of supporting the motion calling for the prime minister's resignation. The members of parliament (MPs) were probably attempting to earn some popular support ahead of the 2013 elections, after the people at a sibaya (a national consultation convened by the king at which ordinary Swazis can express their views) in August called for the resignation of the prime minister and cabinet. The parliamentary vote was 42-6 in favour of the motion. The vote was welcomed by ordinary Swazis, who face higher tariffs in a market lacking in competition.

  The prime minister has stood firm and ordered the cabinet to carry on business as usual. The question now is how the king will react. The most likely course of events is that the king will do nothing, hoping that the issue will peter out. This is probable, given that the MPs do not have the resources to mount a court challenge, and neither do the local civil organisations who also called for the resignation of the prime minister and cabinet.

  October 11, 2012

• Background

  Swaziland: Key figures

  King Mswati III

  King since 1986, and previously considered a moderate, he has adopted an increasingly hard line against the notion of a multiparty system.

  Prince Masitsela

  Regional administrator of Manzini District. Prince Masitsela is the most senior prince and is generally considered to be one of the main leaders of the traditionalists.

  Sibusiso Dlamini

  Prime minister from 1998-2003 and again from October 2008. Mr Dlamini is a hardliner, who plunged Swaziland into a judicial crisis in 2002-04. His appointment has been welcomed by the progressive forces, who believe that it will accelerate open confrontation and political change. He remains influential among the traditionalists.

  Jan Sithole

  Secretary-general of the Swaziland Federation of Trade Unions (SFTU). Mr Sithole is popular among workers and is influential in regional and international trade union circles.

  Mario Masuku

  President of the People's United Democratic Movement (Pudemo). Mr Masuku enjoys the support of radicals and the Swaziland Youth Congress. His stature rose following his lengthy detention and subsequent acquittal on a sedition charge in 2002.

  Themba Masuku

  Deputy prime minister. Mr Masuku returned to the cabinet in October 2008 after a spell with the UN Food and Agriculture Organisation (FAO). He is conservative but more diplomatic than the hardliners.

  Comfort Mabuza

  Director of the Media Institute of Southern Africa. Mr Mabuza is outspoken in favour of political change and open democracy. He is influential in ensuring that political restrictions receive coverage in the regional and international media.

  Chief Gelane Zwane

  An appointed senator and president of the senate, Chief Gelane Zwane will ensure that parliament toes the traditionalist line.

  November 13, 2008

• Structure

  Swaziland: Political structure

  Official name

  Kingdom of Swaziland

  Form of state

  Absolute monarchy

  Legal system

  Parallel systems of Roman-Dutch and customary law

  National legislature

  A bicameral parliament; the House of Assembly is elected through the tinkhundla electoral system, which has three stages: nomination, primary election and secondary election; a secret ballot is now conducted for the last two stages; the Assembly has 55 elected members and ten royal appointees; the Senate consists of 30 members, 20 of them royal appointees and ten selected by the Assembly; the king may legislate by decree; a new constitution containing a number of small changes to the political system came into effect in February 2006

  National elections

  Last parliamentary election in September 2008; next election scheduled for 2013

  Head of state

  Monarch; succession governed by custom

  National government

  The monarch and his cabinet; the new prime minister and cabinet were appointed in October 2008

  Political parties

  Political parties are permitted but are not allowed to put up candidates for elections under the tinkhundla (traditional voting) system; the leading progressive political party, the People's United Democratic Movement, has been banned under the Suppression of Terrorism Act since November 2008

  The government

  Monarch: Mswati III

  Prime minister: Sibusiso Dlamini

  Deputy prime minister: Themba Masuku

  Key ministers

  Agriculture & co-operatives: Clement Dlamini

  Commerce, industry & trade: Jabulile Mashwama

  Economic planning & development: Prince Sihlangusemphi

  Education & training: Wilson Ntjangase

  Finance: Majozi Sithole

  Foreign affairs & international co-operation: Mtiti Fakudze

  Health: Benedict Xaba

  Home affairs: Prince Gcokoma

  Housing & urban development: Lindiwe Dlamini

  Information, communications & technology: Winnie Magagula

  Justice & constitutional affairs: Mgwagwa Gamedze

  Labour & social security: Lutfo Dlamini

  Natural resources & energy: Princess Tsandzile

  Public service: Patrick Mamba

  Public works & transport: Ntuhuko Dlamini

  Sports, culture & youth affairs: Hlobsile Ndlovu

  Tinkhundla administration & development: Rogers Mamba

  Tourism & environment affairs: Mduduzi Dlamini

  Central Bank governor

  Martin Dlamini

  October 16, 2012

Economy:

• Background

  Swaziland: Economic background

  Real gross domestic product by sector
  (% share of GDP)
  	2003	2004	2005	2006	2007
  Agriculture	12.3	12.3	12.2	12.0	12.0
  Industry	46.9	46.7	46.7	46.3	45.8
  Services	40.8	41.0	41.1	41.7	42.1
  Source: Economist Intelligence Unit.

  Download text file (csv format)

  November 13, 2008

• Structure

  Swaziland: Economic structure

  Economic structure: Annual indicators

  	2008a	2009a	2010a	2011a	2012b
  GDP at market prices (E bn)	25.0	25.0	27.1	28.9	31.1
  GDP (US$ bn)	3.0	3.0	3.7	4.0	3.8
  Real GDP growth (%)	2.3	1.2	2.0	1.3	1.3
  Consumer price inflation (av; %)	12.7	7.4	4.5	6.1	8.5a
  Population (m)	1.15	1.17	1.19	1.20	1.22
  Exports of goods fob (US$ m)	1,569	1,660	1,805	2,011	2,000
  Imports of goods fob (US$ m)	-1,579	-1,781	-1,955	-2,108	-2,122
  Current-account balance (US$ m)	-232	-415	-496	-394b	-53
  Foreign-exchange reserves excl gold (US$ m)	752	959	756	601	757a
  Total external debt (US$ bn)	0.4	0.4	0.6	0.7	0.7
  Debt-service ratio, paid (%)	2.4	2.0	1.7b	2.1b	1.4
  Exchange rate (av) E:US$	8.3	8.4	7.3	7.3	8.1a
  a Actual. b Economist Intelligence Unit estimates.

  Download the numbers in Excel

  Origins of gross domestic product 2010a	% of total	Components of gross domestic product 2010b	% of total
  Agriculture & forestry	8.0	Private consumption	75.5
  Industry	46.5	Government consumption	26.8
  Manufacturing	41.7	Gross fixed investment	11.1
  Services	45.5	Exports of goods & services	54.8
  		Imports of goods & services	68.2
  Main exports 2008	% of total	Main imports 2007	% of total
  Miscellaneous Ediblesc	32.6	Manufactured goods	27.2
  Sugar	18.8	Machinery & transport equipment	21.5
  Textiles	8.0	Food & live animals	19.8
  Wood pulp	4.1	Petroleum products	12.0
  Destination of exports 2008	% of total	Origin of imports 2008	% of total
  South Africa	64.7	South Africa	91.8
  US	9.1	Hong Kong	1.0
  Kenya	5.4	South Korea	1.0
  UK	5.0	China	0.9
  a At factor cost. b At market prices. c Mainly soft-drink concentrate.

  Download the numbers in Excel

  Download text file (csv format)

  October 16, 2012

• Outlook

  Swaziland: Country outlook

  Swaziland: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  OVERVIEW: Social unrest will stay high over the 2013-14 forecast period as the Swazi regime makes little effort to respond to popular discontent with the status quo. Progress in resolving the fiscal crisis is likely to be neither prompt nor smooth. The broad policy stance is expected to stay market-oriented, and the fiscal incentives offered to new investors are likely to be largely retained. The fiscal deficit is forecast at 2.6% of GDP in fiscal year 2013/14 (April-March) and 2% of GDP in 2014/15, on the assumption that the government makes some spending cuts in response to growing fiscal pressure to regain access to external financing. Real GDP growth is forecast at 0.9% in 2013 and 1.4% in 2014, in line with expected trends in public expenditure. In both years it will be held back by weak competitiveness in the vital manufacturing sector. Average inflation is forecast to moderate from 8.5% in 2012 to 6.5% in 2013 and 6% in 2014, in line with trends in South Africa (major source of imports) and global commodity prices. The current-account deficit is forecast at 5% of GDP in 2013 and 2.3% of GDP in 2014 driven by fluctuations in Swaziland's receipts from the Southern African Customs Union (SACU) and prices for its second-largest export, sugar.

  DOMESTIC POLITICS: Further protests are expected in the main towns and cities of Swaziland, organised by the unions and pro-democracy activists. Although unrest is highly unlikely to spread to rural areas-where the use of confrontation is unpopular-the effective mobilisation of the urban population, combined with pressure from South Africa, could create enough impetus for modest democratic reform. Although the protests have been sparked by the fiscal crisis, they have their roots in a range of longer-standing issues, notably the extravagance of the royals and the political elite, the mismanagement of public money and the government's stubborn resistance to calls for democratic reform. In line with this, the protesters have six main demands: a switch from the tinkhundla (traditional) voting system, under which political parties are not allowed to contest elections, to a multi-party system; the downgrading of the powers of the king, Mswati III (which include the appointment of the prime minister, the cabinet and key advisory committees); a change in the political order from an absolute monarchy to a constitutional monarchy; less spending by the royals and the elite; the resignation of the cabinet; and the unconditional return of all political exiles. So far, the king has stubbornly resisted these demands. Low-level unrest is, therefore, expected to continue. If pro-democracy candidates were to win a majority at the next parliamentary election, due in 2013, it is possible that the king would respond by revoking the constitution and trying to rule by decree. This would lead to even greater political instability, although it would also intensify pressure for international intervention. Pro-democracy groups are divided on whether to continue boycotting elections under the tinkhundla system-a strategy that has had little impact. Some groups are in favour of their members contesting the elections as independents and then using their parliamentary representation to amend the constitution to make the switch to a constitutional monarchy. However, it is likely that some pro-democracy groups will remain committed to a boycott and that the modernists as a whole will not win enough seats to change the constitution. If a shift to multi-party elections were to take place, the main conservative modernist organisation, Sive Siyinqaba Sibahle Sinje, would be likely to win the most votes. However, there have been signs that some traditionalists are trying to revive the royalist party, the Imbokodvo National Movement (INM). The INM won all three elections prior to 1973 and would probably win a large share of the rural vote (assuming that it had the king's support, which remains unclear), while Sive Siyinqaba would win most of the urban vote (which accounts for a little over 20% of the total). Neither would be likely to win a majority, creating the need for a coalition either between the INM and Sive Siyinqaba or between Sive Siyinqaba and some of the progressive modernist groups which, however, continue to fragment. If the modernists seemed likely to win a majority, the risk of vote-rigging would be significant, as the royalists remain deeply averse to relinquishing power.

  INTERNATIONAL RELATIONS: Despite its desperate need for external financing, Swaziland has remained impervious to external pressure for democratic reform, notably from South Africa, which has offered it a R2.4bn (US$286m) loan on condition that it introduces political and economic reform. Some change is likely on this front from late 2013, as the fiscal situation worsens. The country will continue to cultivate closer ties with Asia and the Middle East. Its long-standing ties with Taiwan are likely to stay in place, preventing the emergence of closer relations with China. The country will continue to support regional trade integration, but not at the cost of a further erosion of the benefits that it derives from its membership of SACU.

  POLICY TRENDS: The IMF's withdrawal of its advisory team from Swaziland in May highlighted the government's failure to lay out a viable plan to restore order to the public finances. The government has also shown little sign that it is willing to implement the political and fiscal reforms that form the preconditions for its access to the loan offered by South Africa last year. This situation is likely to change gradually from 2013/14 as the fiscal constraints become even tighter, forcing the government to take action. Nevertheless, the fiscal crisis is unlikely to end either promptly or smoothly, prolonging uncertainty for businesses. The broad policy stance will remain market-oriented. The government is likely to maintain the various fiscal incentives that it offers to new investors, such as duty-free imports of machinery and equipment. The Swaziland Investment Promotion Agency's role as a one-stop shop for investors will continue to ease some of the regulatory burden that has kept the country towards the lower end of the World Bank's Doing Business ranking (in which it came 124th out of 183 countries in 2012). Weaknesses in the quality of education could worsen owing to spending cuts, exacerbating the shortage of skilled workers. Swaziland is expected to remain a member of the Common Monetary Area (which currently also comprises Lesotho, Namibia and South Africa) and will continue to gain preferential access to regional markets through its membership of SACU and the Common Market for Eastern and Southern Africa. Investment is set to be boosted by an agreement between South Africa and Swaziland for the construction of a 146-km rail connection to transport coal from South Africa's Mpumalanga region to Sidvokodvo in Swaziland.

  ECONOMIC GROWTH: Real GDP growth will be constrained by the government's failure to lay out a viable plan to restore macroeconomic stability. Manufacturing capacity has fallen in recent years as a number of textile and apparel companies, and pulp and paper mills have been closed because of a decline in competitiveness. This trend is unlikely to be reversed, especially while economic and political instability persists. The manufacturing sector accounts for around 45% of GDP and its weak competitiveness will hold back overall growth. Prospects for mining are more favourable following the reopening of the iron ore mine at Ngwenya. Agricultural production will be supported by the Lower Usuthu Smallholder Irrigation Project. Growth in services will be constrained by the tight fiscal policy stance. Government spending, which makes up about one-third of nominal GDP, is expected to fall slightly in 2013 and to grow only modestly in 2014. Overall real GDP growth is expected to fall from an estimated 1.3% in 2012 to 0.9% in 2013 before picking up to 1.4% in 2014. In 2013/14 SACU revenue is projected to decline by 26%, leading total revenue to fall by more than 10%. The Fund's recent withdrawal was followed shortly after by the African Development Bank's decision to freeze US$100m worth of general budget support to Swaziland. The Economist Intelligence Unit expects that this, combined with the decline in revenue, will force the government to cut public spending in 2013/14. The rand is forecast to depreciate from R8.10:US$1 in 2012 and R8.25:US$1 in 2013 and 2014 because of South Africa's persistent current-account deficit, relatively high inflation and political uncertainty surrounding the 2014 election, although exogenous shocks or unwelcome policy shifts could lead to a faster decline.

  EXTERNAL ACCOUNT: Exports are forecast to fall slightly in 2013 and pick up in 2014, in line with price trends for sugar, the country's second-largest export (behind miscellaneous edibles, which consist mainly of output from the country's Coca-Cola plant). Exports will also be hit by a decline in competitiveness as inflation in Swaziland remains above that in South Africa, the main market for Swazi exports. Despite a modest decline since January, inflation has remained much higher, at 8.7% in July. Imports are expected to grow modestly as domestic demand remains weak and global commodity prices decline slightly. A small trade deficit is expected in both years. Services exports will remain small, entrenching the large services deficit. Income debits are expected to stagnate as the profits of foreign companies are held back by weak economic conditions. The current transfers surplus is expected to fall in 2013 and pick up in 2014, in line with official projections for receipts from SACU. Overall, the current-account deficit is forecast to widen from 1.4% of GDP in 2012 to 5% of GDP in 2013, before narrowing to 2.3% of GDP in 2014 driven by fluctuations in SACU revenue and sugar prices. Despite the country's increasingly restricted access to foreign financing, we expect that it will receive sufficient funds to finance these modest current-account deficits.

  October 30, 2012

View detailed map

Country Briefing

Land area

17,364 sq km

Population

1.2m (2012 UN estimate)

Main towns

Population (2012 World Gazetteer estimates):

Greater Manzini: 97,934

Mbabane (capital): 62,630

Climate

Subtropical; near-temperate on Highveld

Weather in Mbabane (altitude 1,163 metres)

Hottest months, January and February, 15-25°C; coldest month, June, 5-19°C; driest month, June, 18 mm average rainfall; wettest month, January, 252 mm average rainfall

Languages

Siswati and English

Measures

Metric system

Fiscal year

April 1st-March 31st

Currency

Lilangeni = 100 cents; plural emalangeni (E); pegged at parity to the rand

Time

2 hours ahead of GMT

Public holidays

January 1st, April 6th (Good Friday), April 9th (Easter Monday,) April 19th (King's Birthday), April 25th (National Flag Day), May 1st (Labour Day), May 17th (Ascension Day), July 22nd (King Sobhuza's Birthday), September 6th (Independence Day), December 25th (Christmas Day), December 26th (Boxing Day)

July 17, 2012