Economy Of Eswatini

The economy of Eswatini is characterized by a relatively diversified structure, encompassing multiple sectors that contribute to the nation’s overall economic output. This diversification reflects a combination of traditional and modern industries, which together form the backbone of Eswatini’s economic activity. Agriculture, forestry, and mining collectively play a significant but not dominant role, accounting for approximately 13 percent of the country’s Gross Domestic Product (GDP). These primary sectors have historically been foundational to the economy, with agriculture particularly important due to the country’s rural population and reliance on subsistence and commercial farming. Forestry resources contribute through timber production and related activities, while mining, though smaller in scale, involves the extraction of minerals such as coal and diamonds, which add value to the economy. The manufacturing sector holds a more substantial share of Eswatini’s GDP, representing about 37 percent of the total economic output. This sector is largely driven by industries related to textiles and sugar processing, which have developed as key areas of industrial activity. The textile industry benefits from regional trade agreements and preferential access to international markets, enabling Eswatini to export garments and related products, particularly to countries such as the United States under the African Growth and Opportunity Act (AGOA). Sugar processing, on the other hand, capitalizes on the country’s favorable climate for sugarcane cultivation, with sugar mills and refineries adding value to raw agricultural products before export. This integration of agriculture and manufacturing highlights the interconnectedness of Eswatini’s economic sectors and underscores the importance of agro-industrial activities in driving growth and employment. The services sector constitutes the largest portion of Eswatini’s economy, making up the remaining 50 percent of the GDP. Within this sector, government services emerge as the leading component, reflecting the significant role of public administration, education, health, and social services in the national economy. The prominence of government services is indicative of the state’s involvement in providing essential services and infrastructure, which supports both the population and other economic activities. Beyond government, the services sector also includes financial services, retail trade, tourism, and telecommunications, each contributing to the diversification and resilience of the economy. The growth of services has been influenced by urbanization, improvements in infrastructure, and efforts to modernize the economy, positioning this sector as a critical driver of employment and economic development. Notwithstanding the detailed breakdown of Eswatini’s economic composition, the information available requires additional citations for verification, highlighting the need for reliable and up-to-date sources to substantiate the data presented. The absence of comprehensive references limits the ability to fully assess the accuracy and current relevance of the economic statistics, underscoring a gap in documented evidence. To enhance the credibility and depth of information on Eswatini’s economy, it is recommended that further research draw upon a variety of authoritative sources. These include news outlets and newspapers that provide current economic reporting, books offering in-depth analyses and historical perspectives, scholarly articles that present peer-reviewed research, and databases such as JSTOR, which archive academic publications. As of November 2009, there has been a specific call to action to improve the article’s reliability by incorporating such sources, thereby ensuring that the economic data reflects verified and comprehensive knowledge. This approach supports a more nuanced understanding of Eswatini’s economic landscape and facilitates informed discussions about its development challenges and opportunities.

In Eswatini, Title Deed lands are predominantly dedicated to the cultivation of high-value crops such as sugarcane, forestry products, and citrus fruits. These lands are distinguished by significant levels of investment, including the implementation of advanced irrigation systems that enhance crop yields and ensure consistent production even during periods of limited rainfall. The capital-intensive nature of agriculture on Title Deed lands has facilitated the adoption of modern farming techniques, mechanization, and improved inputs such as fertilizers and pest control measures. As a result, these areas demonstrate markedly higher productivity compared to other agricultural zones within the country, contributing substantially to Eswatini’s formal economy and export earnings. The productivity observed on Title Deed lands is a direct consequence of sustained financial commitment and the application of contemporary agricultural practices. Investors and commercial farmers operating on these lands have access to better infrastructure, including roads and processing facilities, which further supports efficient production and market access. The use of irrigation, in particular, mitigates the risks associated with Eswatini’s variable climate, allowing for multiple cropping cycles and the cultivation of water-intensive crops like sugarcane. This combination of investment and technology has positioned Title Deed lands as a cornerstone of Eswatini’s agricultural sector, generating significant economic value and employment opportunities within commercial farming enterprises. In stark contrast, approximately 75 percent of Eswatini’s population is engaged in subsistence agriculture on Swazi Nation Land, which is communally held and governed by traditional authorities under customary tenure arrangements. This land tenure system is characterized by limited access to formal credit, minimal investment in infrastructure or inputs, and a reliance on rain-fed agriculture. Consequently, agricultural productivity on Swazi Nation Land remains low, with most households cultivating small plots primarily for household consumption rather than commercial sale. The subsistence nature of farming in these areas results in limited economic output and minimal contribution to national GDP, perpetuating rural poverty and food insecurity among a large segment of the population. The dualistic structure of Eswatini’s economy is evident in the juxtaposition between the high-productivity sectors and the subsistence agricultural system. On one hand, sectors such as textile manufacturing and industrialized agriculture on Title Deed lands exhibit growth, efficiency, and integration into regional and global markets. On the other hand, subsistence agriculture on Swazi Nation Land has experienced declining productivity due to soil degradation, limited access to inputs, and the absence of investment. This divergence creates a bifurcated economic landscape where a relatively small, capital-intensive sector thrives while the majority of the population remains engaged in low-productivity activities. The persistence of this dual structure has significant implications for the overall economic performance of Eswatini. The disparity between the productive commercial agricultural sector and the less productive subsistence farming sector is widely regarded as a key factor contributing to Eswatini’s overall low economic growth. While the Title Deed lands generate substantial export revenues and formal employment, the majority of the population on Swazi Nation Land remains economically marginalized, with limited opportunities for income generation beyond subsistence farming. This imbalance restricts the country’s ability to achieve inclusive growth and hampers efforts to diversify the economy. Moreover, the concentration of wealth and resources within the commercial farming sector exacerbates structural inequalities and limits the potential for broad-based economic development. The economic structure shaped by these contrasting agricultural systems also results in pronounced levels of inequality and unemployment within Eswatini. The commercial agricultural enterprises on Title Deed lands, along with associated industries such as sugar processing and forestry, provide relatively well-paying jobs but employ only a fraction of the labor force. Meanwhile, the majority engaged in subsistence agriculture face underemployment and lack access to formal labor markets. This situation contributes to high unemployment rates, especially among rural youth, and reinforces socio-economic disparities between those with secure land tenure and capital and those reliant on communal lands with limited economic prospects. The unequal distribution of land, capital, and opportunities remains a central challenge for policymakers seeking to address poverty and promote equitable development. Understanding the contrasting agricultural systems and land tenure arrangements is essential to comprehending the broader economic challenges faced by Eswatini. The coexistence of Title Deed lands with their commercial, capital-intensive agriculture alongside the predominantly subsistence-oriented Swazi Nation Land reflects historical patterns of land allocation and governance. These arrangements have shaped the distribution of resources, investment, and productivity across the country, influencing patterns of wealth, employment, and social welfare. Addressing the disparities inherent in this dual structure is critical for fostering sustainable economic growth, reducing inequality, and improving livelihoods for the majority of Eswatini’s population who depend on agriculture for their survival.

Economic growth in Eswatini has consistently lagged behind that of its neighboring countries, with the nation recording an average real gross domestic product (GDP) growth rate of approximately 2.8 percent since 2001. This growth rate is nearly two percentage points lower than the average growth observed among other member countries of the Southern African Customs Union (SACU), indicating a relatively sluggish economic performance within the regional context. The comparatively modest expansion of Eswatini’s economy has been influenced by a constellation of structural and socio-economic challenges that have constrained productivity and limited diversification. Among these, low agricultural productivity in the Swazi Nation Land, which constitutes a significant portion of the country’s arable land, has been a persistent impediment. The agricultural sector, traditionally a backbone of the economy, has struggled to achieve substantial growth due to outdated farming techniques, limited access to modern inputs, and fragmented land tenure systems that hinder economies of scale. Compounding the agricultural difficulties, Eswatini has been frequently affected by recurrent droughts, which have exacerbated food insecurity and reduced crop yields, thereby undermining rural livelihoods and the broader economy. These climatic shocks have had a particularly deleterious impact on subsistence farmers, who represent a large segment of the population. Additionally, the country has faced a severe public health crisis due to the high prevalence of HIV/AIDS, which has significantly affected the labor force by reducing productivity and increasing healthcare costs. The epidemic has also placed substantial strain on social services and public resources, further complicating efforts to stimulate economic growth. Beyond these factors, the presence of an overly large and inefficient government sector has been identified as a critical constraint on economic performance. The public sector’s disproportionate size relative to the economy, coupled with inefficiencies in service delivery and resource allocation, has diverted resources away from productive investment and innovation. Eswatini’s public finances experienced a marked deterioration in the late 1990s, reversing a decade-long period characterized by sizable budget surpluses. During the 1980s, the government had maintained relatively sound fiscal health, benefiting from robust SACU revenues and prudent expenditure management. However, by the late 1990s, a combination of declining revenues and rising expenditure commitments undermined this fiscal stability. The deterioration in public finances was driven in part by a decline in government revenues, which failed to keep pace with the expanding demands on the state budget. At the same time, government spending increased significantly, leading to the emergence of substantial budget deficits. These deficits persisted over subsequent years despite various fiscal consolidation efforts aimed at restoring balance and sustainability to public accounts. The increase in government expenditure during this period did not translate into proportional economic growth, nor did it significantly alleviate poverty levels within the country. Although the poverty headcount ratio experienced slight fluctuations during the early 2000s, as reported by the Swaziland Household Income and Expenditure Survey (SHIES) 2010, the overall impact of increased public spending on poverty reduction remained limited. This disconnect between expenditure and developmental outcomes has been attributed to the allocation patterns of government spending, which have favored current expenditures over capital investments. A substantial portion of the increased government spending was directed towards recurrent costs, including wages, transfers, and subsidies, rather than towards infrastructure development or programs that could stimulate long-term economic growth. The wage bill, in particular, emerged as a significant component of public expenditure, accounting for over 15 percent of GDP and constituting approximately 55 percent of total government spending. This level of public sector wage expenditure is among the highest recorded on the African continent, reflecting the large size of the government workforce and the rigidity of the public sector wage structure. The heavy wage bill has constrained fiscal flexibility, limiting the government’s ability to allocate resources to other critical sectors such as education, health, and infrastructure. Moreover, the dominance of wages in the budget has raised concerns about the sustainability of public finances and the efficiency of resource use within the government. In recent years, however, Eswatini has experienced a reversal of its fiscal decline, largely attributable to rapid growth in SACU revenues. The regional revenue-sharing mechanism, which allocates customs and excise revenues among member states, has provided a significant boost to the country’s fiscal position. This influx of SACU revenues enabled the government to record sizeable budget surpluses in the fiscal years 2006/07 and again in 2012/13, marking a period of improved fiscal health after years of deficits. The increased SACU inflows have become a critical pillar of Eswatini’s public finances, with these revenues now constituting over 50 percent of total government revenues. This heavy reliance on SACU revenues underscores the country’s dependence on regional trade arrangements and exposes it to vulnerabilities associated with fluctuations in customs revenues and regional economic conditions. Over the past two decades, Eswatini has also achieved a marked decline in its external debt burden, reflecting prudent debt management and favorable fiscal developments. External debt as a percentage of GDP fell below 20 percent by 2006, signaling a significant reduction in the country’s reliance on foreign borrowing. This decline in external debt has contributed to improved debt sustainability and enhanced the government’s capacity to manage its fiscal obligations. Concurrently, domestic debt levels have remained almost negligible, indicating limited recourse to domestic borrowing and a relatively low level of indebtedness within the local financial markets. The combined effect of reduced external debt and minimal domestic borrowing has positioned Eswatini with a comparatively manageable debt profile, providing a foundation for potential future fiscal stability and economic growth.

The economy of Eswatini exhibits a pronounced dependence on South Africa, which serves as its dominant trading partner. Over 90 percent of Eswatini’s imports originate from South Africa, underscoring the country’s reliance on its larger neighbor for a wide range of goods and services. Conversely, approximately 70 percent of Eswatini’s exports are directed to South Africa, reflecting a deeply integrated bilateral trade relationship that shapes the kingdom’s economic landscape. This interdependence is facilitated by geographic proximity, shared infrastructure, and membership in regional economic arrangements, which collectively contribute to the seamless flow of goods across their borders. Eswatini’s position as a trading partner is further strengthened by its abundant natural resources, which provide a foundation for export activities and economic engagement. The country’s resource endowment includes agricultural products such as sugar, forestry products, and minerals, which have historically formed the backbone of its export sector. These resources have enabled Eswatini to establish itself as a significant and advantageous trading partner within the Southern African region and beyond. The availability of such commodities not only supports domestic industries but also attracts foreign investment and trade opportunities, thereby reinforcing Eswatini’s role in regional and international markets. Beyond South Africa, Eswatini maintains important trade relationships with other global partners, notably the United States and the European Union (EU). These relationships are characterized by preferential trade agreements that have facilitated increased market access for Eswatini’s exports. The United States, through the African Growth and Opportunity Act (AGOA), has granted Eswatini trade preferences that have been particularly beneficial for the country’s apparel exports. Similarly, the European Union has extended preferential treatment for Eswatini’s sugar exports, enabling the country to compete more effectively in international markets. These trade preferences have played a crucial role in diversifying Eswatini’s export destinations and enhancing its economic resilience. Under the auspices of these preferential trade agreements, Eswatini experienced notable growth in key export sectors during the early 2000s. Apparel exports to the United States, supported by AGOA, grew by over 200 percent between 2000 and 2005, reflecting the significant impact of tariff-free access and other trade facilitation measures. This surge in apparel exports contributed to job creation and industrial development within Eswatini, particularly in manufacturing hubs. Concurrently, sugar exports to the European Union increased by more than 50 percent over the same period, benefiting from preferential pricing and quota arrangements that favored Eswatini’s sugar producers. The expansion of these export sectors underscored the importance of trade preferences in promoting economic growth and diversification. Despite these gains, the export sector in Eswatini faces considerable challenges stemming from potential changes in the global trade environment. The possible removal of trade preferences for textiles under AGOA threatens to undermine the competitive advantage that Eswatini’s apparel industry has enjoyed. Additionally, the accession of East Asian countries to similar preferential trade schemes introduces new competitors that may erode Eswatini’s market share in apparel exports. Furthermore, the gradual phasing out of preferential prices for sugar in the European Union market poses a significant risk to Eswatini’s sugar sector, which relies heavily on these favorable terms. These developments collectively jeopardize the sustainability of export growth and necessitate strategic responses to maintain competitiveness. In light of these potential trade disruptions, Eswatini confronts the critical challenge of preserving its competitive position in an evolving global economic landscape. Sustaining export performance and economic growth will require adaptive strategies that address both external market conditions and internal structural factors. One key element in meeting this challenge is the improvement of the investment climate within Eswatini. A recent Investment Climate Assessment highlighted that firms operating in Eswatini rank among the most productive in Sub-Saharan Africa, indicating a solid foundation for economic activity. This productivity advantage, however, must be leveraged and enhanced through targeted reforms and investments to ensure long-term competitiveness. Despite the relatively high productivity of Eswatini firms compared to regional peers, these enterprises remain less productive than those in the most productive middle-income countries globally. Nevertheless, when benchmarked against firms in lower middle-income countries, Eswatini’s companies compare favorably, suggesting a middle ground in terms of efficiency and output. This positioning reflects both opportunities and constraints, where Eswatini can capitalize on its existing strengths while addressing limitations that prevent it from reaching the productivity levels of more advanced economies. Enhancing firm-level productivity is therefore pivotal for economic diversification and resilience. Several factors impede the productivity of firms in Eswatini, with inadequate governance arrangements and infrastructure deficiencies among the most significant barriers. Governance challenges may include bureaucratic inefficiencies, regulatory constraints, and limited institutional capacity, all of which can increase the cost of doing business and reduce operational effectiveness. Infrastructure gaps, particularly in transportation, energy, and telecommunications, further constrain firms by limiting access to markets, increasing production costs, and reducing overall competitiveness. Addressing these impediments through policy reforms and investment in infrastructure is essential for fostering a more conducive environment for business growth and export expansion. Eswatini’s participation in regional economic organizations plays a vital role in shaping its trade and investment environment. As a member of the Southern African Customs Union (SACU), alongside Lesotho, Botswana, Namibia, and South Africa, Eswatini benefits from a common external tariff regime where import duties are uniformly applied across member countries. This arrangement facilitates trade within the customs union by eliminating internal tariffs and harmonizing trade policies, thereby promoting regional integration and economic cooperation. SACU membership also provides Eswatini with a share of customs revenue collected at the union’s external borders, which constitutes a significant source of government revenue. In addition to SACU, Eswatini is part of the Common Monetary Area (CMA), which includes Lesotho, Namibia, and South Africa. The CMA allows for the repatriation of funds and the unrestricted movement of capital among member countries, fostering financial integration and investment flows within the region. This monetary cooperation enhances economic stability and facilitates cross-border business activities by reducing currency risk and transaction costs. The CMA arrangement also supports Eswatini’s monetary policy framework and financial sector development through close coordination with its regional partners. While Eswatini issues its own national currency, the Swazi lilangeni (plural: emalangeni), it maintains a fixed exchange rate regime by pegging the lilangeni at par with the South African rand. This currency peg stabilizes exchange rate fluctuations and promotes trade and investment by providing predictability in currency valuation. The parity arrangement ensures that the lilangeni and the rand are interchangeable within Eswatini, further integrating the country’s economy with South Africa’s. This monetary linkage is a cornerstone of Eswatini’s regional economic strategy, reflecting its close economic ties with South Africa and its commitment to regional monetary cooperation.

Eswatini’s road infrastructure is notably well-developed, providing robust connectivity both within the country and to its neighboring states, particularly South Africa. The road network facilitates efficient transportation of goods and people, underpinning the country’s economic activities and regional trade. Major highways and arterial roads link Eswatini’s urban centers with border posts, ensuring seamless cross-border movement. This strong road connectivity to South Africa, Eswatini’s principal trading partner, has been instrumental in sustaining economic integration and enabling access to South African markets and ports. The country’s rail network, managed by Eswatini Railways, operates along two principal axes running in east–west and north–south directions. This dual orientation allows Eswatini to connect internally as well as with neighboring countries, supporting both domestic transportation needs and international trade flows. The older east–west rail line, known as the Goba line, plays a critical role in the export of bulk goods. This line extends from Eswatini to the Port of Maputo in Mozambique, providing a strategic outlet for the country’s exports to reach international markets via the Indian Ocean. Historically, the Port of Maputo served as the primary maritime gateway for Eswatini’s imports and exports. Until recent decades, most of the country’s imported goods were shipped through this Mozambican port, which was geographically advantageous due to its proximity and direct rail connection via the Goba line. This arrangement facilitated cost-effective and timely trade, supporting Eswatini’s economic activities. However, regional instability during the Mozambique conflict in the 1980s significantly disrupted these logistics. The civil war and associated security concerns in Mozambique compelled Eswatini to divert many of its exports away from Maputo towards South African ports, which were considered more secure and reliable during that period. In response to these challenges, a north–south rail link was completed in 1986, connecting the Eastern Transvaal rail network—now known as Mpumalanga in South Africa—with the South African ports of Richards Bay and Durban. This new rail corridor provided Eswatini with alternative access to major maritime gateways on the Indian Ocean, enhancing the country’s export and import capabilities. The linkage to Richards Bay and Durban, both significant ports in South Africa, diversified Eswatini’s trade routes and reduced its dependence on the Port of Maputo. This infrastructure development played a crucial role in stabilizing and expanding Eswatini’s trade logistics amid regional uncertainties. The mid-1980s marked a period of increased foreign investment in Eswatini’s manufacturing sector, which contributed significantly to the country’s economic growth. This influx of capital and expertise helped to modernize production capabilities, diversify the industrial base, and boost export-oriented manufacturing. As a result, Eswatini experienced higher rates of economic expansion, driven in part by the enhanced competitiveness of its manufacturing exports. The growth of this sector was closely tied to improvements in infrastructure and trade connectivity, which facilitated the efficient movement of raw materials and finished goods. Since mid-1985, the depreciation of the Swazi currency further enhanced the competitiveness of Eswatini’s exports on international markets. A weaker currency made Swazi goods more affordable to foreign buyers, stimulating demand and supporting export growth. This currency adjustment also had a moderating effect on the growth of imports, as foreign goods became relatively more expensive for domestic consumers. Consequently, the depreciation contributed to the emergence of trade surpluses during certain periods, reflecting a favorable balance between exports and imports. Despite these positive trends, the 1990s saw Eswatini frequently experiencing small trade deficits, indicating intervals when the value of imports exceeded that of exports. These deficits were often modest and reflected fluctuations in global commodity prices, domestic demand, and regional trade dynamics. Nonetheless, the overall trade performance during this decade underscored the ongoing challenges faced by Eswatini in maintaining a consistently favorable trade balance. The country’s infrastructure developments, currency policies, and foreign investment inflows collectively shaped its trade patterns and economic trajectory throughout this period.

Eswatini holds the position of the fourth largest sugar producer in Africa and ranks twenty-fifth globally in sugar production, underscoring the pivotal role that the sugar industry plays in the nation’s economic development. This prominence in sugar production has contributed substantially to Eswatini’s economic growth, positioning the country as a key player in the global sugar market despite its relatively small geographic and demographic size. The sugar industry’s influence extends beyond mere production figures, deeply impacting the livelihoods of many citizens and serving as a cornerstone of the agricultural sector. In 2014, Eswatini’s gross domestic product (GDP) was valued at approximately $8.621 billion United States dollars (USD) based on purchasing power parity (PPP). Within this economic framework, the agriculture sector contributed 7.2% to the overall GDP, with sugarcane cultivation and sugar product manufacturing representing the largest economic drivers within this sector. The cultivation of sugarcane has historically been a dominant agricultural activity, supported by favorable climatic conditions and fertile soils, which have enabled the country to maintain and expand its sugar production capabilities. The sector’s contribution to GDP reflects not only the direct economic output but also the employment opportunities and export revenues generated through sugar-related activities. Historically, Eswatini’s export economy was anchored by two primary commodities: wood pulp and sugarcane. According to data from the CIA World Factbook, these two products constituted the mainstay of the country’s export portfolio until January 2010, when the closure of the sole wood pulp producer occurred. This closure marked a significant shift in the country’s export dynamics, leaving sugarcane as the singular major export commodity. The cessation of wood pulp production effectively concentrated Eswatini’s export reliance on sugar, thereby intensifying the importance of the sugar industry for foreign exchange earnings and trade balance stability. The Royal Eswatini Sugar Corporation (RES Corporation) stands as the largest sugar producer within the country, commanding just under two-thirds of the total sugar production volume. RES Corporation plays a critical role in the national economy, not only through its substantial production output but also by providing employment to over 3,000 individuals, thereby contributing significantly to the socio-economic fabric of Eswatini. The corporation’s operations are centered around two principal sugar mills located in Mhlume and Simunye. These mills collectively process approximately 430,000 tons of sugarcane per harvesting season, utilizing advanced milling technologies and agronomic practices to optimize yield and sugar extraction efficiency. Following RES Corporation in scale is Ubombo Sugar Limited, the second-largest sugarcane producer in Eswatini. Established in the mid-20th century, Ubombo Sugar Limited has experienced remarkable growth, expanding its annual sugar production from a modest 5,600 tons in 1958 to approximately 230,000 tons in recent years. This expansion reflects both increased land cultivation and improvements in agricultural techniques, as well as investments in processing infrastructure. Ubombo Sugar Limited’s development has contributed to diversifying the sugar production landscape in Eswatini, complementing the output of RES Corporation and enhancing the country’s overall sugar export capacity. The third-largest producer in the country is Tambankulu Estate, notable for being the largest independent sugar estate in Eswatini. Tambankulu Estate manages an extensive landholding of 3,816 hectares dedicated to sugarcane cultivation, yielding an annual sugar production of around 62,000 tons. As an independent estate, Tambankulu plays a vital role in the sugar industry by supporting local employment and contributing to the diversification of production sources beyond the major corporate entities. The estate’s scale and output underscore the significance of private sector involvement in sustaining and expanding Eswatini’s sugar industry. Within the regional and international trade frameworks, the European Union (EU) emerges as Eswatini’s largest export partner, particularly within the Southern African Development Community (SADC). SADC is a regional intergovernmental organization comprising southern African countries that collaborate to enhance socioeconomic development and regional integration. The EU’s role as a primary export destination for Eswatini’s sugar reflects longstanding trade relationships and preferential agreements that have facilitated market access and favorable trading conditions. These partnerships have been instrumental in stabilizing Eswatini’s sugar export revenues and fostering economic ties beyond the African continent. During the 2014-2015 production season, Eswatini generated a total of 680,881 metric tons of sugar, of which approximately 355,000 metric tons were exported to the European Union. This volume positioned the EU as the largest single export destination for Eswatini’s sugar, accounting for more than half of the country’s total sugar exports during that period. The substantial export flow to the EU highlights the importance of preferential trade agreements and the demand for Eswatini’s sugar within European markets. Such exports contribute significantly to the country’s foreign exchange earnings and support the viability of the sugar industry. In addition to the European Union, the United States represented another key trade partner for Eswatini’s sugar exports. During the 2014-2015 fiscal year, Eswatini exported approximately 34,000 metric tons of sugar to the United States under the Tariff Rate Quota (TRQ) system. The TRQ system allows for a specified quantity of sugar to enter the U.S. market at reduced or zero tariff rates, providing Eswatini with access to a lucrative and stable market segment. This arrangement has helped diversify Eswatini’s export destinations and reduce overreliance on any single market, thereby enhancing the resilience of the sugar export sector. Sugar exports from Eswatini have demonstrated an upward trajectory, with projections for the 2015-2016 season indicating a record high production volume of approximately 705,000 metric tons. This anticipated increase in production was driven primarily by the expansion of cultivable land available for sugarcane farming, facilitated by improvements in land management and agricultural investment. The growth in production capacity reflects the ongoing commitment to enhancing the sugar industry’s output and export potential, which is critical for sustaining economic growth and employment in the country. Of the projected 705,000 metric tons of sugar production for the 2015-2016 season, around 390,000 metric tons were expected to be exported to the European Union under a newly established Economic Partnership Agreement (EPA). This agreement granted Eswatini duty-free and quota-free access to the EU sugar market, representing a significant improvement in trade terms compared to previous arrangements. The EPA was designed to promote sustainable development and economic integration between the EU and African, Caribbean, and Pacific (ACP) countries, thereby ensuring continued market access and competitiveness for Eswatini’s sugar exports in Europe. Historically, the European Union and the United States fulfilled sugar import quotas under arrangements similar to the Sugar Protocol, which was initiated in 1975. The Sugar Protocol guaranteed specific import quantities and prices for sugar produced by African, Caribbean, and Pacific countries, ensuring that these nations received prices above the prevailing world market rates. This system provided substantial profits and economic stability for sugar-producing countries like Eswatini by securing predictable export revenues and protecting against volatile global sugar prices. The protocol played a foundational role in shaping the sugar trade dynamics for several decades. The Sugar Protocol came to an end in 2009 as the European Union found it increasingly unsustainable to maintain the predetermined import demands and price supports stipulated by the agreement. The conclusion of the protocol led to its replacement with separate Economic Partnership Agreements, which maintained high demand for sugar from ACP countries but at significantly lower prices. These new agreements reflected broader shifts in global trade policies and market liberalization, requiring sugar producers like Eswatini to adapt to more competitive and less protected trading environments. Despite the termination of the Sugar Protocol, Eswatini received assurances from the European Union that its sugar exports would continue to be purchased under the new Economic Partnership Agreements. These assurances provided a degree of market stability and confidence for Eswatini’s sugar industry, enabling producers to plan for the future with the knowledge that the EU market would remain accessible. The continuation of preferential trade terms, albeit at lower prices, has been critical in sustaining the viability of Eswatini’s sugar exports amidst evolving global trade conditions.

Eswatini’s mineral sector has long operated under a regulatory framework established prior to the country’s independence, reflecting an outdated policy environment that has struggled to keep pace with modern mining industry standards and practices. This legacy framework has constrained the sector’s growth and adaptation to contemporary economic and environmental considerations, limiting the country’s ability to fully capitalize on its mineral resources. Recognizing these challenges, the government has initiated efforts to modernize the sector by developing a new mining policy aimed at revitalizing the industry and attracting investment. The formulation of this updated policy has involved the engagement of external consultants, whose services have been funded through a grant provided by China, underscoring the role of international cooperation and support in Eswatini’s economic development initiatives. In addition to the overarching policy reforms, legislative proposals have been introduced to facilitate small-scale mining activities. These measures seek to empower local communities and entrepreneurs by lowering barriers to entry and encouraging grassroots participation in mineral extraction. By promoting small-scale mining, the government aims to diversify the sector, stimulate local economic development, and reduce reliance on large-scale operations that have historically dominated the industry. This approach reflects a broader strategy to harness the mineral sector’s potential as a driver of inclusive growth and employment generation. The Bulembu asbestos mine has historically been the cornerstone of Eswatini’s mining sector, serving as the primary source of foreign exchange earnings derived from mineral exports. However, production at Bulembu has experienced a marked decline in recent years, which has had significant repercussions for national revenue and the overall contribution of mining to the economy. The downturn in asbestos output has been attributed to a combination of factors, including diminishing ore quality, changing global demand patterns, and increased regulatory scrutiny related to the health hazards associated with asbestos. This decline has underscored the vulnerability of the country’s mineral sector to external market fluctuations and the importance of diversifying mineral production. Beyond asbestos, Eswatini is known to possess deposits of several valuable minerals, including diamonds, iron ore, and gold. Despite the presence of these resources, their exploitation has remained limited due to a lack of sufficient investment and the absence of robust development policies tailored to the mining sector’s needs. The underutilization of these mineral deposits reflects broader structural challenges within the economy, including inadequate infrastructure, limited technical capacity, and regulatory uncertainties that have deterred both domestic and foreign investors. Consequently, the country’s mineral potential remains largely untapped, representing a missed opportunity for economic diversification and increased export revenues. The persistent lack of investment and effective development policies has significantly hindered the realization of Eswatini’s mineral wealth. This underperformance in resource extraction has not only constrained economic growth but also limited employment opportunities within the sector. Currently, fewer than 1,000 Swazis are directly employed in the formal mining industry, a figure that highlights the sector’s limited capacity to absorb local labor and contribute meaningfully to job creation. The small scale of formal mining employment contrasts with the country’s broader labor dynamics, where many Swazi workers have historically found livelihoods in related industries beyond national borders. A notable aspect of Eswatini’s mining-related labor history is the role of Swazi workers in processing timber harvested from the country’s extensive pine forests. These timber products were primarily supplied to mines located in South Africa, reflecting a regional economic interdependence that linked Eswatini’s natural resource base with the industrial demands of its larger neighbor. This cross-border relationship provided employment opportunities for Swazi workers, albeit outside the formal mining sector within their own country, and contributed indirectly to the national economy through wage earnings and remittances. In addition to timber processing, an estimated 10,000 to 15,000 Swazis were employed in South African mines, where they engaged in various mining operations. These migrant laborers played a significant role in supporting their families and communities back home through the remittance of wages earned abroad. The inflow of these remittances constituted an important source of foreign exchange and household income for Eswatini, supplementing the limited domestic employment opportunities available in the mining sector. However, the economic contribution of Swazi mineworkers has diminished over time, particularly following the collapse of the international gold market in the late 20th century. The downturn in global gold prices precipitated widespread layoffs and retrenchments within South Africa’s mining industry, which in turn adversely affected the employment prospects of Swazi workers in those mines. The reduction in mine labor demand led to a decline in wage remittances sent back to Eswatini, thereby weakening a critical component of the country’s economy. This shift underscored the vulnerability of Eswatini’s economic reliance on external labor markets and highlighted the need for domestic economic diversification, including the revitalization of its own mineral sector, to reduce dependence on foreign employment and stabilize income flows for its population.

Eswatini’s economic trajectory from 1980 to 2017 is characterized by a series of fluctuations and gradual growth in key indicators such as Gross Domestic Product (GDP), per capita income, inflation rates, government debt, and industrial production, reflecting the nation’s evolving economic landscape over nearly four decades. In 1980, the country’s GDP was approximately 0.90 billion US dollars when measured in Purchasing Power Parity (PPP), with a GDP per capita of 1,653 US dollars PPP. The nominal GDP at that time stood at 0.75 billion US dollars. Despite these figures, the economy experienced a contraction, evidenced by a real GDP growth rate of -3.8%, while inflation surged to 18.2%, indicating economic challenges including price instability and reduced economic output. By 1985, economic conditions showed improvement as GDP expanded to 1.50 billion US dollars PPP, accompanied by a rise in per capita income to 2,359 US dollars PPP. However, nominal GDP declined to 0.50 billion US dollars, suggesting currency valuation effects or other nominal adjustments. The real GDP growth rate rebounded to a positive 3.8%, signaling renewed economic activity. Inflation increased slightly from the 1980 level, though specific percentages were not documented, while government debt was recorded at 20.5% of GDP, reflecting fiscal pressures during this period. The upward trend continued into 1990, with GDP reaching 2.95 billion US dollars PPP and a per capita income of 3,793 US dollars PPP. Nominal GDP rose significantly to 1.24 billion US dollars. The real GDP growth rate was robust at 8.9%, indicating a period of strong economic expansion. Inflation moderated to 13.1%, a decline from previous years, and government debt decreased to 13.1% of GDP, suggesting improved fiscal management and economic stability. In the mid-1990s, Eswatini sustained its growth momentum. By 1995, GDP had increased to 3.84 billion US dollars PPP, with per capita income reaching 4,421 US dollars PPP. Nominal GDP nearly doubled from 1990 levels to 1.93 billion US dollars. The real GDP growth rate was a steady 4.0%, while government debt further declined to 12.3% of GDP, indicating a continued focus on fiscal prudence alongside economic development. The turn of the millennium saw a slight deceleration in growth. In 2000, GDP was recorded at 4.83 billion US dollars PPP, with per capita income at 5,033 US dollars PPP. Nominal GDP, however, decreased to 1.74 billion US dollars, which may reflect currency fluctuations or economic adjustments. The real GDP growth rate slowed to 2.6%, and government debt remained relatively stable at 12.2% of GDP, suggesting a period of moderate growth and fiscal steadiness. From 2005 through 2008, Eswatini experienced steady economic expansion. In 2005, GDP rose to 6.52 billion US dollars PPP, with per capita income increasing to 6,537 US dollars PPP, and nominal GDP reaching 3.18 billion US dollars. The real GDP growth rate was strong at 5.5%, while government debt dramatically decreased to 1.8% of GDP, highlighting significant fiscal consolidation. The following year, 2006, saw GDP climb further to 7.06 billion US dollars PPP, with per capita income at 7,000 US dollars PPP and nominal GDP at 3.29 billion US dollars. Real GDP growth remained robust at 5.2%, although government debt rose to 5.2% of GDP, indicating some fiscal expansion. In 2007, GDP continued its ascent to 7.54 billion US dollars PPP, with per capita income reaching 7,387 US dollars PPP and nominal GDP increasing to 3.47 billion US dollars. The real GDP growth rate moderated to 3.9%, while government debt climbed to 8.1% of GDP, reflecting increased borrowing or expenditure. The following year, 2008, GDP attained 7.90 billion US dollars PPP, with per capita income at 7,658 US dollars PPP and nominal GDP slightly declining to 3.30 billion US dollars. Economic growth slowed to 2.8%, and government debt rose further to 12.7% of GDP, possibly influenced by global economic conditions. The year 2009 marked a partial recovery with GDP reaching 8.32 billion US dollars PPP and per capita income at 7,978 US dollars PPP. Nominal GDP increased to 3.60 billion US dollars, and the real GDP growth rate rebounded to 4.5%. Government debt decreased significantly to 7.4% of GDP, indicating improved fiscal health. By 2010, GDP expanded to 8.72 billion US dollars PPP, with per capita income at 8,268 US dollars PPP and nominal GDP rising to 4.44 billion US dollars. Growth moderated to 3.5%, and government debt further decreased to 4.5% of GDP. In 2011, GDP was recorded at 9.07 billion US dollars PPP, with per capita income increasing to 8,502 US dollars PPP and nominal GDP at 4.83 billion US dollars. The real GDP growth rate slowed to 2.0%, while government debt increased to 6.1% of GDP, suggesting some fiscal pressures. The 2012 data showed GDP at 9.56 billion US dollars PPP, with per capita income at 8,853 US dollars PPP and nominal GDP at 4.89 billion US dollars. Economic growth improved to 3.5%, but government debt rose to 8.9% of GDP, indicating a cautious fiscal environment. In 2013, GDP reached 10.18 billion US dollars PPP, with per capita income of 9,317 US dollars PPP and nominal GDP declining slightly to 4.60 billion US dollars. The real GDP growth rate remained steady at 3.5%, while government debt decreased to 5.6% of GDP, reflecting improved fiscal discipline. The following year, 2014, GDP increased to 10.74 billion US dollars PPP, with per capita income at 9,712 US dollars PPP and nominal GDP at 4.43 billion US dollars. Growth was consistent at 3.6%, and government debt was stable at 5.7% of GDP. In 2015, GDP was 10.97 billion US dollars PPP, with per capita income at 9,807 US dollars PPP and nominal GDP declining to 4.06 billion US dollars. Economic growth slowed markedly to 1.0%, while government debt increased slightly to 5.0% of GDP. The 2016 figures showed GDP at 11.11 billion US dollars PPP, with per capita income virtually unchanged at 9,814 US dollars PPP and nominal GDP further decreasing to 3.82 billion US dollars. The real GDP growth rate stagnated at 0.0%, and government debt rose to 8.0% of GDP, indicating economic challenges and fiscal pressures. By 2017, GDP reached 11.34 billion US dollars PPP, with per capita income increasing marginally to 9,884 US dollars PPP and nominal GDP rebounding to 4.41 billion US dollars. Economic growth was minimal at 0.2%, while government debt surged significantly to 29% of GDP, representing a notable increase in fiscal liabilities. Household income or consumption distribution data from 2001 reveals significant income inequality within Eswatini. The lowest 10% of the population held only 1.6% of household income or consumption, whereas the highest 10% controlled a disproportionately large share of 40.7%, highlighting disparities in wealth distribution. Industrial production growth was modest, estimated at 1% in 2001, indicating limited expansion in the manufacturing and industrial sectors during that period. Electricity production in Eswatini demonstrated growth over the decade spanning 1998 to 2008. In 1998, electricity production was 420 gigawatt-hours (GWh), increasing to 470 GWh by 2008. Electricity consumption also rose, from 962.9 GWh in 2001 to 1,078 GWh in 1998, and further to 1,207 GWh in 2008, reflecting rising demand for electrical power. Despite this, electricity exports were non-existent in 1998, 2001, and 2009, indicating that Eswatini did not export electricity during these years. Conversely, electricity imports were substantial, with 687 GWh imported in 1998, 639 GWh in 2001, and increasing to 768 GWh in 2009. Approximately 60% of these imports originated from South Africa as of 2009, underscoring Eswatini’s reliance on its larger neighbor for energy supply. The national currency of Eswatini is the lilangeni, abbreviated as E, which is subdivided into 100 cents. The lilangeni has been pegged at par with the South African rand, reflecting close economic and monetary ties between the two countries. Exchange rates between the lilangeni and the US dollar have fluctuated over the years, illustrating variations in currency stability and external economic influences. Notable exchange rates include 7.3 emalangeni per US dollar in 2011, 7.32 in 2010, 8.42 in 2009, and 6.9398 in 2000. Earlier rates were 10.5407 in 2002, 8.6092 in 2001, 6.1087 in 1999, and 4.6032 in 1997, demonstrating periods of both appreciation and depreciation relative to the US dollar. These fluctuations reflect the broader economic conditions and monetary policies affecting Eswatini throughout this period.