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Swaziland: Economic decline as investors spurn kingdom

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8 April 2007

MBABANE, 6 April 2007 (IRIN) - Lack of natural resources is a major factor responsible for Swaziland's continuing low economic performance, according to a United Nations Development Programme report released this week.

Ranking African nations on the basis of their economic growth, the study found oil-rich Mauritania the regional leader with 19.4 percent growth, followed by mineral-rich Angola performing at an enviable 17.6 percent.

Swaziland's growth of about 2 percent comes at a time when a once-thriving mining sector has dwindled to just two activities: a small, opencast quarry stone operation in the central Manzini region that is used to excavate gravel for local road construction, and a coal mine in the eastern Lubombo region.

The coal, which is all shipped to South Africa, is the only mineral resource exported today from a country that once produced gold, tin, iron ore and until the 1990s diamonds.

Comoros, Ivory Coast and the Seychelles join Swaziland at the bottom of the economic performance study, while crisis-wracked Zimbabwe, once a haven of stability, is ranked as the worst performer.

An economist attached to the local branch of a South African bank commented; 'Swaziland's problem is not a lack of natural resources, but an inability to attract foreign direct investment, which creates a cycle of unemployment where job skills can never be mastered.'

He said that the growth of a skilled workforce is hobbled by a lack of opportunities for employment, which consequently limits on the job training and skills development. As a result, only industries like garments and textiles have located in Swaziland, because they require untrained or minimally-trained workers.

'Natural resources can be exhausted, and while they can be good in the short term, creating wealth in say Botswana with that country's diamonds, world commodity prices and supply demands can make this a precarious basis for a national economy,' he said.

Swaziland is a land-locked country highly dependent on neighbouring South Africa, with 80 percent of its people engaged in subsistence agriculture on crown-owned land. Overgrazing, soil depletion and successive years of drought have left around a quarter of the population dependent on food aid since 2002.

HIV/AIDS has had a devastating humanitarian and economic impact. The country has the world's worst prevalence rate, with roughly 40 percent of Swazi adults HIV positive.

Rising agitation around political reform, in what is sub-Saharan Africa's last absolute monarchy, has also had an impact on investments.

As an inducement to foreign investors, the Swaziland Attorney General's Office this week released a draft Employment Bill 2007 that seeks to guard workers rights while making the country attractive to new businesses.

Commissioner of Labour Jinnoh Nkambule offered a glimpse of the bill's philosophy when he told a press conference, 'In the highly globalised world we live in, employers cannot sustain production if the labour factor is too costly and is not compensating through commensurate productivity levels.'

Copyright © IRIN 2007

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