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JANUARY 1999 SWAZILAND COUNTRY PROFILE |
Economic Overview: Small but perfectly formedBy Tom Nevin.A wise person remarked recently that the trouble with the world today is that it's going through an age of tiny commotions. It has no calamities to get its teeth into. No global wars, no financial depressions. It doesn't know how to deal with relative calm and so it looks for ways to exercise its natural belligerence; it squabbles and bickers to ease the boredom. So it is with Swaziland. The difference is that Swaziland's commotions have always been tiny and living a life of peace is second nature - it needs no troublesome distractions. The pocket-sized kingdom of Swaziland lies in the Lubombo mountains, a scenically spectacular region stretching across the northern and eastern reaches of South Africa's provinces of KwaZulu-Natal and Mpumalanga, and southern Mozambique. It is by far Africa's most tranquil nation. Many theories have been put forward why this should be, but the simple reason is that the people of Swaziland don't have anything to fight about. In third world terms they're well-off, they have a government whose first concern is the welfare of its people, and one that works (although its dual nature is perplexing to some and anathema to others who consider it unreasonable and unfair that Swaziland is not 100% western-style democratic and yet is the most stable and progressive), unemployment is low when compared to its neighbours and Swaziland's labour is more skilled, the land is generous with its yields to farmers and breath-taking in its scenery for tourists. Although land-locked, it is a stone's throw from Mozambique's port capital and only slightly further away from Durban and connected to both by road, rail and air and, size-for-size, its internal transport communications are superior to anything on the continent. Its water resources are so abundant that it sells its surplus to South Africa. Its industrial infrastructure and output, both current and potential, is little short of remarkable. Nearly three years ago, the then newly-appointed prime minister, Dr Sibusiso Dlamini, presented the Economic and Social Reform Agenda (ESRA) to parliament. It was a short to medium action plan aimed at kick-starting the economy while the longer-term National Development Strategy (NDS) was taking shape. At ESRA's core was a commitment to accelerate economic growth, a major component being the creation of a more investor-friendly operating environment to encourage the private sector to be the engine of growth. "Government recognised that it's primary role was to focus on providing an enabling environment," says Dr Dlamini. The creation last year of the Swaziland Investment Promotion Authority (SIPA) provides a one-stop advisory and facilitation centre for new and expanding investors. A new structure of fiscal incentives, together with an investment code, have been drafted but are being re-examined in the light of a recent regional comparative study undertaken by SIPA. Much of the good work achieved in attracting investment interest in Swaziland was undone in the red tape that followed. ESRA is putting that right, according to the Prime Minister. For instance, response time to work permit applications has been cut to "an acceptable" four weeks. "The Business and Trade Facilitation Bill has recently been drafted," says Dr Dlamini, "which streamlines trading licence processes." The drafting of the New Companies Bill has been completed and is currently with the government law office for review. One of the most important developments in the Swazi economy is the Public Service Management Programme (PSMP). Its main function is to streamline the bureaucracy whose wage bill consumes 45% of state income every year. The PSMP focuses on increasing efficiency and cost-effectiveness in the Civil Service, along with improved service delivery, through a full performance-related pay system. "If our public sector can achieve a significant improvement in the quality of its service delivery at the same time as securing a higher level of cost-effectiveness, it will be making a worthy contribution to improving the standard of welfare of the people," says Dr Dlamini. Swaziland's tourism sector will score handsomely with the creation of the trilateral Lubombo SDI (spatial development initiative) that will link eastern South Africa, southern Mozambique and Swaziland through a main corridor and series of development nodes aimed at boosting agriculture, industry and, to the greater extent, tourism. As it is, Swaziland's mountain scenery, its intriguing ethnicity and culture and its world-class resorts attract more than its fair share of visitors. Many of these came from SA for the casinos, but now South Africa's new gaming laws have generated a string of local casinos, some on Swaziland's border. Will that mean a sizeable dent in the number of punters to Swaziland? "The heyday of the casino portion may be behind us," says Sun International Swaziland's area general manager, Jo Kentqens. "But we have always been a destination casino. So it's not a matter of people waking up in the morning and saying 'let's go to the casino in Swaziland' as they used to. Our focus has changed a little. We now have a lot of international tourists and sportsmen and women coming in and we've increased our conference business. We're also on the bigger package tour routes for people coming from all over the world to visit southern Africa." Swaziland Railways, according to its mission statement, seeks to be the total transportation service of choice for the southern African community. Its achievement in container traffic growth suggests it's well on the way to getting there. Contributing to Swaziland Railway's success is the widening of its horizons into southern Africa and beyond. "We can despatch containers overland far beyond our borders," says the railways assistant marketing director Dumisani Gwebu. "We have container trains that start here and deliver cargo to Nairobi in K enya." The trains themselves will deliver cargo into Tanzania and from there it is transhipped onto different gauge rolling stock for onward passage as far north as Kampala in Uganda. However, in spite of an increase in container movements, total tonnages decreased somewhat in the 1996/97 year as the economy began its period of recovery. Total traffic moved decreased by 3.7% from 4.1m tonnes in 1995/96 to just under 4m tonnes in 1996/97. Financial performance for the year showed a surplus of E8.3m, some 29% lower when compared with the E11.7m realised the previous year. "The role of transport in promoting Swaziland's integration into regional development initiatives will become even more important in the next few years," according to economist Professor Gavin Maasdorp. "The SADC is moving towards free trade, and competition in the global economy is becoming keener as a result of trade liberalisation. Regional economic integration requires easy access to partner country markets, and Swaziland needs to develop super-efficient services in order to give it a competitive edge in the region." This, of course, is something Swaziland Railways already knew and feasibility studies are examining various options. Whatever they are, the private sector will play a big part. While major development corridors such as the one linking Gauteng in South Africa with the Mozambique port capital of Maputo will have a massive economic impact on those two countries, it poses a threat to the income Swaziland Railways derives from South Africa's transit traffic. One solution is the rehabilitation of the Swazi rail system between the South African town of Lo thair and the Swazi border town of Ngwenya, thus providing a sub-corridor to Maputo via Swaziland with tariffs attractive to South African exporters and importers moving goods through Maputo. Already up and running is a new passenger service between Durban and Maputo which transits through Swaziland, and is a foretaste of things to come for the Lubombo corridor. Copyright © IC Publications Limited 1999. All rights reserved. No part of this site may be reproduced or transmitted in any form by any means or used for any business purpose without the written consent of the publisher. Whilst every effort has been made to ensure that the information contained herein is as accurate as possible, the publisher cannot accept responsibility for any consequences arising from its use. |