Economic Growth
Economic growth in Swaziland has lagged behind that of its neighbors. Real GDP growth since 2001 has averaged 2.8 percent, nearly 2 percentage points lower than growth in other Southern African Customs Union (SACU) member countries. Low agricultural productivity in the SNLs, repeated droughts, the devastating effect of HIV/AIDS and an overly large and inefficient government sector are likely contributing factors. Swaziland’s public finances deteriorated in the late 1990s following sizable surpluses a decade earlier. A combination of declining revenues and increased spending led to significant budget deficits. The considerable spending did not lead to more growth and did not benefit the poor. Much of the increased spending has gone to current expenditures related to wages, transfers, and subsidies. The wage bill today constitutes over 15 percent of GDP and 55 percent of total public spending; these are some of the highest levels on the African continent. The recent rapid growth in SACU revenues has, however, reversed the fiscal situation, and a sizable surplus was recorded since 2006. SACU revenues today account for over 60 percent of total government revenues. On the positive side, the external debt burden has declined markedly over the last 20 years, and domestic debt is almost negligible; external debt as a percent of GDP was less than 20 percent in 2006
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