MBABANE – Economic mismanagement and inappropriate government spending priorities have made Eswatini Africa’s poorest performing economy.
Formerly known as Swaziland, Eswatini had its 2018 GDP growth slashed by the Central Bank to 1.5%, down from 1.9% in 2017. “Growth in the short to medium term is expected to remain passive, although positive, as the fiscal situation is not expected to improve,” said the Central Bank in a statement.
The poorly performing economy is causing social unrest. Government suppliers have not been paid for months, causing a cash flow crisis in the private sector, including transportation businesses, which in the country’s small economy rely on government contracts. With foreign direct investment flat, corruption ingrained, and no economic stimulus under consideration by government, the fundamentals are not propitious for improvement. A decline in manufacturing means that this sector will contribute a negative -0.01 to GDP growth.
The country’s only mineral export, coal, which is moved by rail, has seen production decline this past year. A ban on Swazi beef put in place by the European Union in September 2017 has reduced meat exports. However, good rains this year have translated into 5.7% growth in agricultural production. Swazi transporters have less business this year.
“The transportation sub-sector, which has direct links with activity under manufacturing, mining, construction and agriculture will slow down due to poor performance of these sectors, particularly due to weak manufacturing and mining activity,” reported the Central Bank.
