Swaziland - Swaziland has the worst-performing economy in sub-Saharan Africa, and if not for Sudan would have the world’s worst economic track record, according to new data from the International Monetary Fund (IMF).
The IMF projections for through 2017 show Swaziland will be untouched by rising global prosperity and is set to sink further into poverty.
“One way or the other, South Africa will pick up part or all of the cost when the imminent failed state of Swaziland collapses into final financial destitution, as forecast by all reasonable and neutral economic prognosticators,” said Charles Maphanga, a Mpumalanga-based financial consultant who advises Swazis where to convert their savings in lilangeni, the Swaziland currency, into South African rand-based investments.
Indeed, gross domestic savings as percentage of GDP will be halved from this year’s 10.6 percent to 5.6 percent in 2013. Swaziland’s 2012 GDP of $12.85 billion (R112bn), which was down 3 percent from last year when it stood at $13.23bn, is expected to drop again, to US $12.72bn, in 2013, for a GDP growth rate of negative 0.09 percent.
With a worsening economy and less cash on hand in savings, slackening consumer demand will reduce inflation from 7.8 percent in 2012 to 6.8 percent in 2013.
Lower inflation and marginally better GDP growth, compared to Sudan, for now spares Swaziland from having the world’s worst economy. However, those advantages will have disappeared by 2014.
With FDI flat-lining in the country, industries shutting and remaining businesses struggling, government revenues are expected to drop from 40 percent of GDP in 2012 to 32 percent of GDP in 2017.
King Mswati’s government has refused to implement its own fiscal recovery act, based on IMF advice, which calls for a drastic cut in government spending and a reduction in the number of civil servant jobs, the highest per capita in Africa.
However, Johannes Mongardini, the head of the IMF team that visited the country last month, said public sector jobs need not be sacrificed if less money was spent on the police and army and “very generous” payouts to top government officials.
Mongardini said the IMF expected the royal family also to take cutbacks. The IMF urged government spending policy to be directed toward pro-poor and economy-building initiatives.
Swaziland’s Finance Minister Majozi Sithole, an appointee of King Mswati, responded with a blistering broadside against the IMF’s projections last month, calling them “pessimistic”.