The Kingdom of Swaziland: 2008 Article IV Consultation-Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director

International Monetary Fund

doi:10.5089/9781451836165.002.A002

The Kingdom of Swaziland

2008 Article IV Consultation-Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director

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International Monetary Fund

International Monetary Fund
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Publication Date:: 03 Nov 2008

eISBN:: 9781451836165

ISBN:: 9781451836165

Language:: English

Keywords:: ISCR; CR; government; Swazi authorities; current account; Swaziland; government priority; regime of the Common Monetary Authority; authorities' effort; broad money; banking soundness indicator; money market; HIV and AIDS; Government finance statistics; Africa; Southern Africa; Global; bank supervision; bank request; fund work program; fund request; bank institution; Balance of payments statistics; Consumer price indexes; Monetary statistics

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INTERNATIONAL MONETARY FUND

Abstract

INTERNATIONAL MONETARY FUND

Title Page

INTERNATIONAL MONETARY FUND

KINGDOM OF SWAZILAND

Staff Report for the 2008 Article IV Consultation—Informational Annex

Prepared by the staff representatives for the 2008 Consultation with the Kingdom of Swaziland

Approved by Anne-Marie Gulde-Wolf and Anthony Boote

October 1, 2008

I. Relations with the Fund. Describes financial and technical assistance by the IMF and provides information on the exchange rate system.
II. The JMAP Bank-Fund. Describes the priorities and main activities of the World Bank Group and the IMF, and areas of cooperation in their work with the authorities of Swaziland.
III. Statistical Issues. Assesses the quality of statistical data. Weaknesses in several categories of economic statistics are hampering analyses of economic developments.
IV. Social and Demographic Indicators.

I. Swaziland: Relations with the Fund
II. Swaziland: The Joint Management Action Plan Bank-Fund
III. Swaziland: Statistical Issues
IV. Swaziland: Social and Demographic Indicators

I. Swaziland: Relations with the Fund

(As of August 31, 2008)

I. Membership Status: Joined September 22, 1969; Accepted the obligations of Article VIII, sections 2, 3 & 4: December 11, 1989.

II. General Resources Account:

III. SDR Department:

IV. Outstanding Purchases and Loans: None

V. Financial Arrangements: None

VI. Projected Payments to the Fund:

(SDR Million; based on existing use of resources and present holdings of SDRs):

VII. Implementation of HIPC Initiative: Not applicable

VIII. Exchange Rate Arrangement

The Lilangeni (plural: Emalangeni) continues to be pegged at parity to the South African rand, which—alongside with the Lilangeni—is also legal tender. The intervention currency is the U.S. dollar; exchange rates for the U.S. dollar are based on the floating middle rate of the South African rand against the U.S. dollar. The rate on August 31, 2008 was E1 = US$0.1301185

Swaziland has accepted the obligations of Article VIII, Sections 2–4; it maintains two exchange restrictions arising from limits on the provision of foreign exchange for advance payments for imports: (i) an overall limit of E 250,000, and (ii) a 33.33 percent limit for the import of certain capital goods. The Swazi lilangeni is pegged at par with the South African rand, which is also legal tender.

IX. Article IV Consultation

Swaziland is on the standard 12-month cycle. The last Article IV consultation discussions were held in Mbabane in November 2007. The staff report (IMF Country Report No. 08/85, March 2008) was considered by the Executive Board on January 23, 2008.

X. Technical Assistance

II. Swaziland: The Joint Management Action Plan Bank-Fund

(As of September 9, 2008)

	Product	Provisional Timing of missions	Expected Delivery date
A. Mutual information on relevant work programs
The World Bank work program in the next 12 months	Local Government Project HIV/AIDS project Post-Basic Education and Training Sector Study Civil Service Pension Reform TA Investment Climate Assessment Follow-up TA Fiduciary Assessment Institutional Assessment of PFM/GAC ESW Debt management TA Strengthening PEM—IDF grant (on-going) Disaster Risk Reduction and Recovery (focus on agriculture sector growth)-TA		Q3 of FY09 Q3–Q4 of FY09 July 2008 Q4 of FY09 Q4 of FY09 Q4 of FY09 FY09 FY09 FY10 FY09
The Fund work program in the next 12 months	AFR: 2008 Article IV Consultation [including Financial Sector Strategy Note] Selected Issues Paper—The role of Non-Bank Institutions in SACU countries Technical assistance: FY2008/09 Financial sector * Supervision of insurance and retirement fund * Bank and non-bank supervision * Multi sector mission Statistics * Government finance statistics * Multi sector mission—financial, national accounts, GFS and BOP	July 23–August 5 2008 October 2008 4 missions 1 mission 1 mission July 2008 1 mission	Board meeting plan for October 2008 As part of the 2008 Article IV Staff report
B. Requests for work program inputs (as needed)
Fund request to Bank	Growth diagnostic and assessment of competitiveness Governance and PEM Assisting the authorities with food strategy and scaling up agricultural yield.
Bank request to Fund	Periodic macro updates Possibly collaboration in responding to increasing food prices/food security
C. Agreements on joint products and missions
Joint products in next 12 months	Bank staff participated in the 2008 Article IV Consultation mission.	July, 2008

	Product	Provisional Timing of missions	Expected Delivery date
A. Mutual information on relevant work programs
The World Bank work program in the next 12 months	Local Government Project HIV/AIDS project Post-Basic Education and Training Sector Study Civil Service Pension Reform TA Investment Climate Assessment Follow-up TA Fiduciary Assessment Institutional Assessment of PFM/GAC ESW Debt management TA Strengthening PEM—IDF grant (on-going) Disaster Risk Reduction and Recovery (focus on agriculture sector growth)-TA		Q3 of FY09 Q3–Q4 of FY09 July 2008 Q4 of FY09 Q4 of FY09 Q4 of FY09 FY09 FY09 FY10 FY09
The Fund work program in the next 12 months	AFR: 2008 Article IV Consultation [including Financial Sector Strategy Note] Selected Issues Paper—The role of Non-Bank Institutions in SACU countries Technical assistance: FY2008/09 Financial sector * Supervision of insurance and retirement fund * Bank and non-bank supervision * Multi sector mission Statistics * Government finance statistics * Multi sector mission—financial, national accounts, GFS and BOP	July 23–August 5 2008 October 2008 4 missions 1 mission 1 mission July 2008 1 mission	Board meeting plan for October 2008 As part of the 2008 Article IV Staff report
B. Requests for work program inputs (as needed)
Fund request to Bank	Growth diagnostic and assessment of competitiveness Governance and PEM Assisting the authorities with food strategy and scaling up agricultural yield.
Bank request to Fund	Periodic macro updates Possibly collaboration in responding to increasing food prices/food security
C. Agreements on joint products and missions
Joint products in next 12 months	Bank staff participated in the 2008 Article IV Consultation mission.	July, 2008

III. Swaziland: Statistical Issues

Data provision has some shortcomings, but is broadly adequate for surveillance. Staff’s analysis was affected by shortcomings in certain areas, including the national accounts and the external sector. The authorities provide available data to the Fund with a lag of one to two months, except for the national accounts and international trade data, which are reported irregularly.

GDDS metadata were posted on the Fund’s Dissemination Standards Bulletin Board on February 11, 2003. The metadata for all sectors—except the financial sector—were updated in October 2005, subsequently the financial sector metadata were updated in October 2007. Swaziland has undertaken to use the GDDS as a framework for the development of its national statistical system and participates in the GDDS Project for Anglophone African Countries. Under this project (funded by the U.K. Department for International Development (DFID)), the country participates in the national accounts and the monetary and financial statistics modules with the Fund, and in the labor statistics and agricultural statistics with the World Bank. Swaziland’s Central Statistical Office has a webpage (http://www.gov.sz/home.asp?pid=75) that needs updating.

Real sector statistics

STA GDDS missions have resulted in significant improvements in the national accounts. Current and constant price (base=2000) GDP estimates are now available from both the production and expenditure approaches. These new estimates have not yet been published, as there are still some shortcomings concerning the treatment of Southern African Customs Union revenue. For national accounts data, AFR missions rely on estimates provided by the Central Statistical Office (CSO). The authorities are planning the first labor force survey with support from the World Bank/GDDS project.

Price statistics

The consumer price index was significantly revised in May 2007 with technical assistance provided in the context of the GDDS initiative. The dissemination of the new consumer price index is a significant milestone for the CSO. Four new geographical indices, as well as a national index, with updated market basket weights, are now available. These new consumer price indices incorporate improvements in compilation methodology, market basket coverage, flexibility for introducing new pricing outlets and new varieties of products, and enhanced processing capabilities. Monthly consumer price data are published by the CSO with a one-month lag. For International Financial Statistics (IFS) purposes, the consumer price index is reported at the national level for the all-income group.

Government finance statistics

Fiscal data are provided to AFR staff only during missions and/or following budget announcements. The Central Bank of Swaziland (CBS) reports fiscal data on central government operations to STA for publication in IFS and the GFS Yearbook on an irregular basis and with significant lags—the latest data are for 2003. Data on transactions in financial assets and liabilities are not reported. A June 2003 mission reviewed government finance statistics (GFS) compilation and introduced the GFSM 2001 framework. An October 2003 mission made recommendations to improve the coverage, classification and consistency of fiscal statistics. A June GFS 2004 mission further developed the bridge tables and derivation tables used to compile GFS, assisted in the reconciliation of the fiscal and monetary accounts, and made recommendations concerning these topics, as well as the extra budgetary accounts, the Ministry of Finance Economic Classification Spreadsheet, budget classification, and data dissemination. A mission in July 2008 found that resources assigned to GFS are extremely limited and that differences in institutional coverage largely explain the large discrepancies between operations and financing data. The mission recommended the elaboration of standardized GFS reports directly from the accounting system.

Monetary and financial statistics

The CBS uses the standardized forms to report monthly monetary and financial statistics to STA, and data are reported on a timely basis. The 2006 MFS mission noted that substantial improvements were achieved, particularly in the data for the CBS. The mission found that, some progress had been made in the reporting of data on the other depository corporations (ODCs), but quality problems remained. The majority of the ODCs reported various degrees of difficulty in providing accurate data to the CBS. The mission recommended that the CBS arrange regular meetings with the ODCs to promote improved classification and sectorization. The CBS started to include the Swaziland Building Society into the monetary data backdated to December 2006. However, the credit and savings cooperatives, representing about 8 percent of the deposits of the commercial banks, are still outside the deposit corporations’ survey. A recent MFS mission discussed the proper treatment of pension funds and insurance companies in the financial survey.

Balance of payments statistics

The CSO publishes data on foreign trade on a quarterly basis, but the lack of sufficient computer resources results in long lags in the production of trade data, especially regarding imports. AFR missions use trade data provided by the CBS. The CBS publishes balance of payments statistics on a semiannual and annual basis. It now adheres to a methodology consistent with the fifth edition of the Balance of Payments Manual. Shortcomings in the timeliness and availability of data need to be addressed.

Swaziland: Table of Common Indicators Required for Surveillance

(As of September 16, 2008)

^¹Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

^²Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

^³Foreign, domestic bank, and domestic nonbank financing.

⁴ The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

^⁵Including currency and maturity composition.

^⁶Includes external gross financial asset and liability positions vis-à-vis nonresidents.

^⁷Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A), irregular (I); and not available (NA).

Swaziland: Table of Common Indicators Required for Surveillance

(As of September 16, 2008)

	Date of latest observation	Date received	Frequency of Data^⁷	Frequency of Reporting^⁷	Frequency of Publication ^⁷
Exchange Rates	Aug 08	Sept 08	M	D	D
International Reserve Assets and Reserve Liabilities of the Monetary Authorities^¹	Dec 07	May 08	M	M	M
Reserve/Base Money	Jul 08	Sept 08	M	M	M
Broad Money	Jul 08	Sept 08	M	M	M
Central Bank Balance Sheet	Jul 08	Sept 08	M	M	M
Consolidated Balance Sheet of the Banking System	Jul 08	Sept 08	M	M	M
Interest Rates^²	Jul 08	Aug 08	M	M	D
Consumer Price Index	Jul 08	Aug 08	M	M	M
Revenue, Expenditure, Balance and Composition of Financing^³—Central Government	2007	Jun 08	A	A	A
Stocks of Central Government and Central Government-Guaranteed Debt^⁵	2007	Jun 08	A	A	A
External Current Account Balance	2007	Jun 08	A	A	A
Exports and Imports of Goods and Services	2007	Jun 08	Q	A	A
GDP/GNP	2007	Jun 08	A	A ^{^2/} ^{^3/}	A
Gross External Debt	2007	Jun 08	A	A	A
International Investment Position^⁶	2006	Oct 07

^¹Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

^²Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

^³Foreign, domestic bank, and domestic nonbank financing.

⁴ The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

^⁵Including currency and maturity composition.

^⁶Includes external gross financial asset and liability positions vis-à-vis nonresidents.

^⁷Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A), irregular (I); and not available (NA).

Swaziland: Table of Common Indicators Required for Surveillance

(As of September 16, 2008)

	Date of latest observation	Date received	Frequency of Data^⁷	Frequency of Reporting^⁷	Frequency of Publication ^⁷
Exchange Rates	Aug 08	Sept 08	M	D	D
International Reserve Assets and Reserve Liabilities of the Monetary Authorities^¹	Dec 07	May 08	M	M	M
Reserve/Base Money	Jul 08	Sept 08	M	M	M
Broad Money	Jul 08	Sept 08	M	M	M
Central Bank Balance Sheet	Jul 08	Sept 08	M	M	M
Consolidated Balance Sheet of the Banking System	Jul 08	Sept 08	M	M	M
Interest Rates^²	Jul 08	Aug 08	M	M	D
Consumer Price Index	Jul 08	Aug 08	M	M	M
Revenue, Expenditure, Balance and Composition of Financing^³—Central Government	2007	Jun 08	A	A	A
Stocks of Central Government and Central Government-Guaranteed Debt^⁵	2007	Jun 08	A	A	A
External Current Account Balance	2007	Jun 08	A	A	A
Exports and Imports of Goods and Services	2007	Jun 08	Q	A	A
GDP/GNP	2007	Jun 08	A	A ^{^2/} ^{^3/}	A
Gross External Debt	2007	Jun 08	A	A	A
International Investment Position^⁶	2006	Oct 07

^¹Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

^²Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

^³Foreign, domestic bank, and domestic nonbank financing.

⁴ The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

^⁵Including currency and maturity composition.

^⁶Includes external gross financial asset and liability positions vis-à-vis nonresidents.

^⁷Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A), irregular (I); and not available (NA).

IV. Swaziland: Social and Demographic Indicators

Sources: International Financial Statistics; World Bank, World Development Indicators, April 2006, UNAIDS, 2006, 2006 Report on the Global Aids Epidemic; and national authorities. Data refer to 2006, unless otherwise indicated.

Swaziland: Tentative Work Program

Discussions for the 2009 Article IV consultation July 23–August 5, 2009

Board meeting on the 2009 Article IV consultation October 16, 2009

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The Kingdom of Swaziland: 2008 Article IV Consultation-Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director

Author:

International Monetary Fund

Volume/Issue:: Volume 2008: Issue 356

Publisher:: International Monetary Fund

ISBN:: 9781451836165

ISSN:: 1934-7685

Pages:: 52

DOI:: https://doi.org/10.5089/9781451836165.002

Keywords
Title Page
Contents
I. Swaziland: Relations with the Fund
II. Swaziland: The Joint Management Action Plan Bank-Fund
III. Swaziland: Statistical Issues
IV. Swaziland: Social and Demographic Indicators
- Swaziland: Tentative Work Program

	SDR Million	% Quota
Quota	50.70	100.0
Fund holdings of currency	44.15	87.1
Reserve position in Fund	6.56	12.9

	SDR Million	% Quota
Quota	50.70	100.0
Fund holdings of currency	44.15	87.1
Reserve position in Fund	6.56	12.9

	SDR Million	% Allocation
Net cumulative allocation	6.43	100.0
Holdings	2.55	39.6

	SDR Million	% Allocation
Net cumulative allocation	6.43	100.0
Holdings	2.55	39.6

	2008	2009	2010	2011
	Forthcoming
Principal
Charges/Interest	0.03	0.12	0.12	0.12
Total	0.03	0.12	0.12	0.12

Area (sq. km.)		17,364	Population Density (per sq. km)	65.47
Population		1.1 million
Population			Health
Population growth rate		1.7	Population per physician (2000)	5,675
Life expectancy at birth (2005)		41.5 yrs	Public health expenditure (2004,	4.02
Infant mortality rate (per thousand)		110	(percent of GDP)
Urban Population (% total)		24.38	HIV prevalence rate (ages 15-49)	25.9
Population younger than 15		.
	(percent of total population)
GDP per capita (US dollars)		2,312	Education
Access to safe water (2004)			Adult literacy rate (2002, percent)	80.9
Percent of total population		62	Primary school enrollment	80
	Urban	87	(2005, net, percent)
	Rural	54	Poverty Indicators (2001)
Labor Statistics (thousands)
			Share of income, lowest 20 percent	4.34
Labor Force		338	(percent)
			GINI Index	50.4
Formal Employment (2005)		92
	Private Sector	65
	Public Sector	28

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Title Page

Contents

I. Swaziland: Relations with the Fund

II. Swaziland: The Joint Management Action Plan Bank-Fund

III. Swaziland: Statistical Issues

Real sector statistics

Price statistics

Government finance statistics

Monetary and financial statistics

Balance of payments statistics

IV. Swaziland: Social and Demographic Indicators

Swaziland: Tentative Work Program

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