The Swaziland economy continues to underperform, reflecting the impact of the global economic crisis. The impact of the crisis has been felt mostly in revenue transfers of the Southern African Customs Union (SACU) to Swaziland. Executive Directors welcomed Fiscal Adjustment Roadmap (FAR), which focused on restoring fiscal sustainability, improving competitiveness, and strengthening financial supervision. They noted that key challenges are restoring fiscal sustainability, addressing HIV/AIDS, reducing poverty, and creating employment. Directors emphasized the need for fiscal adjustment and budgetary reforms. Directors noted that the banking system remains in good health.

Abstract

The Swaziland economy continues to underperform, reflecting the impact of the global economic crisis. The impact of the crisis has been felt mostly in revenue transfers of the Southern African Customs Union (SACU) to Swaziland. Executive Directors welcomed Fiscal Adjustment Roadmap (FAR), which focused on restoring fiscal sustainability, improving competitiveness, and strengthening financial supervision. They noted that key challenges are restoring fiscal sustainability, addressing HIV/AIDS, reducing poverty, and creating employment. Directors emphasized the need for fiscal adjustment and budgetary reforms. Directors noted that the banking system remains in good health.

I. Relation With The Fund

(As of November 30, 2010)

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

II. General Resources Account:

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III. SDR Department:

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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):

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VII. Implementation of HIPC Initiative: Not applicable

VIII. Implementation of Multilateral Debt Relief Initiative: Not applicable

IX. Exchange Rate Arrangement

The lilangeni (plural: emalangeni) is pegged at parity to the South African rand, which—alongside 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 December 31, 2009 was E1 = US$0.13981. Swaziland maintains an exchange restriction subject to approval under Article VIII arising from a 33.33 percent limit for advance payments for the import of certain capital goods.

X. Article IV Consultation

The last Article IV consultation was concluded on February 22, 2010. In concluding the consultation, In view of Swaziland’ s rapidly deteriorating fiscal position, Executive Directors stressed the need for urgent fiscal consolidation along with structural reforms in key areas to help achieve fiscal sustainability over the medium term, boost economic growth, and preserve external stability.

XI. Technical Assistance, 2000–10

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Ministry of Finance.

Central Bank of Swaziland.

Central Statistical Office.

II. Swaziland: Bank-Fund Joint Management Action Plan

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III. Swaiziland: Statistical Issues Appendix

(As of December 16, 2010)

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IV. Swizialand: Table OF Common Indicators Required For Surveillance

(As Of December 20, 2010)

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Any reserve assets that are pledged of otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means, as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

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

Foreign, domestic bank, and domestic nonbank financing.

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

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-a-vis nonresidents.

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

V. Swaiziland: Social And Demographic Indicators

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Sources: International Financial Statistics; World Bank, World Development Indicators, April 2009, UNAIDS, 2006, 2006 Report on the Global Aids Epidemic; and national authorities. Data refer to 2006, unless otherwise indicated.
Kingdom of Swaziland: 2010 Article IV Consultation—Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Swaziland
Author: International Monetary Fund