Abstract
KEY ISSUESSetting: Swaziland has gradually recovered from the fiscal crisis of 2010-11, buoyed by the improved revenues from the Southern African Customs Union (SACU). Growth modestly recovered, and international reserves rebounded. Swaziland’s challenges, however, remain significant, in view of its high vulnerability to exogenous shocks and its sluggish growth performance, while facing significant social and development challenges with high unemployment and the prevalence of HIV/AIDS. Swaziland now stands at a critical juncture to strengthen its resilience to exogenous shocks, address its weak growth performance, and meet critical social and development needs.Outlook and risks: Under the status-quo policies, the outlook is for continued sluggish growth and increasing fiscal and external imbalances, reflecting low private investment, elevated government spending, and prospective decline in SACU revenues. Risks are associated with the high volatility of the SACU revenues, possible negative spillovers from South Africa (including higher policy rate and lower growth), and uncertain prospects for preferential trade agreements with the U.S. and EU.Strengthening Resilience to Shocks: Over the medium term, international reserves should be targeted at five to seven months of imports, and public debt be kept below 30 percent of GDP. This calls for a prudent fiscal policy stance, with fiscal deficit below 2 percent of GDP.Raising growth: It is essential to enhance the efficiency of the public sector and promote private sector-led growth through structural reforms including improving business climate and accelerating land reforms.Maintaining financial stability: Financial soundness indicators are generally strong. The strong growth of the nonbank financial sector in recent years calls for strengthening of supervision and regulation for the sector.Past advice: There is broad agreement between the Fund and the authorities on macroeconomic policy and structural reform priorities. With the authorities’ fiscal consolidation efforts and the improved SACU revenues, fiscal and external sustainability is being restored, consistent with staff’s advice. However, progress on structural reforms—including re-launching the privatization process, improving access to modernfinance and improving the business climate—has been modest.
Relations with the Fund
As of May 31, 2014
Membership Status
Joined: September 22, 1969; Article VIII
General Resources Account:
| SDR Million | % Quota | |
| Quota | 50.70 | 100.00 |
| Fund holdings of currency | 44.15 | 87.07 |
| Reserve position | 6.56 | 12.94 |
| SDR Million | % Quota | |
| Quota | 50.70 | 100.00 |
| Fund holdings of currency | 44.15 | 87.07 |
| Reserve position | 6.56 | 12.94 |
SDR Department:
| SDR Million | % Allocation | |
| Net cumulative allocation | 48.28 | 100.00 |
| Holdings | 48.74 | 100.93 |
| SDR Million | % Allocation | |
| Net cumulative allocation | 48.28 | 100.00 |
| Holdings | 48.74 | 100.93 |
Outstanding Purchases and Loans: None
Latest Financial Arrangements: None
Projected Payments to Fund 1
(SDR million; based on existing use of resources and present holdings of SDRs):
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2014 | 2015 | 2016 | 2017 | 2018 | |
| Principal | |||||
| Charges/Interest | 0.00 | 0.00 | 0.00 | 0.00 | |
| Total | 0.00 | 0.00 | 0.00 | 0.00 | |
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2014 | 2015 | 2016 | 2017 | 2018 | |
| Principal | |||||
| Charges/Interest | 0.00 | 0.00 | 0.00 | 0.00 | |
| Total | 0.00 | 0.00 | 0.00 | 0.00 | |
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.
Implementation of HIPC Initiative: Not Applicable
Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable
Implementation of Post-Catastrophe Debt Relief (PCDR): Not Applicable
Exchange Rate Arrangements
The lilangeni (plural: emalangeni) is pegged at parity to the South African rand, which 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 May 28, 2014 was E1 = US$0.095. Swaziland maintains an exchange restriction subject to Fund approval under Article VIII arising from a 50 percent limit on the provision for advance payments for the import of capital goods in excess of 10 million emalangeni.
Article IV Consultation
The last Article IV Consultation was concluded on February 8, 2013. Swaziland is on the standard 12 month Article IV Consultation cycle.
Technical assistance (2011-present)
Ministry of Finance.
Swaziland Revenue Authority.
Financial Sector Regulatory Authority
Savings and credit cooperatives
| Department | Purpose | Date of delivery | Beneficiary Agency |
|---|---|---|---|
| FAD | Organization Ministry of Finance | February 2011 | MoF1 |
| PFM Act | May 2012 | MoF | |
| August 2012 | |||
| October 2012 | |||
| January 2014 | |||
| MTFF/Budget | March 2013 | MoF | |
| May 2013 | |||
| July 2013 | |||
| August 2013 | |||
| December 2013 | |||
| January 2014 | |||
| TPA TTF | December 2011 | MoF | |
| April 2012 | |||
| May 2013 | |||
| February 2014 | |||
| Chart of accounts | June 2013 | MoF | |
| August 2013 | |||
| January 2014 | |||
| Customs revenue administration | October 2012 | SRA2 | |
| Tax Administration | July 2012 | SRA | |
| October 2012 | |||
| August 2013 | |||
| December 2013 | |||
| MCM | Insurance supervision | January 2011 | FSRA3 |
| March 2011 | |||
| November 2011 | |||
| August 2012 | |||
| August 2013 | |||
| MCM | Insurance supervision | October 2013 | |
| May 2014 | |||
| Risk based supervision | November 2013 | CBS | |
| Capital market supervision | June 2013 | FSRA | |
| August 2013 | |||
| December 2013 | |||
| April 2014 | |||
| SACCOs4 Supervision | May 2012 | FSRA | |
| August 2013 | |||
| January 2014 | |||
| May 2014 | |||
| Supervision non-banks | November 2011 | CBS | |
| March 2012 | |||
| Compliance with Basel | April 2013 | CBS | |
| May 2013 | |||
| STA | Monetary and Financial statistics | September 2013 | CBS |
| Financial Soundness Indicators | March 2014 | CBS | |
| National Accounts Statistics | January 2012 | CSO | |
| August 2012 | |||
| October 2012 | |||
| December 2013 | |||
| April 2014 |
Ministry of Finance.
Swaziland Revenue Authority.
Financial Sector Regulatory Authority
Savings and credit cooperatives
| Department | Purpose | Date of delivery | Beneficiary Agency |
|---|---|---|---|
| FAD | Organization Ministry of Finance | February 2011 | MoF1 |
| PFM Act | May 2012 | MoF | |
| August 2012 | |||
| October 2012 | |||
| January 2014 | |||
| MTFF/Budget | March 2013 | MoF | |
| May 2013 | |||
| July 2013 | |||
| August 2013 | |||
| December 2013 | |||
| January 2014 | |||
| TPA TTF | December 2011 | MoF | |
| April 2012 | |||
| May 2013 | |||
| February 2014 | |||
| Chart of accounts | June 2013 | MoF | |
| August 2013 | |||
| January 2014 | |||
| Customs revenue administration | October 2012 | SRA2 | |
| Tax Administration | July 2012 | SRA | |
| October 2012 | |||
| August 2013 | |||
| December 2013 | |||
| MCM | Insurance supervision | January 2011 | FSRA3 |
| March 2011 | |||
| November 2011 | |||
| August 2012 | |||
| August 2013 | |||
| MCM | Insurance supervision | October 2013 | |
| May 2014 | |||
| Risk based supervision | November 2013 | CBS | |
| Capital market supervision | June 2013 | FSRA | |
| August 2013 | |||
| December 2013 | |||
| April 2014 | |||
| SACCOs4 Supervision | May 2012 | FSRA | |
| August 2013 | |||
| January 2014 | |||
| May 2014 | |||
| Supervision non-banks | November 2011 | CBS | |
| March 2012 | |||
| Compliance with Basel | April 2013 | CBS | |
| May 2013 | |||
| STA | Monetary and Financial statistics | September 2013 | CBS |
| Financial Soundness Indicators | March 2014 | CBS | |
| National Accounts Statistics | January 2012 | CSO | |
| August 2012 | |||
| October 2012 | |||
| December 2013 | |||
| April 2014 |
Ministry of Finance.
Swaziland Revenue Authority.
Financial Sector Regulatory Authority
Savings and credit cooperatives
Bank-Fund Joint Management Action Plan
Dates are tentative. Years are calendar years
| Title | Products | Mission Date 1 | Delivery Date 1 |
|---|---|---|---|
| The World Bank work program for the next 12 months | Customs Modernization | October 2014 | November 2014 |
| Private Sector Competitiveness | July, October 2014 | June 2014 | |
| February, May 2015 | |||
| Financial Sector Development | July, November 2014 | August 2015 | |
| April 2015 | |||
| Skills development for agribusiness | May 2014 | September 2015 | |
| Internal Audit | May 2014 | June 2015 | |
| Public Service Payroll Audit | June 2014 | June 2014 | |
| Growth Report | July 2014 | July 2014 | |
| Country Partnership Strategy | May 2014 | September 2014 | |
| HIV/AIDS and TB | October 2014 | April 2015 | |
| March 2015 | |||
| PFM Reform | TBD | TBD | |
| Public Sector Modernization | TBD | TBD | |
| The Fund work program for the next 12 months | 2014 Article IV Consultation | May 2014 | July 2014 |
| Technical Assistance | |||
| Multiple missions in mid-2014 | Ongoing | |
| Multiple missions in 2014 | Ongoing | ||
| Multiple mission in late 2014 | Ongoing | ||
| Multiple missions in 2014 | Ongoing | ||
| Fund request to Bank | Periodic updates on the work related to business climate; financial sector development; and fiscal developments and reforms. | Ongoing | |
| Bank request to Fund | Periodic macro updates | Ongoing | |
| Joint products in next 12 months | Fiscal rules to manage volatility of SACU revenues Technical assistances for a financial sector strategy | September 2014 2015 | |
Dates are tentative. Years are calendar years
| Title | Products | Mission Date 1 | Delivery Date 1 |
|---|---|---|---|
| The World Bank work program for the next 12 months | Customs Modernization | October 2014 | November 2014 |
| Private Sector Competitiveness | July, October 2014 | June 2014 | |
| February, May 2015 | |||
| Financial Sector Development | July, November 2014 | August 2015 | |
| April 2015 | |||
| Skills development for agribusiness | May 2014 | September 2015 | |
| Internal Audit | May 2014 | June 2015 | |
| Public Service Payroll Audit | June 2014 | June 2014 | |
| Growth Report | July 2014 | July 2014 | |
| Country Partnership Strategy | May 2014 | September 2014 | |
| HIV/AIDS and TB | October 2014 | April 2015 | |
| March 2015 | |||
| PFM Reform | TBD | TBD | |
| Public Sector Modernization | TBD | TBD | |
| The Fund work program for the next 12 months | 2014 Article IV Consultation | May 2014 | July 2014 |
| Technical Assistance | |||
| Multiple missions in mid-2014 | Ongoing | |
| Multiple missions in 2014 | Ongoing | ||
| Multiple mission in late 2014 | Ongoing | ||
| Multiple missions in 2014 | Ongoing | ||
| Fund request to Bank | Periodic updates on the work related to business climate; financial sector development; and fiscal developments and reforms. | Ongoing | |
| Bank request to Fund | Periodic macro updates | Ongoing | |
| Joint products in next 12 months | Fiscal rules to manage volatility of SACU revenues Technical assistances for a financial sector strategy | September 2014 2015 | |
Dates are tentative. Years are calendar years
Statistical Issues
| I. Assessment of Data Adequacy for Surveillance | |
|---|---|
| General: Swaziland is assessed as “Category B” with regards to data adequacy for surveillance Purposes (data provision has some shortcomings, but is broadly adequate for surveillance). Staff’s analysis is mainly affected by shortcomings in the national accounts and fiscal sector. | |
| Real sector statistics: STA missions have improved the national accounts. However, significant weaknesses remain, including the lack of timely and accurate GDP numbers—the latest data is for 2009 (released in September, 2010). Annual GDP estimates at current and constant prices are compiled using both the production and expenditure approaches. The Central Statistical Office (CSO) is currently working to update benchmark and base years from 1985 to 2011 (new estimates for 2010–2013 will be published by end year). Shortcomings remain with regards to the treatment of Southern African Customs Union (SACU) revenue. Although the SACU group meeting at end-2012 resulted in a common understanding among technicians from the statistical offices, the treatment of SACU revenue in national accounts has yet to be agreed by member commissions. | |
| CSO publishes labor market statistics with long delays. The most recent unemployment data is for 2010 and the 2013 numbers are only expected to be released by end–2014. For 2015, the authorities are planning to conduct the second labor force survey (first was published in 2010). | |
| The consumer price index was significantly revised in May 2007 in the context of the GDDS initiative, incorporating improvements in compilation methodology, market basket coverage, flexibility for introducing new pricing outlets and new varieties of products, and enhanced processing capabilities. Four new geographical indices, as well as a national index, with updated market basket weights, are now available. Monthly consumer price data are published by CSO with a one-month lag. | |
| Monetary and financial statistics: Although some progress was achieved in the reporting of data on the other depository corporations (ODCs), quality problems remained, particularly in the areas of coverage, classification, and sectorization. The institutional coverage of the depository corporations’ survey is limited, as it covers only the CBS and the commercial banks. The CBS started to include the Swaziland Building Society into the monetary data backdated to December 2006. The credit and savings cooperatives, representing about 8 percent of the deposits of the commercial banks, remain outside the deposit corporations’ survey. | |
| External sector statistics: Annual balance of payments statistics are compiled by the CBS according to a methodology consistent with the fifth edition of the Balance of Payments Manual (BPM5). However, shortcomings in the timeliness and availability of trade data impart a certain degree of uncertainty to external sector statistics and surveillance. The CSO publishes data on foreign trade on a quarterly basis, but further actions are required to improve the accuracy and reliability of external sector data. | |
| II. Data Standards and Quality | |
| Participant in the General Data Dissemination System (GDDS) since February 11, 2003. | No data ROSC is available. |
| III. Reporting to STA | |
| The CBS reports monetary and financial statistics to STA regularly, although the timeliness of data could be improved. Balance of payments data are published in International Financial Statistics (IFS) and in the Balance of Payments Yearbook. | |
| I. Assessment of Data Adequacy for Surveillance | |
|---|---|
| General: Swaziland is assessed as “Category B” with regards to data adequacy for surveillance Purposes (data provision has some shortcomings, but is broadly adequate for surveillance). Staff’s analysis is mainly affected by shortcomings in the national accounts and fiscal sector. | |
| Real sector statistics: STA missions have improved the national accounts. However, significant weaknesses remain, including the lack of timely and accurate GDP numbers—the latest data is for 2009 (released in September, 2010). Annual GDP estimates at current and constant prices are compiled using both the production and expenditure approaches. The Central Statistical Office (CSO) is currently working to update benchmark and base years from 1985 to 2011 (new estimates for 2010–2013 will be published by end year). Shortcomings remain with regards to the treatment of Southern African Customs Union (SACU) revenue. Although the SACU group meeting at end-2012 resulted in a common understanding among technicians from the statistical offices, the treatment of SACU revenue in national accounts has yet to be agreed by member commissions. | |
| CSO publishes labor market statistics with long delays. The most recent unemployment data is for 2010 and the 2013 numbers are only expected to be released by end–2014. For 2015, the authorities are planning to conduct the second labor force survey (first was published in 2010). | |
| The consumer price index was significantly revised in May 2007 in the context of the GDDS initiative, incorporating improvements in compilation methodology, market basket coverage, flexibility for introducing new pricing outlets and new varieties of products, and enhanced processing capabilities. Four new geographical indices, as well as a national index, with updated market basket weights, are now available. Monthly consumer price data are published by CSO with a one-month lag. | |
| Monetary and financial statistics: Although some progress was achieved in the reporting of data on the other depository corporations (ODCs), quality problems remained, particularly in the areas of coverage, classification, and sectorization. The institutional coverage of the depository corporations’ survey is limited, as it covers only the CBS and the commercial banks. The CBS started to include the Swaziland Building Society into the monetary data backdated to December 2006. The credit and savings cooperatives, representing about 8 percent of the deposits of the commercial banks, remain outside the deposit corporations’ survey. | |
| External sector statistics: Annual balance of payments statistics are compiled by the CBS according to a methodology consistent with the fifth edition of the Balance of Payments Manual (BPM5). However, shortcomings in the timeliness and availability of trade data impart a certain degree of uncertainty to external sector statistics and surveillance. The CSO publishes data on foreign trade on a quarterly basis, but further actions are required to improve the accuracy and reliability of external sector data. | |
| II. Data Standards and Quality | |
| Participant in the General Data Dissemination System (GDDS) since February 11, 2003. | No data ROSC is available. |
| III. Reporting to STA | |
| The CBS reports monetary and financial statistics to STA regularly, although the timeliness of data could be improved. Balance of payments data are published in International Financial Statistics (IFS) and in the Balance of Payments Yearbook. | |
Swaziland: Table of Common Indicators Required for Surveillance
(As of June 1, 2014)
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.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (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 June 1, 2014)
| Date of latest observation | Date received | Frequency of Data6 | Frequency of Reporting6 | Frequency of Publication6 | |
|---|---|---|---|---|---|
| Exchange Rates | May 14 | May 14 | M | D | D |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | May 14 | May 14 | W | M | M |
| Reserve/Base Money | Apr 14 | May 14 | M | M | M |
| Broad Money | Apr 14 | May 14 | M | M | M |
| Central Bank Balance Sheet | Apr 14 | May 14 | M | M | M |
| Consolidated Balance Sheet of the Banking System | Apr 14 | May 14 | M | M | M |
| Interest Rates2 | May 14 | May 14 | M | M | D |
| Consumer Price Index | Apr 14 | May 14 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3 – Central Government | Dec 13 | May 14 | M | M | M |
| Stocks of Central Government and Central Government-Guaranteed Debt4 | Dec 13 | May 14 | A | A | A |
| External Current Account Balance | Dec 13 | May 14 | Q | A | A |
| Exports and Imports of Goods and Services | Dec 13 | May 14 | Q | A | A |
| GDP/GNP | 2009 | Sep 10 | A | A 2/ 3/ | A |
| Gross External Debt | 2013 | May 14 | A | A | A |
| International Investment Position5 | 2013 | May 14 | A | A | A |
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.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (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 June 1, 2014)
| Date of latest observation | Date received | Frequency of Data6 | Frequency of Reporting6 | Frequency of Publication6 | |
|---|---|---|---|---|---|
| Exchange Rates | May 14 | May 14 | M | D | D |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | May 14 | May 14 | W | M | M |
| Reserve/Base Money | Apr 14 | May 14 | M | M | M |
| Broad Money | Apr 14 | May 14 | M | M | M |
| Central Bank Balance Sheet | Apr 14 | May 14 | M | M | M |
| Consolidated Balance Sheet of the Banking System | Apr 14 | May 14 | M | M | M |
| Interest Rates2 | May 14 | May 14 | M | M | D |
| Consumer Price Index | Apr 14 | May 14 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3 – Central Government | Dec 13 | May 14 | M | M | M |
| Stocks of Central Government and Central Government-Guaranteed Debt4 | Dec 13 | May 14 | A | A | A |
| External Current Account Balance | Dec 13 | May 14 | Q | A | A |
| Exports and Imports of Goods and Services | Dec 13 | May 14 | Q | A | A |
| GDP/GNP | 2009 | Sep 10 | A | A 2/ 3/ | A |
| Gross External Debt | 2013 | May 14 | A | A | A |
| International Investment Position5 | 2013 | May 14 | A | A | A |
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.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A), irregular (I); and not available (NA).
Social and Demographic Indicators
| Area (sq. km.) | 17,364 | Population Density (per sq. | 72 | |||
| Population | Health | |||||
| Total population (million) | 1.2 | |||||
| Population growth rate (percent) | 1.5 | Physicians per thousand people (2009) | 0.2 | |||
| Life expectancy at birth (2012, years) | 49 | Public health expenditure (2012, percent of GDP) | 6.3 | |||
| Infant mortality rate per thousand (2012) | 56 | |||||
| Urban Population (2012, percent of total) | 21 | HIV prevalence rate (2012, ages 15-49) | 26 | |||
| Population younger than 15 | 38 | |||||
| (percent of total population) | ||||||
| GDP per capita (US$) | 3,042 | Education | ||||
| Access to safe water (2012) | Adult literacy rate (2011, | 88 | ||||
| Percent of total population | 74 | Primary school enrollment | ||||
| Urban | 94 | (2007, percent) | 85 | |||
| Rural | 64 | |||||
| Poverty Indicators | ||||||
| Labor Statistics (thousands) | ||||||
| Labor Force (2012) | 435 | Share of income, lowest 20 percent | 4.1 | |||
| GINI Index (201 0) | 51.5 | |||||
| Formal Employment (2006) | 92 | |||||
| Private Sector | 65 | |||||
| Public Sector | 28 | |||||
| Area (sq. km.) | 17,364 | Population Density (per sq. | 72 | |||
| Population | Health | |||||
| Total population (million) | 1.2 | |||||
| Population growth rate (percent) | 1.5 | Physicians per thousand people (2009) | 0.2 | |||
| Life expectancy at birth (2012, years) | 49 | Public health expenditure (2012, percent of GDP) | 6.3 | |||
| Infant mortality rate per thousand (2012) | 56 | |||||
| Urban Population (2012, percent of total) | 21 | HIV prevalence rate (2012, ages 15-49) | 26 | |||
| Population younger than 15 | 38 | |||||
| (percent of total population) | ||||||
| GDP per capita (US$) | 3,042 | Education | ||||
| Access to safe water (2012) | Adult literacy rate (2011, | 88 | ||||
| Percent of total population | 74 | Primary school enrollment | ||||
| Urban | 94 | (2007, percent) | 85 | |||
| Rural | 64 | |||||
| Poverty Indicators | ||||||
| Labor Statistics (thousands) | ||||||
| Labor Force (2012) | 435 | Share of income, lowest 20 percent | 4.1 | |||
| GINI Index (201 0) | 51.5 | |||||
| Formal Employment (2006) | 92 | |||||
| Private Sector | 65 | |||||
| Public Sector | 28 | |||||