Excerpts from "A Traveller's Guide to Swaziland" by Bob Forrester.
CARS and DRIVING
Index to information in the guide
Before the colonial era, the people of Swaziland were solely subsistence farmers or hunter-gatherers. Subsistence farming is still practised by a large proportion of the population, probably somewhere around half. Until the late 1930's, when Havelock mine went into production, exotic economy was limited to settler farming and small scale mining. After WW II the British thought of development in agricultural terms, creating large-scale sugar, cattle and forestry estates.
It was only after independence that Swaziland gained an industrial base. The Havelock asbestos mine provided Swaziland's main internal source of income for many years. Industrial development started when the iron ore mine at Ngwenya opened in the early 1960's.
A railway was built to carry the iron ore to Maputo and infrastructure began to develop. The first two factories made beer and cardboard boxes, presumably to put the cans of beer in. The presence of a railway, communications, electricity and water fuelled industrial growth, mainly underwritten by South African capital.
During apartheid the threat and reality of sanctions against South Africa caused many companies to re-locate or start new ventures in Swaziland which had access to overseas markets closed to South Africa. The sugar estates produce about 500 000 tons of sugar a year. This is mostly exported by rail to Mozambique and then to international markets by ship.
About one third of the 100 000 strong formal workforce are employed in textile factories owned by Taiwanese businessmen. Revenue from the Southern African Customs Union accounts for a large part of Government income, in 2008 it was 64% of the total budget. This causes major problems in periods of recession as the revenues are mostly derived from taxing imported luxury cars – and this drops rapidly in recessions. The second largest source of income for the Government is income tax.
The total budget for 2009/10 is 11 billion Emalangeni with a projected deficit of around three billion, the largest ever. For many years Swaziland had a budget surplus. Salary payments to civil servants is the single largest drain on the economy, at around half the outgoing budget. Attempts are being made to restructure some government departments, and para-statal organisations have been told that within a few years they must be self supporting. These efforts are widely seen as being ineffectual. The IMF has formally advised the government that unless they reduce the number of civil servants there will be severe problems, both internally and with the international financial community.
Swaziland has been criticized, both locally and internationally, for a poor civil rights record and severe abuses within the judicial system. Two key markets for Swazi exports are the USA (textiles) and the European Union (sugar). Both of these markets offer special preferential rates, both have warned the government that continued access to these markets is dependant upon "good governance". The loss of these markets would be socially and financially disastrous for Swaziland, although the country is increasingly selling its sugar on the open market as preferential agreements come to an end and are not renewed.
Sugar and related products, like Coca-Cola concentrates, keep the economy afloat. The economy has grown dramatically since Independence in 1968 when the entire Government budget was the same as the American military spent on brass bands. In effect the period 1968 to 2009 has seen the budget increase from 11 million to 11 billion.