Swaziland (Eswatini)

SWAZILAND (ESWATINI)

RISK RATING
High
Default High Risk Score 6.50
Normal Average 4.05
Weighted Average 3.40
RISK RATING HISTORY
RISK RATING SCALE

Risk Rating Scale

Severe: 8.0 to 10
High: 6.0 to 7.9
Elevated: 4.0 to 5.9
Moderate: 2.0 to 3.9
Low: 0.0 to 1.9
EXCHANGE RATE
Country Outlook

The tiny country faces a serious malnutrition problem during the coronavirus emergency, while the government has implemented few measures to improve food security. Some 25 percent of the rural population are estimated to be food insecure and in need of humanitarian assistance. Absolute monarch King Mswati III faces strong international criticism over human rights abuses, while his government’s weak adherence towards spending guidelines portend a potential fiscal crisis.  The current system of rule under an absolute monarchy also continues to be a source of popular discontent and protest. A lack of political reform is further aggravated by socio-economic hardships that increase strike risks in the country. The country’s economic woes, characterised by low foreign investment, high poverty rates, high unemployment, low economic growth, and a high budget deficit are expected to continue.

  • Calls for political reform will dwindle in the absence of a more corrective stance on the part of donor states. The country‚Äôs electoral process is characterised by an extreme lack of democratic principles. The sovereign, King Mswati III, sits atop the kingdom‚Äôs parliament, judiciary and executive, while often entitling himself to significant royalties and equity from large entrants to the Swazi market. Externally, calls for reform have been sounded by various interest groups including the IMF, Human Rights Watch, and the US Embassy. Altogether, it is this relatively loose enforcement of conditionalities to economic agreements and aid disbursements ‚Äď or apathy in the case of regional bodies ‚Äď that has weakened externally driven efforts towards domestic change.
  • Labour unions are increasingly staging protests calling for political reform and improved economic management. The Swazi citizenry has been historically mute, mostly due to a combination of state repression and cultural norms that command respect for the office of the king. The country‚Äôs largest opposition political organisations, the People‚Äôs United Democratic Movement (PUDEMO) and Swazi Youth Congress (SWAYOCO), which are classified as a terrorist organisation, have been forced to shift their headquarters to South Africa, after frequent targeting by security personnel. Labour unions, such as Trade Union Congress of Swaziland (TUCOSWA), are increasingly against the freezing of salary hikes, poor public services, and the alleged looting of public finances by the monarchy and its patronage networks.
  • The struggling economy will take a further hit due to the coronavirus. Most concerning is the country‚Äôs current budget deficit, which is due to a decline in Southern African Customs Union (SACU) receipts due to a deep recession in South Africa, the union‚Äôs biggest exporter. The eSwatini government is highly dependent on SACU receipts for its revenue; in some years, it can make up more than half of total government revenue. There is also concern over the country‚Äôs rapidly increasing government debt levels that are linked to a failure to implement fiscal consolidation as a response to its budget deficit. The country‚Äôs constrained economy has caused the government to seek significant budgetary cuts. However, financial mismanagement continues to undermine any attempts to turn the country‚Äôs economy around.
CUMULATIVE AND DAILY COVID-19 INFECTIONS AND DEATH RATE
INTERNATIONAL MONETARY FUND | DATAMAPPER
Risk Perils
Political Instability
3.0
Expropriation, Nationalisation, Confiscation & Deprivation
2.0
Contract Frustration & Breach
3.5
Taxation
3.5
Bribery & Corruption
6.5
Regulatory Burden
4.0
Strikes, Riots & Civil Commotion
4.5
Security
3.0
Sovereign Default
5.0
Economic Volatiliy
5.5

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