No end in sight for Swazi slowdown

King Mswati III and his nine wives are to get a new private jet

The tiny kingdom of Swaziland is two years into a slump and no end is in sight, its central bank has said.

In its annual report on the state of the economy, the bank said employment and farm output were falling, and most of the tax base came from a customs union revenue-sharing deal with South Africa rather than from domestic sources.

"The current economic slowdown in Swaziland is exceptionally deep and broad, with no evidence that the downward spiral that began two years ago will see a recovery," wrote its governor, Martin Dlamini, in his introduction to the report.

Real economic growth dwindled to an all-time low of 1.5% in 2001, the bank said, after recording expansion of 2.2% in 2000.

Duty free

The global economic downturn is the chief culprit for the tribulations facing Swaziland, the bank said, triggering reduced demand for exports, while the after-effects of September 11 had exacerbated the situation.

The US's Africa Growth and Opportunities Act grants countries like Swaziland duty free access to US markets, and the government has tried to encourage international garment manufacturers to set up shop so as to take advantage of the tariff breaks.

But while some new factories have opened, helping unemployment to fall from 45% to 40%, other established firms have shut their doors.

And foreign direct investment still has little reason to select land-locked Swaziland as a destination instead of its larger neighbours.

Meanwhile, drought has hit production of the main staple, maize, and has cut cotton production by 60% in the past two years.

Taking flight

Some of the country's citizens, however, may suspect that the government is not entirely at the mercy of outside influences.

Swaziland's million people are facing severe food shortages along with most of the rest of Southern Africa, and almost a third of the population is HIV positive.

But that has not stopped the government from authorising plans to buy King Mswati III and his nine wives a new private jet.

The prime minister has insisted that buying the plane - for a $2.8m downpayment and another $2m by the end of 2002 - is cheaper than hiring it.