world bank document...page 2 of j pages economic innicators gross national product in 1973/74 annual...

Report No. 852a-SW FILEEconomicMemorandum onSwazilandNovember 24, 1975

Country Programs Department IIEastern Africa Region

Not for Public Use

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Document of the World Bank

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may nototherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit Emalangeni (E) = Rand (R)

US$1 EO.671 = RO.671

El US$1.49 1/

US$1,000 E671 = R671

US$1,000,000 E671,000 = R671,000

The Emalangeni was introduced as the local currency in September 1974;the Rand is also legal tender in Swaziland.

SYSTEM OF WEIGHTS AND MEASURES: Metric

Metric British/US Equivalents

1 meter (m) 3.28 feet (ft)1 kilometer (km) 2 0.62 mile (mi)1 square kilometer (km ) = 0.386 square mile (sq. mi.)1 hectare (ha) 2.47 acres (ac)1 kilogram (kg) 2.2 pounds (lb)1 metric ton (m ton) = 2,204 pounds (lb)1 liter (1) - 0.26 US gallon (gal)

3 0.22 British gallon (imp gal)1 cubic meter (m3) 35.3 cubic feet (c. ft.)

GLOSSARY OF ABBREVIATIONS AND ACRONYMS

ACP - African, Caribbean and Pacific CountriesITF - Individual Tenure FarmNDP - National Development Plan 1973-77NIDCS - National Industrial Development Corporation of SwazilandRDA - Rural Development AreaSDSB - Swaziland Development and Savings BankSEDCO - Swaziland Enterprises Development CorporationSEPO - Small Enterprises Promotion OfficeSITI - Swaziland Industrial Training InstituteSNF - Swazi Nation FarmUBLS - University of Botswana, Lesotho and Swaziland

FISCAL YEAR

April 1 to March 31

1/ Recent adjustments to the value of the rand, and consequently, theemalangeni have been as follows:

June 27, 1975 - 1R 1E = US$1.40September 22, 1975 - 1R = 1E = US$1.15

TABLE OF CONTENTS

COUNTRY DATAMAP

Page No.

SUMMARY AND CONCLUSIONS ................... i- iv

I. INTRODUCTION ....... ....................... 1

II. ECONOMIC STRUCTURE AND DEVELOPMENT STRATEGY. 2

Resources and Structure ..... .............. 2Development Strategy ..... ................. 6

III. RECENT ECONOMIC PERFORMANCE .... ........... 9

A. Production ........ ..................... 9

-B. Domestic Finance ..... ................. 10

Expenditure and Savings .... ........... 10Government Finance ..... ............... 11Financial Institutions ..... ........... 15

C. Balance of Payments and External Debt.. 16

IV. SECTORAL DEVELOPMENTS ......... ............ 20

A. Agriculture ....... ................... 20

Tenure and Productivity ...... ........ 20Marketing ............. ............... 21Institutions .. ........................ 22Development Program and Prospects .... 24

B. Industry .. ........................... 27

Mining ......... ...................... 27Manufacturing ...... .................. 30Tourism ........ ...................... 32

This Report was prepared by Callie Boucher and is based on the findingsof a mission to Swaziland in January/February 1975. The mission was composedof Willem Maane (chief), Callie Boucher (economist) and Alvin Egbert (agri-cultural economist).

TABLE OF CONTENTS (Cont'd)

Page No.

C. Education and Training ..... ........... 33

D. Transport ........ ..................... 36

V. DEVELOPMENT ISSUES AND PROSPECTS .... ...... 37

Economic Growth ...... ..................... 37Public Finance ............. ............... 39Issues .................................... 41

STATISTICAL APPENDIX

of 3 pages

ODwgIY DATA- SWAZILAND

177,363 kaT 0*j4 xd.ion (mld-1972) *. Per blof arable land

S0CZAL DIDCAIORS

__Rpfeense CountrieaSwaziland

n-m - MO-ca Me1~0O 0

OR PER CAPITA US$ (ATLAS BASIS) 150 260 24.0 /a 300 /a 880

0DE8GAP0ICUrude ir-th rate (par thousand) .. 52 4.5 a~ 25 ji.. 33Crude death rate (per thoueand) .. 24 11 / 8 /j ' 5infant mortality rate (per thouaand live birtha) 126 Zi 6L t 3Life expectancy at birth (years) . l/w 55 63 3

Gross reproduction rate Y2 .. 3.5 3.2 /a 2.3 2.0Population growth rate 2.~52 19 2209Population growth rat. - urban 60 c 6 .

Age structure (percous)0-11. 1. 4§18 ~ 6 O1. / 31.

15-6. 50 /41.9 4.19 ~j 56 Li 6165 and over 3 c 3 i 5 ~ 1/ 5

Ago dependncy ratioA 1.0 Z! 1.0 a 1.0 ~ .9 i 0.6Economic dependency ratio/l 1.2 1.2 1.0 1.6 0.9

Urban population an parosent of total 10 8___1_ ~ x 432/Family planning i o. of .coeptror cumulative (thous.7L

No. of users (% of' married wo5ma) *..

Tota=lbor force (thousands) 130 180 / 280 /Is 250 271./.Peroentage employed in agriculture 55 50 7;' 82 30 58Pe.,a-tag. uneployad ... .17

INCOME DISTIBUTIONIper ft 0na .incme received by highest 5% .. 30/ 1.5 /k

Percent of national income received by highest 20%... 5991 68 4Percent of national income received by lowest 20%I3Percent of national income received by loweat LQ0%79

MISTRIBUTION OF LARD 0WNE4rSIP% owned by tmp 10% of nenrs. .

% owned by emallest 10% nf owners ..

Poultio prphyinian 9,900 8,1.00 /s 16

290/s 3,650 /s 5,210 /aPopulation par nursing person 1,820 920 73 1,320 7-; 710 7; 610 7;Population per hospital bed 530 280 7;a 3910- 250 7- 100 T

Per capita calorie supply as % ofrequirements / .. 87 01. 91.Per caplita protein supply, tota1 (grams par dayq) .. 6. 65 50 56

Of ah ich, animal and pulse . .. 19 30 /PDeath rate 1-4 ysaro /7 ..... 15 /

EDUJCATIONAdJuated JO primary school enrollment ratio 4.381 78 105 168Adjusted . secondary school enrollment ratio 5 17 8 30 /0., 16Years of scooling provided, first and second level 12 12 12 1IL 13Vocational enrollment am % of e.n, school enrollment 5 2 19 1 r 15Adult literacy rote % * 30 Li... 30 Ir

HDUSINEAve-rape No. of pereons per rums (urban)Percent of oupied units without pipad water...Access. to electricity (ao % of total population) 5 91. /atPrcent of ura1 population nooneoted to electricity .. 0. L..

CONSUMPTONRadio reaceivrer per 1000 population 7 115/ 17 / 128 /a 126/Passenger cars par l1 pplto 0 /i3/ 6 ~ 1.7Electric Power consumption (kwh P. c.) 35 180 Z. 82 / 301a/ 263 Neseprint consumption p.m. kg par year ... . 0.8 la

Notss, Pigures refer either to the latast periods or to acooant of enviroonmental temperature, body weigbt., andthe ltest years. Laeist periods refer in principle to dietributlon by age and Box of nAtionl POPulations.the years 1956-60 or 1966-70; the latest yearn in pr.im- /6 Protein standarda (requirements) for all countries an "atab-ciple tn 1960 and 1970. lAshed by USDA Econonic Ramearch Service Provide for a sinimum/I Th. Per Capita GOP estimate is at market prices for allowane of 60 grame of t-otal protein par day, and 20 grame of

ye-ar other than 1960,calculated by the mane converaion animal and pulse. protein, of whiah 10 grmam should be animaltechnique ao the 1972 World Bsok AtIa3. protein. Theas standards are somewhat lowe than those of 75

Li Average number of daughters per woman of reproductive grama of total protein and 23 grama of animal protein me ana ge. average for the world, proposed by FAG in the Third I(orld Food

/8 Population growth rates are for the deca.des ending in Survey.1960 and 1970. a. Some studies have suggested that crude death rates of childmen

A) Ratio of population under 15 and 65 and over to popula. agea 1 through 4 may be used as a first apprqalation index oftion of ages 15-61. for age dependency ratio and to labor malnutrition.forms of ages 15-64. for economic dependency ratio. &8i PereAntage enrolled of cerreaponding population of school ageFAO reference standards represent physiological re- as dafined for each co-ntry.quire,sento for oorma activity and health, taking

/a 1972; /b 1960-72; /c Estimate; /d Localities proclaimed as urban; /e 1961.-71; /f 'Cities of Gaborone andLuoatsi and the urban agglomermtion of Pranciatown; Z& Proclalmed. townships according to enlarged limits an ofAugust 1973, plus the town of Makeburg; Z~ Toneo having a population over 2,OD0 inhabitants; /8i African poDua.tiom;

/ 1971-72, economically active population; _Income recipient; 18 Rtoo pouai n cder 15 and 65 and ove tototal labor force between 15 and 1.9; /m Economical1Y active M sdi1t POpulation over 10, excluding ho...ewivesn,subsistence hunters and gotherers, /. Economically active population defined as 15-19 yearn of age; /. 1969,1 961.-66; Li Not xncluding vocational education; /r 1968; /a 1971; /t irbs..; I. Registered only;

v 1965; /. 1965-70;' /n 1973.

aSelection of Oaion on the objective coutry in hesed on its similarity in population size and econonic structure,although Gohn in at a higher level of d~v.lopnent. Both countrieso have well-diversified econnoies, are end-wd withnat-rl renources and hve advanced, active private sectors.

R 3 Augost 5, 1975

of j pages

ECONOMIC INnICATORS

GROSS NATIONAL PRODUCT IN 1973/74 ANNUAL RATE OF GROWrH (%, constant prices)

US$ Mln. S 1960 -65 196671973/74

ONP at Market Prices 195.0 100.0 *- 6.4 6.oGross Domestic Investment 54.3 27.8 6. 6.9Gross National Saving 60.5 31.0Current Account Balance 6.2 3.2Exports of Goods, NFS 138.4 71.0 *- 9.5Imports of Goods, MNS 129.3 66.38.4

OUTPUT, LABOR FORCE ANDPRODUCTIVITY IN 1973/74

Value Added Labor Forc/ V. A. Per WorkerUS$ Mln. j ( i % -US-

Agriculture 69.3 35.9 139 76.0 499 147.3Industry 51.4 26.6 15 8.2 3,427 324.8Services 72.4 37.5 29 15.8 2,496 236.6Unallocated . * * * *

Total/Average 193.1 1oo.o 183 100.0 1,055 100.0

OOVERJINMT FINANCEGeneral Goverment Central Government

( ~Mln.) of ODP MLln.) % Of GDP197 197 196 ~7 -P 7,7 L_/4 99/

Current Receipts . *. 28.6 19.4 27.3Current Expenditure 26.7 18.1 25.5Current Surplus .- 1 1.3 Capital lxpenditures .. .. .. 11.4 7.7 10.9External Assistance (net) .. .. .. 4.3 2.9 4.1

MOEY, CRIDIT and PRICES 1965 1970 1971 1972 1973 1974T -llion Emalangeni outstanding end period)

Money and Quaai Money . .

Bank credit to Public Sector .- 1.9 2.9 3.1 2.3 1.7Bank Credit to Private Sector .. 15.2 22.2 15.3 20.0 27.0

(Percentages or Index Numbers)

Money and Quasi Money as % of GD . . .

General Price Index (1967 - 100) 1/ .. 109.1 111.3 113.9 127.1 151.6Annual percentage changes ins

General Price Index .. 2.2 2.0 2.3 11.6 19.3Bank credit to Public Sector .- .. 52.6 6.9 -25.8 -26.1Bank credit to Private Sector .. .. 46.1 -31.1 30.7 35.0

NOTEt All conversions to dollars in this table are at the average exchange rate prevailing during the periodcovered.

/ Misaion estimate./ The labor force is defined as persona employed in the modern sector plus those whose main occupation was

in the traditional sector; excludes 20,000 absentees mainly in South Africa./ No general Price Index is available; index relates to the main cities of Mbabane and Manzini only.

not available

not applicable

August, 1975

of 3 pages

TRADB PAThENTS AND CAPITAL FLOWS

BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1972-74)

1971/72 1972/73 1973/74 US $ Mln %

(Millions US $)

Exports of Goods, NFS 88.5 93.9 138.4Imports of Goods, NFS 85.4 91.2 129.3 Sugar 38.9 31.1

Resource Gap (deficit = -) 39 ~ yi* Woodpulp 2713 21.93.1 -T-.7 ~~~~Irtci ore 13.8 11.0

Interest Payments (net) .. Asbestos 8.1 6.5Workers' Remittances Citrus 7.1 5.7

Other Factor Payments (net) -11.9 -12.6 -17.3 Meat & Meat Products 6.4 5.1

Net Transfers 12.3 12.3 14.4 All other commodities 23.3 18.7Balance on Current Account 3 2. 62 Total 125.0 io00o

Direct Foreign Investment . EXTERNAL DEBT. DECEMBER 31. 1974Net MLT Borrowing ..

Disbursements ** ., US $ Mln

Amortization # * Subtotal *- *- Public Debt, incl. guaranteed 39.1

Capital Grants *. *. Non-Guaranteed Private DebtOther Capital (net) .. Total outstanding & DisbursedOther items n.e.i .. .. l/Increase in Reserves (+) .. . DEBT SERVICE RATIO for 1974-

Gross Reserves (end year) . .Net Reserves (end year) . Public Debt, incl. guaranteed 3.0

Non-Guaranteed Private DebtFuel and Related Materials Total outstanding & DisbursedImports 5.0 5.2 7.8

of which: Petroleum .. ..

Exports - -of which: Petroleum - - - IBRD/IDA LENDING. (July 31, 1975) (Million US$)

RATE OF EXCHANGE IBRD IDA

1971 1972 1973 1974 1975 Outstanding & Disbursed 4.7 3.4(June) Undisbursed 10.5 .

US$ 1.00 - E 0.71 0.76 0.69 o.68 0.71 Outstanding incl. Undisbursed 15 7E 1.00 - US$ 1.I40 1.29 1.44. ~ 1d40 Otsndg c. nibued12

Mission est1nctes./ Ratio of Debt Service to Expwrts of Goods and Non-factor Services.

. not available

not applioable

August, 1975

IdRD 2940R2

31 /} To To t\ August 1975Koopmuiden Hectonpruit 0 l 20 30

SWAZILAND /_ I20_ MILES _ _

] / 0 1,0 210 ~~~~~~~~~~~~~~~~~~~~~~~3|0 41 5

Main roads- tar KILOMETERSMain roads - grovel

…--Minor roads P000----+-4-Railways To

* Important airfield Neisrut

Aerial ropeway

Rivers abro§ Irrigation schemesM llIf Pine and gum forests

REGIONSHighveld- average height

above sea level 1,200 m.drae0 TMiddleveld-average height Lornahasho Can-

above sea level 600m. PShEPma26 Lowveld-average height

above sea level 200m.s- -/-Lubombo-average height ume J A2 o

above sea level 550m. ' > -' . ""Ir

® National capital YAInternational boundaries H H 0 -H O

•////////Mineral concessions Forbes Rest l Stn ba

-.- District boundaries5;t Mines than/e,~.

To Johannesburg \ 9Mlmn

To Lothoir

O / A_~~~~~~~~~~~~~~~~~~ps

SUMMARY AND CONCLUSIONS

i. Swaziland is the second smallest country in Africa, with a popula-tion of about half a million; it is landlocked between Mozambique and theRepublic of South Africa. The country is relatively well endowed with naturalresources, and has good potential for development. It has a varied climate,a number of perennial rivers, and an adequate supply of cultivable land, whichtogether provide the basis for a diversified agriculture. In addition, thereare significant deposits of coal and iron ore, and lesser quantities ofasbestos, all of which are currently exploited; several industrial mineralshave also been identified. Swaziland is also a country of great scenic beauty,an asset which could be exploited in the development of tourism.

ii. Since the turn of the century, almost half of the land has beenowned by foreigners; the remainder is occupied by Swazi subsistence farmers.At Independence in 1968, the Government inherited an acutely dualistic economy.This pattern began with the mining of asbestos in 1939, and continued withiron ore production, and the establishment of large plantations of forestry,sugar, citrus and pineapples on foreign-owned land. The development of modernagriculture was accompanied by related processing industries of sugar, wood-pulp, and fruit canning. The establishment and expansion of foreign enter-prises took place in an environment in which the Government played only aminor role in directing national economic development.

iii. The structure of the economy continues to reflect this dualism.The modern sector provides over 80 percent of the domestic product, merchan-dise exports, and wage employment, while about one half of the populationcontinues to depend directly on subsistence agriculture (maize, sorghum,groundnuts, potatoes) and cattle-raising for their livelihood. The dominantsectors, agriculture and manufacturing, account for about 35 percent and15 percent of GDP, respectively, while mining contributes just under 10 percent.The country has had a good record of economic growth. During the 1950's andearly 1960's, GDP grew at about 12 percent per annum, largely because of therapid expansion of operations in the modern sector; since then, it hasaveraged about 7 percent per annum. GNP per capita in 1973/74 is estimatedat US$440. High prices for sugar and wood pulp in the last few years haveconsiderably strengthened the export-oriented base of the economy.

iv. The country has a long-standing economic relationship with theRepublic of South Africa with which, together with Botswana and Lesotho, itshares membership of the Rand Monetary Area and the Southern Africa CustomsUnion. Under an agreement with the Republic, the Government established onApril 1, 1974, a Monetary Authority, and created its own currency, the lilangeni(plural: emalangeni), with the full backing of rand deposits with the SouthAfrican Reserve Bank; both the lilangeni and the rand are legal tender inSwaziland. As regards merchandise trade, about 90 percent of imports originatein, or pass through, the distribution system of the Republic, which itselfabsorbs about 25 percent of Swaziland's merchandise exports. The rapidlyexpanding tourist sector depends on South Africa for over 60 percent of itstourist traffic. About 45 percent of government revenues is derived fromthe common pool of the Customs Union. The country has benefited from thisassociation in terms of investments and markets, and its economy has becomeclosely linked with that of the Republic.

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v. The development strategy which the Government adopted at Indepen-dence had the following main objectives: (a) to preserve the conditions forsustained growth of the private sector, while achieving a greater degree ofSwazi involvement; (b) to accelerate the transition from subsistence agri-culture to cash crop production; (c) to improve social services, particularlyin the rural areas; (d) to improve the relevance of the educational system andto expand education, particularly in the rural areas; and (e) to increasethe tax base and further mobilize domestic resources for government capitalexpenditure. This strategy was again endorsed and elaborated in the secondNational Development Plan, 1973-77 (NDP) which is well focused on thedevelopment needs of the country. The allocation of planned expenditureon economic services, including agriculture, is more than one half of totalcapital expenditure, while the share of investments in community and socialservices amounts to about 36 percent. Implementation of development projectswas about 60 percent of planned expenditure in 1973/74, as compared to about30 percent during the early years of Independence; this marked improvementis due largely to a substantial program of technical assistance.

vi. One of the main objectives of government policy has been to reversethe precarious financial position inherited at Independence. The Governmenthad for many years depended on grants-in-aid from the United Kingdom to meetits recurrent budget deficits which resulted not only from a narrow tax base,but also from a deliberate policy of low taxation of the prosperous modernsector. In 1969/70, with the introduction of the new Customs Union Agree-ment, revenues quadrupled, resulting in a current budget surplus. This posi-tion was further strengthened by improvements in tax administration, and bylegislation enacted in 1973 under which a 50 percent levy was imposed onsugar export earnings above a po5 ted level; a 5 percent turnover tax on hotelsand restaurants was also introduced. Current revenue thus increased at anannual rate of 32 percent in current prices between 1971/72 and 1974/75, asagainst a rise of 19 percent in recurrent expenditure; the Government is nowin a position to make a substantial transfer from the recurrent to the capitalbudget. Other fiscal measures adopted to effect greater mobilization ofdomestic resources include the local incorporation of the two commercial bankswith 40 percent government equity; reorganization of the Swaziland Developmentand Savings Bank; establishment of the Swaziland Royal Insurance Corporationwith a monopoly of insurance business in the country; and creation of aNational Provident Fund.

vii. The Government's main strategy for development of traditional agri-culture is the establishment of integrated Rural Development Areas (RDAs).Implementation so far has been slow, but in the Northern RDA where substantialinputs have been concentrated, there have been encouraging increases both inyields of a number of crops as well as in farmers' incomes. Further improve-ments on a more extensive basis will be realized only if several existingconstraints are removed: (a) the agricultural extension service is inade-quately staffed; (b) there is a shortage of technical and management personnel;(c) decision-making under the tenure system of traditional land is unduly slow;(d) the level of rural education is low; and (e) an adequate system formonitoring agricultural projects is lacking. In addition, the development of

- iii -

marketing and storage facilities, wider use of credit, and establishment ofa farmer information service, will all have to be realized before significantgrowth in traditional agriculture can be achieved. Substantial investmentsin the traditional sector will have to be sustained over the next severalyears to implement the RDA program. In the early stages, the Government willneed to employ additional expatriate technical personnel, but should at thesame time intensify its recruitment and training of local counterparts.

viii. Towards the end of the decade, the following pattern of the economyis likely to emerge. Economic growth would continue to be export-propelled,and would be accompanied by a sizeable surplus on government current accountwhile employment is likely to grow by about 8 percent annually. GDP in realterms is projected to increase at 6 percent per annum up to 1980/81. Outputgrowth would be based mainly on the expansion of modern sector enterprises inagriculture and manufacturing. In particular, the medium-term prospects arefavorable for sugar (following the convention between the EEC and ACP countries)and for wood pulp, the country's main export commodities, and the growth ofoutput of modern agriculture is expected to be 5 percent per annum. Theoutput of traditional agriculture would increase by about 4 percent per annum,if programs are implemented for a higher cattle offtake, crossbreeding of thenational herd, improved animal husbandry, and increased crop production fromthe RDAs.

ix. If Government policy to keep recurrent expenditure under controlis successful, a substantial portion of capital expenditure could continueto be met from budget surpluses. Fiscal policy should also be directed togreater reliance on domestic borrowing for capital expenditure, though foreigrborrowing would still be needed and could now be afforded on less concessionaryterms. A projected debt service ratio of less than 5 percent of merchandiseexports in 1980/81 indicates a manageable debt service burden over the nextseveral years.

x. Dualism will continue to represent the main challenge to develop-ment of the Swazi economy. In the agricultural sector, the problem is beingtackled mainly through the development of RDAs, through fiscal policy, ex-pansion of training and education in the rural sector, and through the pur-chase of foreign-owned land for redistribution to traditional farmers. TheRDA program offers the opportunity for large numbers of the rural populationto share in the benefits of growth, and as such, it deserves internationalsupport; successful implementation of the program however will require acontinuing political commitment, adequate financial and technical resources,and national support.

xi. Government policy in the manufacturing sector calls for greaterparticipation in, and control of, the economy by Swazis, and this demands pro-gressive localization of the high proportion of foreign technical personnel.Accordingly, training at all levels is being expanded; no financial constraintsare envisaged in sustaining programs geared to supplying trained Swazis toeffect the localization of technical and professional positions in both theprivate and public sectors. Additionally, the recent establishment of theSwaziland Enterprises Development Corporation is designed to foster the

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development of emerging Swazi entrepreneurs by providing financial assistanceand technical and management training.

xii. The Government's long-term policy of educational reform is signif-icant; the objective is to de-emphasize the academic bias in the educationalsystem by a greater concentration on technical subjects. The rapid expansionof the educational system at both the primary and secondary levels over thepast 15 years will bring into the labor force increasing numbers of Swaziswith higher employment expectations, and thus the likelihood of some degreeof frictional unemployment and an increased urban drift. The Government'srural educational programs, expansion of technical and vocational training, aswell as the current reform of the educational system, are directed to allevia-ting this problem in the long-term. However, these programs should be accom-panied by plans for accelerated modernization of the rural sector, includinga rapid improvement in social services.

xiii. The Swazi economy is entering a new phase in which goverinment policyis being asserted in directing national development, and in which a greaternumber of economic options for implementation of this policy can be exercised.Accordingly, a continuing improvement in the administrative capacity of theGovernment is essential; current favorable economic circumstances should notinduce any relaxation of the national effort.

I. INTRODUCTION

1. The Kingdom of Swaziland is a landlocked country which lies betw enSouth Africa and Mozambique. It is one of thesmallest countries (17,368km )in Africa with a population estimated at half a million in 1974, and growingat a rate of about 3 percent per annum.

2. The counqry can be divided into four topographical regions: (i) thehighveld (5,200 km ) in the west is a mountainous region of pine forests,interspersed with seyeral valleys and gorges of great scenic beauty; (ii) themiddleveld (4,700 km ) is an area of fertile soils and rolling grasslands;it is the most densely populated region, and is the location of the capitalcity of Mbabane and the mai2 commercial and industrial center of Manzini;(iii) the lowveld (6,200 km ) is a savanna type country in the east with largesugar plantations; and (iv) the Lubombo region (1,300 km ) is an escarpmentof 600 m which stretches along the lowveld towards the western lowlands oflozambique.

3. Swaziland was a British protectorate from 1902 until 1968 when itachieved its independence. The governmental structure which is probablyunique among developing countries, consists of a modern government (the Cabinet)as well as a separate traditional government (the Swazi National Council).The King, who has now reigned for over 50 years, is de facto executive head ofboth governments. Following his suspension of the Constitution and the aboli-tion of the House of Assembly in 1973, a committee was appointed to draw up anew constitution, a first draft of which is expected in the next few months.Overall responsibility for economic and social development lies with theCabinet; however, any operation on, or relating to, tribal land (about 55percent of total) requires prior approval of the Swazi National Council. Withmodern development of tribal lands still at an early stage, the influence ofthe Swazi National Council on future economic and financial policies could beconsiderable. The relationship between the two governments is complex, andthe business of the Swazi National Council is generally not privy to outsiders.The operation of this dual system, while rightly preserving many aspects ofthe country's heritage, tends to slow the pace of decision-making and economicchange. In recent years, however, efforts to accelerate economic progress inthe traditional sector (for example, modernization of agriculture and explora-tion of minerals on Swazi Nation land) have led the Swazi National Council toseek foreign technical assistance in the formulation of policy.

4. Economic developments in Swaziland must also be examined in thelight of geo-political circumstances, in particular its relationship withthe Republic of South Africa. Together with Botswana, South Africa andLesotho, Swaziland belongs to the Rand Monetary Area and the Southern AfricaCustoms Union. In September 1974, the Government issued its own currency,the lilangeni (plural: emalangeni), with the same par value as the rand;under a monetary agreement with the Republic, the rand remains legal tenderin Swaziland. The country has benefited from this association with theRepublic of South Africa in terms of investments and markets, and the Swazieconomy has become closely linked with that of the Republic. About 90 percentof imports originate in, or pass through, the distribution system of the

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Republic, which itself absorbs about 25 percent of merchandise exports. Inthe rapidly expanding tourist sector, South Africans account for over 60percent of total hotel visitors. In addition, approximately one half ofcentral government revenue is derived from the common pool of the CustomsUnion.

II. ECONOMIC STRUCTURE AND DEVELOPMENT STRATEGY

Resources and Structure

5. In relation to its size, the country is well endowed with naturalresources. The variations in types of soil as well as in climatic conditionsmake for a diversified agriculture. The existence of several perennial riversprovides good irrigation and hydro-electric potential. There are significantdeposits of coal and iron ore, and lesser quantities of asbestos, all of whichare being exploited; small deposits of gold and a number of industrial mineralshave also been identified. The physical characteristics of the country arefavorable for the development of tourism. The main constraint is a shortageof technical and professional manpower; about one half of administrative andtechnical positions and about 60 percent of skilled positions in the economywere held in 1973 by non-Swazi citizens.

6. The structure of the economy is severely dualistic. This dualismis the usual type between the modern and traditional sectors; it has, however,some peculiar features. It has not generated a wide urban/rural income gapowing to the relative dispersion of the few large industrial activities, andalso to the existence of a prosperous agricultural modern sector. Moreover,the dualism is mainly foreign/Swazi in an economic environment where theGovernment has until recently played a limited role, and where a foreignmodern sector has also been developed in industry.

7. This process began towards the end of the 1930's with the productionof asbestos, and continued with the development of forestry, iron ore produc-tion, and the establishment of large plantations of sugar, citrus andpineapples. The development of modern agriculture was accompanied by therelated manufacturing of sugar, wood pulp and canned fruit. The establishmentand expansion of foreign enterprises took place with little or no governmentregulation. The modern sector presently accounts for over 80 percent of boththe domestic product and wage employment, the growth of which has absorbed notonly the natural increase in the labor force but the substantial drift fromthe traditional sector.

8. In contrast to the development of the modern sector, the tradi-tional sector has remained virtually stagnant. About 70 percent of the popula-tion live in the rural sector, and as much as 50 percent depend directly onsubsistence agriculture (the principal crops are maize, groundnuts, sorghum)and cattle rearing for most of their livelihood. Traditional agriculturepresently accounts for about 40 percent of value added in the agriculturalsector, and about 14 percent of overall GDP. The labor force engaged in therural sector has declined from 72 percent in 1960 to about 57 percent in 1973.

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Table 1: LABOR FORCE, 1966 AND 1973a(in thousands of persons)

1966 1973

Total Labor Force 165 202

Employed in the Modern Sector 59 87

of which: in Swaziland (39) (67)in South Africa (20) (20)

Employed in the Traditional Sector 106 115

/a Labor force is defined as total employment in the modern sector plusthose persons whose main activity was in the traditional sector.

Source: Population Census 1966 and mission estimates.

9. In general, the employment situation is characterized by a shortageof skilled Swazis throughout the modern sector, thus necessitating therecruitment of a high proportion of expatriate personnel. Employment inthe modern sector accounts for 33 percent of the total labor force estimatedat 202,000 persons; the rest are engaged mainly as unpaid family workers inthe traditional sector, including about 20,000 classified as "absentees" inSouth Africa. The male labor force is estimated at 42 percent of the popula-tion 15 years and over.

Table 2: EMPLOYMENT IN THE MODERN SECTOR, 1971-73

1971 1972 1973

Private Sector 46,080 53,268 54,264

Paid employees 37,130 43,767 44,285Self-employed /1 1,278 869 987Unpaid family workers /1 142 1,042 1,093Small Swazi traders /1 1,030 1,090 1,399Employees by private homesteads /1 6,500 6,500 6,500

Public Sector 9,921 10,089 12,747

Total Employment 56,001 63,357 67,011

/1 These estimates are subject to wide margins of error and should be viewedwith cauti n.

S irce: Central Statistical Office.

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10. The rapid expansion of employment during the 1960's as a result ofthe establishment of modern sector enterprises has been followed by a sustainedgrowth rate in employment of about 10 percent annually between 1970 and 1973.Agriculture is the largest source of employment, accounting for over 40 percentof total cash employment, with a growth rate of 9 percent annually. Thegovernment sector, which is the second largest source of employment, has grownat 11 percent per annum in recent years. Together these two sectors absorbedover one half of total cash employment created between 1970 and 1973.

Table 3: TOTAL PAID EMPLOYMENT BY INDUSTRY, 11 SEPTEMBER 1970, 1973

Percent ofTotal Annual

1970 1973 (1973) Growth rate-- percent --

Agriculture 18,319 23,655 41.5 8.9

Mining & quarrying 2,907 2,924 5.1 0.2

Manufacturing 5,383 7,360 12.9 11.0

Electricity & water 509 592 1.0 5.1

Construction 2,328 3,950 6.9 19.3

Distribution, etc. 3,423 4,002 7.0 5.3

Transport, etc. 1,877 2,688 4.7 12.7

Finance, etc. 344 581 1.0 19.1

Social services 7,336 11,280 19.8 15.5

Total 42,426 57,032 100.0 10.3

/1 Excludes self-employed, family workers, small traders and domesticservants shown in Table 2.

Source: Statistical Appendix, Table 8.8.

11. With respect to incomes, no detailed studies are available on whichany reliable quantitative assessment of income distribution can be based.Consideration should be given to a statistical survey designed to measurethe extent of income inequality. However, as a reflection of the veryvisible dualism, modern/traditional and foreign/Swazi, and the relativeimportance of the foreign modern sector, there is little doubt that incomedistribution in Swaziland is skewed. Despite the paucity of information,including indirect indicators of production, value added and wages in therural sector, a study sponsored by the Ministry of Overseas Development of the

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UK has recently been completed. This study, which has not yet been officiallyreleased, provides the methodological background for a presentation of incomedistribution within the national accounts framework of a developing country.The mission itself constructed the following rough distribution, using dataon holdings, prices and food production:

Table 4: INCONE DISTRIBUTION, 1971/72

AfricanPopulation-/1 Labor Force Income------------- percent ---------------

Swazi Nation Farms 62.1 65.7 14.1

Individual Tenure Farmsand Forestry 16.8 15.2 22.0

Other Employment 21.1 19.1 63.9

100.0 100.0 100.0

/1 Excludes absentees.

Source: Annual Statistical Bulletin, 1974 and mission estimates.

12. The performance of the economy since the first phase of moderniza-tion in the 1940's has been very satisfactory. During the decade 1953 to1962, the average annual rate of growth of GDP in real terms was about 12percent and was due almost entirely to operations in the private modern sector.Between 1963 and 1973 real GDP grew at about 7 percent per annum. In recentyears, the main sectoral developments have been a rapid growth in tourism andthe expansion of the government sector. The agricultural and manufacturingsectors presently contribute about 36 percent and 15 percent, respectively,to GDP.

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Table 5: GDP (FACTOR COST) BY INDUSTRIAL ORIGIN, 1971/72(Percent)

Agriculture 35.9

Modern Agriculture (22.0)Traditional Agriculture (13.9)

Mining 7.3

Manufacturing 15.2

Electricity and Water 1.7

Construction 3.2

Distribution includingHotels and Restaurants 7.8

Transport and Communications 7.0

Ownership of Dwellings 4.3

Finance and Business Services 1.8

Other Services 15.8

Total 100.0


Development Strategy

13. Planning is still at an early stage of development. The plans whichhave been prepared periodically since 1948 were essentially public expenditureprograms of development assistance provided mainly by the United Kingdom.The first comprehensive presentation of the country's development problemsand objectives was in the post-Independence Plan of 1969. The developmentstrategy adopted by the new Government at Independence aimed to: (a) preservethe conditions for sustained growth of the private sector, while achieving agreater degree of Swazi involvement; (b) promote the transformation of tradi-tional agriculture into commercial farming; (d) improve the relevance andusefulness of education; (e) provide better housing and health conditionsfor low-income families in urban and rural areas; and (f) increase the taxbase and further mobilize domestic resources to contribute towards governmentcapital expenditure.

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14. This strategy was again endorsed and elaborated in the secondNational Development Plan, 1973-77 (NDP) which gives a good account of theGovernment's objectives, and the programs formulated for achieving them.A number of policy measures have been taken in line with these objectives.These include the strengthening of incentives to private investment; theexpansion of rural development programs; the acquisition of governmentholdings in the two mining enterprises and commercial banks; and a starttowards reform of the educational system. Successful execution of the Planwill demand a strengthening of the Government's implementation capacity, aswell as the political resolve necessary to support the rapid change of a tradi-tional society. With further expansion of the planning capacity, the macro-economic underpinning of a long-term strategy could be improved. The developmentof the information system is proceeding along sound lines, but an integratedstatistical program (probably for a five-year period) should be formulated toserve the needs of national planning on a continuing basis.

15. The NDP was drawn up as a three-year rolling plan, and calls fora government program of capital expenditure totaling E43 million (US$64 mil-lion) over the period 1973/74-1975/76. Generally, the NDP is well focusedon the development needs of the country. The allocation of planned expenditureon economic services, including agriculture, was more than one half of totalcapital expenditure, while the share of investments in community and socialservices (water, health, housing, education), largely in the rural areas,amounted to 36 percent. During the early years of Independence, the capacityof the administration to implement development projects was extremely limitedby the dearth of technical and management skills, and in 1971/72, for example,only about 30 percent of planned expenditure was utilized. In part owing toa substantial program of technical assistance, the situation has improvedsince then, and 60 percent of planned development expenditure was utilized in1973/74.

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Table 6: GOVERNMENT CAPITAL EXPENDITUREPROGRAM, 1973-76

E Million Percent

General Administration 3.0 7

Law and Order 1.7 4

Community Services 8.1 19Water and Sewerage (3.4) (8)Housing (3-0) (7)Local Authorities (0-4) (1)Other (1.3) (3)

Social Services 6.0 14Education (4.3) (10)Health (1.7) (4)

Economic Services 23.9 56Agriculture and Forestry (8.1) (19)Industry, Commerce,

Mining and Tourism (3.4) (8)Power (5.1) (12)Transport and Telecommunications (7.3) (17)

TOTAL 42.7 100

Source: Second National Development Plan, 1973-77.

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III. RECENT ECONOMIC PERFORMANCE

A. Production

16. The analysis of recent economic performance is hampered by thelack of adequate and timely statistics, in particular, the absence of anynational income accounts since 1971/72. With respect to external transactions,the free flow of funds within the monetary area made for low priority in theadequate collection of relevant data; the latest available official statisticsare for 1970/71, and relate only to the current account of the balance ofpayments. 1/

17. GDP in real terms increased at about 7.0 percent per annum between1971/72 and 1973/74. Gross domestic income grew even faster, about 9 percentannually, as a result of the very favorable export prices of sugar and woodpulp. The main sectoral developments were an expansion in forestry and live-stock production, and in the related processing of agricultural products. Theproduction of meat and meat products increased by 25 percent between 1971/72and 1973/74, and value added in the manufacturing sector was estimated to havegrown at 10 percent per annum. GDP in the government sector increased atabout 8 percent per annum over this period.

1/ Free access to the foreign exchange reserves of the Rand Monetary Areamakes conventional analysis of the balance of payments of less importancein Swaziland circumstances than in a more typical independent monetarysystem.

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Table 7: DISTRIBUTION OF GDP, 1971/72 AND 1973/74(Million Emalangeni)

Annual Average1971/72 1973/74 Rate of Growth

(1971/72 prices) Percent

Agriculture 30.1 32.7 4.2

Individual Tenure Farms (17.4) (19.2) 5.0Swazi Nation Farms (12.7) (13.5) 3.1

Forestry 2.6 3.0 7.4Mining and Quarrying 8.5 8.5 -Manufacturing 13.8 16.7 10.0Community & Social Services 12.5 14.6 8.1Other 23.5 26.3 5.8GDP (factor cost) 91.0 101.8 5.8

Indirect Taxes 9.4 13.3 19.0

GDP (market prices) 100.4 115.1 7.1

GDP per capita 230 250(US$ 300) (US$ 370)

Source: Central Statistical Office and mission estimates.

B. Domestic Finance

Expenditure and Savings

18. The pattern of expenditure between 1971/72 and 1973/74 shows aslight decline in the share of GDP going to private consumption (57 percentin 1973/74 compared with 62 percent in 1971/72) as compared to a relativelystable government consumption level at an average of 14 percent. The latter,however, is expected to rise sharply during 1975 as a result of a revisionof wages and salaries in the public sector. It is estimated that the ratioof investment to GDP was on average 25 percent between 1971/72 and 1973/74,with private investment accounting for 70 percent of total capital formation.However, the expansion of the Government's investment program, together withthe gradual improvement in its implementation capacity, have resulted in asharp increase in the proportion of government investment to GDP in the lastfew years (from 3 percent in 1971/72 to 7 percent in 1973/74).

19. Swaziland has maintained a high level of savings compared with thatof other developing countries at a similar income level. Between 1967/68

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and 1971/72, the average ratio of gross domestic savings to GDP was about28 percent; it is estimated to have increased to 30 percent in 1973/74, andprobably rose even further in 1974/75, largely because the higher governmentcurrent expenditures would be more than offset by additional revenues generatedby the sugar levy and other direct taxation. As savings grew faster thaninvestments, the resource surplus increased from 2 percent to 4 percent ofGDP in the 1971/72-73/74 period. The national savings ratio was about thesame as the domestic ratio, since estimated net income payments, mostlydividends were balanced by net transfers mainly to Government.

Table 8: RESOURCES, USES AND SAVINGS, 1971/72-1973/74(in percent of GDP)

1971/72 1972/73 1973/74

Consumption 75.2 72.7 70.2

Private (61.7) (60.1) (56.6)Government (13.5) (12.6) (13.6)

Investment 22.6 25.5 25.6

Private (16.6) (17.1) (16.3)Government (3.3) (6.1) (7.3)Changes in stocks (2-7) (2.3) (2.0)

Resource Balance 2.2 1.8 4.2

Exports of goods & NFS (63.0) (61.2) (65.1)Imports of goods & NPS (60.8) (59.4) (60.9)

Gross Domestic Product 100.0 100.0 100.0

Gross Domestic Savings 24.8 27.3 f 29.8Gross National Savings 25.0 27.1 \28.9


Government Finance

20. The Government's financial position since 1969/70 stands in sharpcontrast to that of the past when budget deficits had to be met from UnitedKingdom grants-in-aid. (It should be added, however, that Swaziland's chronicneed for budget support was a matter of deliberate policy rather than any fi-nancial inability of the prosperous modern sector to pay for government opera-tions.) The substantial upturn in government finances began in 1969/70 whenrevenues quadrupled as a result of the new Customs Union Agreement. This posi-tion was further strengthened by improvements in tax administration, and in 1973by the enactment of new fiscal legislation; in particular, a 50 percent levy was

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imposed on sugar export earnings when realized prices exceeded a posted level(presently R 132 per metric ton), and a 5 percent turnover tax was also imposedon hotels and restaurants. As a result, current revenue increased at a.annual rate of 32 percent between 1971/72 and 1974/75; the corresponding risein government recurrent expenditure was 19 percent.

21. Total revenue was on average 19 percent of GDP and the contributionof customs and excise, and income tax to total revenue remained virtually thesame at around 45 percent and 30 percent, respectively, during the period1971/72 - 1973/74. The scope for government action in the tax field isrestricted to direct taxation, since control over changes in customs tariffsand excise taxes is exercised by South Africa under the terms of the CustomsUnion Agreement. The growth of revenues from direct taxation between 1971/72and 1973/74, has been faster than that of GDP, indicating some degree of taxelasticity to incomes.

Table 9: CENTRAL GOVERNMENT CURRENT REVENUE 1971/72-1974/75(Million Emalangeni)

1971/72 1972/73 1973/74 1974/75(prov.) (est.)

Customs & excise 8.5 10.5 13.3 18.7

Sugar levy - - 1.5 9.0

Income tax 5.3 7.1 8.5 12.4

Other taxes & duties 1.2 1.4 2.0 2.3

Earnings of departments 1.8 2.2 1.2 )

3.5)Other revenue 1.7 1.3 2.1 )

Total 18.5 22.5 28.6 42.4===Z: - ~ ~ .- _

Source: Statistical Appendix, Table 5.1, and mission estimates.

22. Government policy on expenditure as outlined in the NDP has beento keep the rate of increase of total recurrent expenditure at 6.5 percent inreal terms and so ensure that a growing surplus from the recurrent budgetcould be made available for capital expenditure. In the case of those minis-tries concerned with the development of the rural sector and human resources,a higher rate of growth in recurrent expenditure is allowed. For example,the permitted real increase in general administration is 5 percent, education9 percent and agriculture 10 percent. Indications are that these guidelineshave been exceeded; total current expenditure, which increased at 19 percentannually in current prices in recent years, increased by 35 percent during1973/74. This was due mainly to the full impact of salary increases to

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government employees during 1972/73, and the establishment of a defense forcein 1973/74; the effect on administration and defense expenditure during 1973/74 was a rise of 60 percent, but some reduction in expenditure on defenseequipment is expected in 1974/75.

Table 10: CENTRAL GOVERNMENT CURRENT EXPENDITURE 1971/72-1974/75(Million Emalangeni)

1971/72 1972/73 1973/74 1974/75(Prov.) (Budg.)

Administration & Defense 7.8 8.8 14.4 12.3

Social Services 4.6 5.3 6.5 7.6

Education (3.1) (3.6) (4.5) (5.3)Health (1.5) (1.7) (2.0) (2.3)

Infrastructure 2.3 2.7 2.5 2.2

Agriculture 1.5 1.5 1.7 2.1

Other Services 0.3 0,4 0.5 3.0

Public Debt 0.9 1.1 1.1 1.8

Total 17.4 19.8 26.7 29.0


23. The level of government capital expenditure fell immediately afterIndependence as implementation capacity diminished following the departureof many expatriate civil servants. For a number of years, capital expenditureremained on average at less than E 3 million annually, or less than 5 percentof GDP, because of a slow build-up of absorptive capacity and little directintervention by Government in the economy; in addition, there was only modestprovision of basic services in agriculture and infrastructure. With thegrowth of revenues from the Customs Union and increased government participationin economic and social development, capital expenditure increased fromE 3.5 million in 1971/72 to E 12.5 million in 1974/75. A greater emphasis hasbeen given to agriculture, whose share of total capital expenditure was 26percent in 1974/75 as compared to 9 percent in 1969/70.

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Table 11: CENTRAL GOVERNMENT BUDGETARY SITUATION, 1971/72-1974/75(Million Emalangeni)

1971/72 1972/73 1973/74 1974/75Est. Budget

Current Revenue 18.5 22.5 28.6 42.4

Current Expenditure 17.4 19.8 26.7 29.0

Current Surplus 1.1 2.7 1.9 13.4

Capital Expenditure 3.5 7.7 11.4 12.5

Overall Balance -2.4 -5.0 -9.5 0.9

Financing:

Grants 0.1 0.1 0.5 0.7

Foreign Loans 1.8 6.0 6.5 6.5

Domestic Borrowing 1.0 - 3.0 -

Change in GovernmentBalances (increase - -) -0.5 -1.1 -0.5 -8.1


24. Since 1969/70, a small surplus on current account has emerged andhas provided a modest contribution to the financing of the capital budget.In 1972/73 and 1973/74, these surpluses were E 2.7 million and E 1.9 million,respectively. With exceptional sugar prices in 1974/75, a current surplusof at least E 10 million should be realized if current expenditure is keptwithin budget appropriations. The present budgetary situation will increaseGovernment's savings performance from just one percent of GDP in 1971/72 toabout 7 percent of GDP in 1974/75. In the future, the contribution from therecurrent to the capital budget is expected to increase.

25. So far, the bulk of capital financing has had to be met from foreignassistance, particularly from the UK which has traditionally been Swaziland'smajor donor. The Government has been successful in diversifying its externalassistance sources, and aid is now being received from several other bilateraland multi-lateral donors. The average annual level of aid between 1972/73to 1974/75 was $10 million, as compared to $4 million between 1969/70 and1971/72. Domestic borrowing has so far been negligible in the financing ofdevelopment. In 1973/74, through the facilities of the Monetary Authority,Government borrowed E 3 million. Increased borrowing from the domesticmarket should become a more regular feature of the Government's future mobi-lization of resources.

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Financial Institutions

26. In recent years, the Government has taken a number of actions inthe monetary and fiscal fields. It has established some new financial insti-tutions, as well as strengthened existing ones, with a view to mobilizingadequate domestic resources for development. Under an agreement with theRepublic, it established a Monetary Authority in April 1974, and created itsown currency with the full backing of a special rand deposit with the SouthAfrica Reserve Bank; both the lilangeni-aiid rand are now legal tender inSwaziland.

27. This monetary arrangement is somewhat similar to that whichexisted in the francophone countries in West Africa. Although it limitsthe scope for credit management normally available to a fully independentmonetary authority, it has the advantage of supporting the stability of thecurrency and the capacity of the country to borrow abroad. Additionally,it retains for Swaziland the attractiveness of the Rand Monetary Area toforeign private investment. To a large extent, recent developments in themonetary and fiscal fields could be considered as part of a learning processin the complex area of monetary management.

28. Prior to the establishment of the Monetary Authority, interestrates moved automatically with those in the Republic. The Monetary Authorityhas instituted an independent interest rate policy, and though the structureof current interest rates is close to that in South Africa, the rates them-selves have been fixed at a higher level. It has also assumed responsibilityfor the issue of Government bonds and treasury bills, and although it has nofacilities yet for discounting commercial paper, it has recently collaboratedwith the commercial banks in financing the country's cotton harvest.

29. Also, during 1974, the two foreign commercial banks were locallyincorporated with 40 percent Government shareholding. They are now subjectto local requirements for minimum capital and liquid assets, and to governmentsupervision through a Registrar of Financial Institutions which is the Mone-tary Authority. In order to increase the contribution of these institutionsto development, legal provision is made for loans under deeds of hypotheca-tion. This would facilitate lending to small Swazi entrepreneurs who wouldnormally be unable to meet the conventional requirements of collateral forloans from commercial banks. In addition, the Swaziland Development andSavings Bank (SDSB), formerly the Swaziland Credit and Savings Bank, wasreorganized, and the Swaziland Royal Insurance Corporation was establishedwith 51 percent government ownership, and a monopoly of insurance business inthe country. A National Provident Fund, which will initially cover only paidemployees, has recently been established, and will begin operations during1975.

30. The banking system consists of two commercial banks, the SDSBand the newly created Monetary Authority. Under the current monetary system,no reliable information is available on the total amount of currency incirculation and hence on the money supply, and in general it is too early tomake any positive assessment of the working of the new system. Between 1971

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and 1973, deposits with the banking system increased from E 26.9 million toE 34.3 million, and rose by nearly 50 percent to E 48.1 million during 1974.This mainly reflected increased government balances since the large foreigncompanies are said to keep only working balances in the country, but savingsdeposits, which remained at E 7.2 million between 1972 and 1973, rose to E 8.3million at the end of 1974. Since 1972, deposits have remained substantiallyhigher than credit. A substantial portion of these surplus funds which wereplaced previously with head offices in UK might now remain within the randarea, in particular, in South Africa.

Table 12: CREDIT FROM AND DEPOSIT WITH THE BANKING SYSTEM(Million Emalangeni at end of the year)

1971 1972 1973 1974

Credit 25.1 18.4 22.3 28.7

To Government 1.4 1.1 0.9 -To Private Sector 23.7 17.3 21.4 28.7

Deposits 26.9 31.5 34.3 48.1

Current 10.3 13.3 12.0 15.2Time 10.1 11.0 15.1 24.6Savings 6.5 7.2 7.2 8.3


31. Loans and advances to businesses fell from E 16.4 million in 1971 toE 14.4 million at the end of 1973, but increased to E 20.4 million at December,1974. Although this reflects some seasonality, particularly in agriculture,over 40 percent of this increase in loans and advances was accounted for bythe manufacturing sector.

C. Balance of Payments and External Debt

32. The latest available data on external payments relate to 1970/71and to the current account only; no official estimates of the capital accounthave ever been made, and even estimates of the invisible items appear unrelia-ble. The improvement in the coverage and reliability of merchandise tradeshould be given priority, not only because adequate trade statistics areessential in the formulation of economic policy, but also because reportedmerchandise trade forms the basis on which about 45 percent of governmentrevenue is determined under the Customs Union Agreement.

- 17 -

33. The Government's trade and payments policies are basically similarto those of South Africa, though somewhat more liberal in application withrespect to certain outward capital transactions. As regards transfers offunds into Swaziland from outside the Rand Monetary Area, share capital isnot restricted, whereas prior permission is required and is usually routinelygranted for loan capital. With respect to outward remittances, dividendsand interest payments are freely transferable, subject to withholding taxesof 15 percent and 7 percent, respectively. Capital which has been previouslyimported from outside the Rand Monetary Area, including accrued interest, canalso be freely repatriated.

Table 13: SUMMARY CURRENT BALANCE OF PAYNENTS,1971/72-1973/74

(Million Emalangeni at current prices)

1971/72 1972/73 /1 1973/74 /1

Merchandise Exports 57.5 65.8 88.2

Merchandise Imports -49.2 -57.0 -72.4

Non-Factor Services, net -6.1 -6.7 -9.5

Factor Income Payments, net -8.5 -9.8 -12.0

Transfers, net 8.8 9.5 10.0

Current Balance 2.5 1.8 4.3

/1 Estimates.


34. Swaziland has an open economy, and has always earned a favorablebalance on its merchandise trade. In 1973/74, the ratio of exports to GDP was60 percent, while that of imports was 50 percent. Exports consist mainly ofprocessed agricultural produce, forestry products and minerals. During thelast three years, export earnings increased at 33 percent per annum as againsta rise in imports of 22 percent. These favorable results were due largely tohigher prices for exports, in particular sugar and wood pulp, whose share oftotal merchandise exports amounted to nearly 60 percent in 1974. In recentyears, exports increased in real terms at about 8 percent annually. Thecountry's export markets are well diversified; about three quarters of merchan-dise exports are destined outside the rand area to North America, Europe andJapan. Since a large portion of the country's imports originates in SouthAfrica, Swaziland probably contributes substantially to the net foreignexchange earnings of the rand area.

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Table 14: MERCHANDISE EXPORTS, 1972-74(Million Emalangeni)

1972 1973 1974 /1 1974

Sugar 19.2 18.9 44.1 33.9

Wood pulp 11.1 15.3 31.3 24.1

Iron Ore 9.3 7.9 12.3 9.5

Asbestos 4.6 6.7 6.0 4.6

Uncanned Fruit - Citrus 3.5 3.9 7.7 5.9

Meat and Meat Products 2.2 3.7 7.5 5.8

Canned Fruit 1.8 2.8 2.7 2.1

Other 10.1 13.6 18.4 14.1

Total 61.8 72.8 130.0 100.0

11 Provisional.


35. Imports in real terms have increased in the last several years atabout 7 percent per annum as against a corresponding rise in import prices of13 percent. Generally, the structure of imports has not changed significantly.Between 1971 and 1974 there has been a steady upward trend in the share offuels and lubricants in total imports, increasing from 8 percent to 13 percent,while that of machinery and transport equipment fell from 26 percent to 21 per-cent.

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Table 15: MERCHANDISE IMPORTS, 1972-74(Million Emalangeni)

1972 1973 1974 /1 1974

Food & Live Animals 4.7 5.8 7.6 8.9Beverages & Tobacco 2.7 4.4 5.1 6.0Crude Materials 0.5 0.9 0.8 0.9Fuels 6 Lubricants 4.3 7.3 11.0 12,9

Animal & Vegetable Oils & Fats 0.3 0.3 0.4 0.5

Chemicals 5.9 6.7 10.4 12.2

Manufactured Goods 9.4 11.0 12.6 14.7

Machinery & TransportEquipment 13.8 16.2 17.9 20.9

Miscellaneous Manufactures 7.3 7.0 9.7 11.3

Other 4.4 6.9 10.0 11.7

Total 53.3 66.6 85.5 100.0

/1 Provisional.Source: Statistical Appendix, Table 3.4.

36. The main outflows in the current account of the balance of paymentsconsist largely of dividends from the modern sector enterprises, in additionto non-resident charges for such services as insurance and head office manage-ment charges. These payments have been almost offset by government transferreceipts. No direct estimates of remittances of Swazi workers in SouthAfrica are available. However, they may be of the order of E 1 to E 2 million,which does not weigh very heavily in the invisible receipts.

37. The external public debt (disbursed) stood at US$39 million atDecember 31, 1974. Debt service payments in 1974 amounted to US$4.2 million,representing less than 5 percent of merchandise exports. So far, the country'sexternal assistance has been on soft terms. At the end of December 1974,the average terms of debt outstanding were 2.1 percent interest repayable over29 years, with a grant element equivalent to about 62 percent after discountingat a rate of 10 percent.

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IV. SECTORAL DEVELOPMENTS

A. Agriculture

38. Relative to its size and population, the country has an adequatesupply of land and water resources which are only partially exploited. Theclimate varies between temperate in the highveld (annual rainfall 1,000-2,250mm) to almost tropical in the lowveld (rainfall about 700 mm.) Together,these endowments represent a considerable potential for agricultural develop-ment. About 65 percent of the total land area of 1.7 million hectares ispresently used for grazing, and 20 percent is considered suitable for inten-sive agriculture. However, only about one half of this latter area ispresently under cultivation. Currently, about 25,000 hectares are irrigatedand an additional 15,000 hectares could probably be brought under irrigation.About 6 percent (mainly mountainous slopes) of the total land area supports athriving forestry industry.

9. The agriculture sector represents a severe case of economic dualism.There are 790 foreign owned estates and farms (designated individual tenurefarms or ITFs) averaging about 800 hectares each and covering about 45 percentof the total land area. The growth of output on these farms has been about5 percent per annum; only about one half of these farms are economicallyexploited, but their output accounts for 60 percent of total output of theagricultural sector. The rest of agriculture consists of about 39,000 small-scale Swazi Nation Farms (SNFs) with an average size of less than 3 hectares.About 70 percent of the population resides on Swazi Nation land, while aboutone half of the population depends directly on traditional agriculture fortheir livelihood. Adequate data on traditional production is not available,and it is assumed that it has just kept pace with the increase in population.

40. Sugar is the main crop on ITFs, accounting for almost 35 percent oftotal merchandise exports in 1974. Other important crops produced on ITFs arecotton, citrus, and pineapples. The crops produced on ITF farms, togetherwith forestry products, are largely exported after processing, and so agricul-ture provides the basis for most of the manufacturing activity in the country.Production on Swazi farms is mainly for subsistence; the principal crops aremaize, groundnuts, sorghum, beans and potatoes. The favorable prices of cottonin recent years have been an incentive to its increased production in thetraditional sector. In addition, about 75 percent of total livestock productionis carried out on SNFs.

Tenure and Productivity

41. The organization of agriculture under these two distinct systemsof land tenure (namely, the ITFs and SNFs) has a long and controversialhistory, and derives from the land concessions made to Europeans in the 19thcentury. Under a partial settlement of the problem in 1907 (the ConcessionProclamation), less than 40 percent of the land remained under Swazi control.The issue of foreign ownership and control of land however has not been fully

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settled yet. Various programs have been formulated over the years to recoverland for redistribution to the Swazi nation, the most recent of these being aUK grant of US$3.6 million in 1970 to finance a land purchase program overa 5-year period. Because of the reluctance of expatriate owners to sell land,the program has not been as successful as envisaged. In 1974, the Governmentenacted legislation to tax idle land, but this measure has not been widelyimplemented. Thus its effects on the land repurchase program, or on theprospects for more extensive cultivation of foreign-owned land, cannot yet begauged.

42. One of the main objectives of government policy is to acceleratethe change from traditional subsistence to cash crop production. The ITFsare highly mechanized, and use available modern technology; output per acreis high. However, some of these farms are not optimally organized; for exam-ple, arable land is left idle because the owners (many of whom are absenteelandlords), have little need of increased incomes. The SNFs, on the otherhand, are run largely on traditional lines, that is, employing family laborand draft animals, and producing mainly for subsistence. The small size ofSNFs, their low productivity, and the lack of adequate marketing services,have combined to hamper the production of a marketable surplus of food cropson SNFs. According to estimates by the Agricultural Experimental Station,yields of many crops could be increased from between 40 percent to 100 percent;in particular, the yield of maize, the staple, could be increased by about60 percent if modern production practices were followed.

43. The general standard of animal husbandry is low; cattle-raisinghas not yet become a major economic activity on ITFs. The offtake for cattleis about 10 percent per year. The major breed is the native Ngemi, a slow-growing animal that is usually marketed quite late, at about five years of age.Moreover, these animals graze on communal pastures of native grasses, with nosupplemental feeding. Pastures in certain areas are apparently overgrazed,but the general problem of overgrazing in the country might be more relatedto the present system of land ownership and control, and the low level ofanimal husbandry. On some ITFs, modern breeds consisting of crosses of Ngemiwith Brahman, Simmertaler, or Friesian, are being reared with good results.The Government is trying to spread the use of these crosses to SNFs, and toimprove production by establishing cattle-fattening ranches. Small farmersare being encouraged to use these ranches, and can arrange for delayed paymentfor this service until the cattle are sold for slaughter. The weight gain ismuch higher on the fattening ranches than on SNFs, primarily because more feedper animal is available through rotation grazing; concentrated research shouldbe carried out to improve the quality of grasses since the native grass isoften stifled by bush growth.

Marketing

44. There has been little development of marketing services for theSwazi farmers, particularly for crop production. Marketing of production onITFs is highly organized and is vertically integrated. In the case of sugar,the production, processing, and marketing is carried out by the SwazilandSugar Association under the authority of the Sugar Act, 1967, which incorporates

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the Sugar Industry Agreement and the Swaziland Sugar Association Constitution.In order to produce sugar, a farmer must obtain a production allotment fromthe Quota Board of the Sugar Association. Until the end of 1974 when thesespecial quotas terminated, about 90 percent of raw sugar production wasmarketed in Great Britain, Canada, and USA at prices averaging much abovethose of the world free market. However, Swaziland has been allocated 160,000metric tons under the recent agreement between EEC and ACP countries at aboutL 260 equivalent per ton c.i.f. (London) in 1975. Prospects for new quotasin the Canadian and US markets are unknown at this time.

45. Citrus production has increased in recent years as more and moretrees have reached the bearing age. Marketing is handled by the CitrusMarketing Board which is affiliated with the South African Cooperative CitrusExchange. Production and processing of most of the pineapple crop is con-trolled by a single corporation. Rice and tobacco are marketed through wellorganized cooperatives, while maize and maize meal are marketed by theSwaziland Milling Company which enjoys a monopoly in this trade. It is alsothe main commercial source of milling services, pesticides, and fertilizersfor Swazi farmers.

46. There are at least four possible outlets for marketing cattle:Government-owned sales yards, private auctions, the Swaziland Meat Corporation,and various outlets in South Africa. About 60,000 head of cattle, or about10 percent of the national herd, are now marketed annually. About half ofthese are slaughtered by the Swaziland Meat Corporation which operates a verymodern slaughterhouse and exports most of its products, mainly to UK. 1/ Mar-keting through government sales yards has declined in recent years becauseadequate price and other pertinent information have not been made available toproducers. Sales are by auction, but the producer reserves the right torefuse the highest bid. The Swaziland Meat Corporation is committed to buyall cattle at a floor price, but must compete with other buyers at time ofsale.

47. For many years, cream collection stations were operated by theGovernment, and processing was done at a local creamery which has recentlyclosed, due in part to too low a volume of operations. Currently, cream isshipped to South Africa for processing. Surplus fluid milk is processed ina Mbabane dairy plant which has been taken over by a recently appointed DairyBoard.

Institutions

48. The Ministry of Agriculture appears to be well structured, thoughseveral vacancies exist for technical and professional personnel, most ofwhich are usually filled by expatriates. There are four regional extension

1/ In September 1974, the EEC imposed a ban on beef imports; although theban has since been lifted, the required payment of the import levy ledto representations from ACP countries. The EEC has recently decidedto refund 90 percent of the import levy to beef-exporting countries.

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and veterinary service offices which are organized to serve 28 subdistricts.Out of a total extension staff of about 340, about 70 percent are directlyconcerned with animal health and disease control; these include veterinarians,veterinary assistants, and animal health specialists. The remaining positionsare assigned to agricultural and home economics extension. Thus there are150 farms per extension employee concerned with animal health, as comparedwith 400 farms per employee concerned with production and home economics.

49. Generally, the Ministry has not had much impact on the productionof Swazi farmers. (The ITFs would need little, if any, technical assistancefrom the Ministry). This lack of effectiveness is partly explained by theimbalance in services to animal health and crop production. Despite theemphasis given to animal health services, in 1973 about half as many cattledied, mainly from disease and malnutrition, as were slaughtered. Much of theHealth Group's time is devoted to the operation of dip tanks as a measure tocontrol ticks. A review of the extension service to make it more effectiveshould be considered a priority.

50. Although a Department of Cooperatives was established in theMinistry of Agriculture in 1963, the cooperative system, on a national scale,is not well developed. The Department was transferred to the Ministry of Com-merce in 1973, possibly because several other types of cooperatives (e.g.,handicrafts and furniture-making) are promoted by this Ministry, but itsperformance has apparently not improved much since then. The Department istrying to support small farmer credit through savings and credit cooperatives.About 20 of these now exist, while another 5 are being formed. In general,Swazi farmers use little credit; one probable reason is that it is customaryfor them to keep sizable amounts of cash in their homes. Moreover, untilfarmers are motivated to use modern inputs and to employ modern farmingtechniques to improve their production, no substantial increase in the useof credit is likely to take place.

51. The main formal source of credit for Swazi farmers is the SDSBwhich has a main office in.Mbabane and 10 field offices. The expansion ofcredit to small Swazi farmers has generally been limited by the collateralrequirements of the SDSB and farmer attitudes towards the usefulness ofcredit. To improve this situation, SDSB in 1973 allocated US$750,000 outof USAID funds to be used exclusively for credit to small farmers, but lessthan 10 percent of this amount has so far been utilized. A program ofunsecured credit to selected farmers is to be instituted on an experimentalbasis, and its results are to be closely monitored.

52. Training at the diploma/degree levels in agriculture is offeredat the Swaziland campus (at Luyengo) of the University of Botswana, Lesotho,and Swaziland (UBLS). About 10 Swazis complete the Diploma in Agricultureeach year. The B.Sc. degree program is only now getting started. A fewstudents are studying towards degrees in agriculture at institutions abroad.This output falls short of the demands of the Ministry of Agriculture, whichloses most of the graduates to the private sector. More basically, theproblems of agricultural training stem from the deficiencies of rural schools,

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and the absence of countrywide training programs in science and vocationalsubjects, including vocational agriculture. As a result, there is a shortageof suitable candidates for higher-level training in agriculture. The Govern-ment has taken constructive steps to remove these deficiencies in the educa-tional system through an expanded program of vocational education, includingthe establishment of rural training centers throughout the country.

53. The responsibility for agricultural research was transferred fromthe Ministry of Agriculture to UBLS in 1971. There is concern within boththe Ministry and the UBLS that the liaison between the research and extensionservices has deteriorated since this transfer has taken place; the importanceof an effective interchange between these two services cannot be over em-phasized, and early remedial action is essential. The research program appearsadequate to support rapid agricultural development. Research on improved agri-cultural practices has shown that an increase in yields from between 50 percentto 100 percent over those presently achieved on SNFs is possible; these higheryields are similar to those now obtained on the ITFs. At Luyengo, the Facultyof Agriculture's beef herd is producing market weight cattle after two yearsas compared to five years for native cattle, and its top dairy cows areproducing on average mDre than five times the amount of milk produced bylocal cattle.

Development Program and Prospects

54. Government policy on agriculture as outlined in the NDP is correctlydirected primarily toward helping Swazi farmers make the transition from sub-sistence to semi-commercial and commercial farming. According to the NDP,achieving this objective will require:

(i) the continued promotion and expansion of the program forconsolidation of land holdings, resettlement, and creationof basic physical infrastructure in rural areas;

(ii) strengthening the framework of basic services, particularlyagricultural and animal husbandry extension, crop and live-stock marketing, credit facilities, and producers' co-operatives;

(iii) increasing the marketed production of primary food and cashcrops (especially maize, cotton and tobacco) by Swazi farmers,primarily by raising crop yields per acre and by introducingmore farmers to cash farming;

(iv) improving animal husbandry practices and increasing animalproduction through greater extension efforts, better marketingarrangements, intensification of production through improvedbreeding and supplementary feeding, and gradual integrationof these more intensive methods into the Swazi farming system;and

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(v) raising the annual offtake from the national herd from thepresent 10 percent to 15 percent by 1978 in order to increasethe value of livestock production and to bring about areduction in total livestock numbers closer to the country'soverall carrying capacity. If this objective is achieved,an expansion of the area available for arable cultivation(including suitable fodder crops) will be possible.

55. Generally, the detailed programs are well geared to achieving theforegoing objectives, but their implementation will demand a considerableperformance by the Ministry whose recruitment of technical personnel will haveto be expanded. The monitoring of these programs would be facilitated bybetter quantification of their expected achievements.

56. The amount allocated to government investments in agriculture in1974/75 was R 2.1 million, or 17 percent of total development expenditure.This program is supported by the Ministry's recurrent budget of about R 2.0million, representing about 6 percent of total recurrent expenditure, but inthe light of the Government's improved financial position, increased appropria-tions for agricultural development should be considered. About three fourthsof development expenditure for agriculture was met by external financing,mainly from the UK and the USA. Also, under various UNDP-administered programs,substantial technical assistance has been provided. The programs now supportedthrough international assistance may not have the highest priority. In recentyears, most funds have been utilized for soil conservation, including thepurchase of heavy equipment, and the purchase of land from ITFs. Externalassistance would now be better directed towards the strengthening and expansionof more comprehensive projects such as those being implemented in the RuralDevelopment Areas (RDAs).

57. Implementation of the investment programs for agricultural develop-ment has for many years fallen short of planned targets. In 1973/74, forexample, only about one half of planned investment was realized. However,the situation improved somewhat in 1974/75. The shortage of technical man-power is the main factor adversely affecting the Ministry's implementationcapacity.

58. The economic outlook for agricultural growth and development isvery favorable. The area of cultivable land can be doubled; irrigated landcan be increased by about 50 percent; and with improved cultivation and manage-ment practices, yields from a variety of crops on SNFs can be increased. Inaddition, traditional markets in South Africa, Europe and North America, areexpected to remain profitable. The favorable terms under the recent Conven-tion between EEC and ACP countries is likely to provide an incentive forincreased sugar production, including the possible establishment of a thirdsugar mill. But any decision to increase production, including the establish-ment of another sugar mill should be carefully examined in the light of worldprospects for production and prices over the next 5 to 10 years. Beef pricesare expected to continue to rise in line with their long-term market outlook,and favorable price projections for forestry products should spur an expansionof this sector. Under these circumstances, the output of ITFs over the nextfive years is expected to grow by at least 5 percent per annum.

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Table 16: PRODUCTION ON INDIVIDUAL TENURE FARMS1972/73 AND PROJECTIONS 1979/80

(Million Emalangeni)

1979/80 1979/801972/73/1 (1972 prices) (current prices)

Sugar 9.2 13.9 28.5Citrus 4.5 6.2 11.5Cotton 1.7 2.9 6.7Rice 0.6 0.8 2.4Maize 0.4 0.9 1.4Potatoes 0.3 0.8 2.3Other 0.5 1.2 2.4

TOTAL 17.2 26.7 55.2

/1 At prices received by producers.


59. The Government's program and projects in agriculture should befully directed towards the modernization of SNFs. They should aim at over-coming a number of constraints: an agricultural extension service that isinadequately staffed; the lack of motivation of, and information to, farmers;an inadequate design of development plans; a shortage of technical andmanagement personnel; the slow pace of decision-making under the tenure systemof SNFs; the low level of rural education; and the lack of adequate monitoringof agricultural projects.

60. Upgrading and expanding the agricultural extension service should begiven top priority. When this is done, such programs as market development(including the establishment of central markets and a market price and generalinformation system), credit, and storage will need to be instituted on a con-sistent basis before any significant growth can be achieved. The Governmentis now in a sufficiently strong financial position to commit substantialinvestments and to promote a wide-ranging program in the traditional sector.In the early stages of implementation, the Government would need to employadditional expatriate technical personnel, but should at the same time inten-sify its recruitment and training of local counterparts.

61. The major project promoted by the Government since 1966 is the estab-lishment of rural development areas which approximate the modern concept ofintegrated rural development projects. Because of the slow build-up of plan-ning and implementation capacity, and initial caution of the National Council,results so far have been modest. However, in the Northern RDA where most ofthe inputs have been concentrated so far, output and yields of a number ofcrops have improved significantly, and farmers' incomes have increased. Thereis evidence that results from this RDA have motivated farmers in other areas

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to seek participation in the program. One of the main weaknesses of the pro-gram, however, is the lack of an effective system for monitoring inputs andresults. The measurement of the pay-off of the program by a better systemof accounting cannot be too strongly recommended; the results would be ofcritical importance to the planning of the other areas now being brought underthe scheme.

62. The Government is presently planning expansion of the above program,distinguishing 'High Input Rural Development Areas' from 'Minimum Input RuralDevelopment Areas'. The essential difference between these two types relatesto population density and resource base or physical development potential;and consequently the range of social services, for example, schools, ruralhealth, water development, which could be provided most economically. Inaddition, national projects aimed at supporting the total rural developmenteffort are to be launched in the areas of milk and dairy production; beefproduction support by an expansion of cross breeding; improvement in marketingfacilities; support in poultry production; and the establishment of a feed mill.

63. The program is a comprehensive one which offers considerable scopefor the direction of long-term agricultural investments, but its effectiveimplementation will require a more concrete design of projects and a cost-benefit analysis of each component. Consideration should also be given to theestablishment of a poultry and egg collection center, and an oil-seed crushingplant. Additionally, high yields of soybeans and sunflower seeds could beachieved with proper management, and irrigation development needs furtherstudy in order to determine its economic potential.

64. It needs to be emphasized that a Swazi Nation Development programshould first be successful in improving the production of primary products,crops, and livestock, before large investments are committed in processingplants and marketing units. In the initial stages, it may be necessary tosubsidize inputs used by small farmers, and to support prices they receivefor their produce.

B. Industry

65. The modern industrial sector consists largely of mining (asbestos,iron ore, and coal) and processing of agricultural and forestry products(sugar, canned fruit, wood pulp). These sectors accounted in 1973/74 forabout 25 percent of GDP, 17 percent of modern sector employment, and 70 percentof merchandise exports. In recent years, tourism has emerged as a rapidlygrowing sector, which has accelerated the increase in modern sector employment.

Mining

66. Until about 1969, mining was the dominant sector of the modern econ-omy; since then, it has been superseded by sugar and forestry products. Therehave been no new mining operations of any significance in recent years. Infact, for some years no new concessions were granted for mineral exploration,despite several applications. In 1973, mining accounted for 5 percent ofmodern sector employment, 8 percent of GDP, and 20 percent of merchandiseexports.

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67. The Government has recently formulated a more clear-cut miningpolicy, including taxes on unutilized mineral concession rights, capital gainson mineral rights, and transfers of mineral rights. These tax measures werenot designed primarily to generate revenue, but rather to discourage the hold-ing of inactive concessions. A number of concessions have recently been grant-ed, and mineral exploration is continuing.

68. Steps have also been taken, in line with policy set out in the NDP,to effect greater control over the large modern sector. The Swazi NationalCouncil has acquired a shareholding of 40 percent and 20 percent, respectively,in the asbestos and iron ore enterprises. Additionally, a minerals committeehas been set up to advise on matters relating to the development of the miningsector.

69. The production of asbestos started in 1939 at Havelock in the north-west of the country, and was the first industrial operation of any significancein the development of the modern economy. At the current rate of productionof about 35 million tons, the existing mine is expected to be exhausted inabout ten years. There are, however, sufficient exploitable reserves in thevicinity of the present mine to extend the life of the industry. These re-serves are held under concessions granted to another company, and arrangementshave not yet been worked out for their exploitation either by the existingmining enterprise or by the concessionaires.

70. Iron ore has been mined at Ngwenya along the western border since1964, and exported almost exclusively to Japan under a long-term contract.The average level of production has been steady at about 2.2 million tons perannum since 1969. The reserves of the higher/medium grade ore of this mineare expected to be exhausted in 1978. There are about 265 million tons ofknown reserves of lower grade ore, and a further 400 million tons with evenlower potential in other parts of the country. The exploitation of theselow-grade deposits under present technology is not profitable, even with theincrease in international prices projected until the first half of the nextdecade. A beneficiation survey being carried out includes the feasibility ofexploiting these resources by pelletizing; the results should provide aclearer picture of the future of the industry.

71. The country's coal reserves are concentrated in the east, and areestimated at between 200 and 400 million tons. Production is presentlycarried out by a small mine at Mpaka, and has increased steadily from 115,000tons in 1969 to about 150,000 in 1974. Domestic consumption, mainly by therailways, accounts for about one half of production, while exports are mainlyto Kenya.

72. Most of the reserves are low volatile bituminous coal, with smallerquantities of semi-anthracite or anthracite coal. Large scale exploitationof the substantial low quality deposits is most feasible in the production ofpower by specially designed station boilers. The construction of such astation to generate electricity for export to South Africa has been underconsideration by the Government and the South African authorities for sev-eral years.

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73. Other prospects for increased coal production specifically for exporthave been enhanced since the energy crisis. Markets for specially preparedand selected coals (low ash, low volatile, and blend coking coals) are con-sidered favorable in Europe and Japan. There is optimism in the industrythat the opening of at least three mines in the 1980's would be feasible,and an export level of several million tons per year is envisaged. Produc-tion on this scale would imply a substantial investment in social and phys-ical infrastructure, since there are no existing township facilities near thepotential mining areas. Transport requirements could be met by the presentrailway on which the iron ore is carried to Can-Phumo (formerly LourencoMarques), or by the construction of a southern link to the South African railwaysystem which connects to Richards Bay. The recourse to one or both of theseport facilities would depend on the future of the iron ore industry, and thesize of the potential export markets. The Government should give early consid-eration to the coordination needed for the successful implementation of aproject of this magnitude.

74. The impact of other minerals on the sector is currently insignificant.The favorable price of gold in recent years has led to a reassessment of oldmines, and to new prospecting in various parts of the country. Some industrialminerals (barytes, kaolin, silica power, pyrophillite) are also being mined ona small scale.

Table 17: MINERAL PRODUCTION 1972-1973 AND PROJECTED 1980(Million tons)

1972 1973 1980

Asbestos 36.0 36.9 35.0Iron ore 2.0 2.1 -Coal 0.1 0.1 0.5


75. Present indications are that mining production will decline by 1980.Production of asbestos is projected to remain at about its present level, whileexploitable iron ore deposits would be gradually depleted if the exploitationof the substantial lower grade reserves does not become profitable. The clos-ing of the iron ore mine would result in a loss of about 10 percent of thecountry's present foreign exchange earnings and the displacement of about500 workers or 17 percent of direct employment in the mining sector. Withrespect to coal, it is assumed that with favorable export prospects, probablyone coal mine could be opened by 1980, with a possible total production levelof about 500 thousand tons. In addition, if plans for the construction of athermal power station of 250 m.w. should materialize, an additional demand for400,000 tons would be created.

76. The Government should consider measures to encourage further mineralexploration in view of the likely decline of the mining sector during the nextdecade. Under the present arrangements, prospecting rights do not necessarily

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confer on the concessionaire the exclusive right to exploit any discoveries;this uncertainty could probably discourage investors from committing the largeinvestments necessary for mineral exploration.

Manufacturing

77. The structure of the manufacturing sector manifests the same dicho-tomy as that existing in agriculture, and derives from the establishment of afew modern agro-industries in the processing of agricultural produce for ex-port. The two largest agro-industries are those for sugarcane and wood pro-cessing, which account for over one half of total merchandise exports. Threeother important agro-industries are meat processing, cotton ginning, and fruitcanning, which together contribute about 10 percent of total merchandise exports.Altogether, these industries account for over 90 percent of value added in themanufacturing sector. Cotton seed is presently exported for processing, butthe establishment of a crushing plant could probably become an economic invest-ment with the supplementary production of soybean and sunflowers. The rest ofmanufacturing is in its infancy and accounts for less than 10 percent of valueadded in total manufacturing, but conditions appear favorable for its expansion.However, because of the country's small size and limited purchasing power,the development of this sub-sector on any significant scale must be largelyexport-oriented.

78. Value added from total manufacturing is currently about 15 percentof overall GDP. Employment in these industries is estimated at 7,400 persons,or 13 percent of total wage employment. Between 1967 and 1973, employmentincreased at an annual rate of 8 percent, including an increase of 13 percentduring 1973, and it is estimated that industrial production grew at a similarrate.

Table 18: VALUE ADDED IN MANUFACTURING

(Million Emalangeni Current Prices)

1967/68 1970/71 1971/72

Food and Beverages 3.5 3.7 5.9Wood and Wood Products 2.6 4.7 7.0Other 0.6 0.7 0.9

TOTAL 6.7 9.1 13.8


79. Government's industrial policy outlined in the NDP aims to promoterapid industrial growth and raise domestic incomes and employment, and toaccelerate the development of local enterprise and management. Two importantinstitutions have been established in furtherance of this policy: The SmallEnterprises Development Company (SEDCO) in 1970 with its training affiliate,the Small Enterprises Promotion Office (SEPO), and the National Industrial

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Development Corporation (NIDCS) in 1971. Together with the development ofa number of financial institutions already referred to (para. 29), and theexpansion of educational and training facilities, the pre-conditions forsustained growth of the manufacturing sector are gradually being established.

80. SEDCO, in collaboration with SEPO, is mainly responsible for thedevelopment of Swazi entrepreneurship. Besides the provision of factoryshells on its industrial estates, SEDCO's facilities include the use of tech-nical workshops, credit, and training and advice to small businesses in finance,accounting, quality control, and management. International technical assistancehas played an important role in SEDCO's development, and results so far havebeen very encouraging. Under this program, small businesses have been success-fully launched in handicrafts, ceramics, furniture, clothing, leather products,and light engineering.

81. Given the dominance of the foreign sector in the Swazi economy, therole of SEDCO is very limited in terms of its contribution to output andemployment. Only about 500 persons were directly employed, and total outputin 1974 was only about R 1 million. More importantly, 70 Swazi entrepreneursare being provided with technical and financial assistance in the developmentof their businesses. The expansion of SEDCO's program is in line with policydirected towards the progressive localization of managerial and technical posi-tions in the foreign-owned private sector. In this way, an effective step isbeing taken to achieve the objectives of greater control of, and participation,in the economy by Swazis.

82. The main role of the NIDCS is the identification of investmentopportunities, the provision of physical facilities and financial assistanceto enterprises, and the participation in selected joint ventures through loanor equity capital. Capital expenditure is expected to increase from E 1 mil-lion in 1974/75 to E 3 million in 1975/76. Equity in successfully establishedenterprises is to be eventually resold to the public in order to promote widerlocal ownership and control of the manufacturing sector. In the absence oflocal entrepreneurship on any but the most modest scale, NIDCS relations arelargely with foreign enterprises. During its early years, the effectivenessof the NIDCS was hampered by management. problems, but these are apparentlynow resolved.

83. A number of factors are favora;ble to industrial development. Theseinclude the investment opportunities offered by membership in the Rand MonetaryArea and the Southern Africa Customs Union, generous investment incentives, andthe country's political stability and good industrial relations record.

84. The outlook for manufacturing is favorable. Plans are in hand forthe expansion of sugar and canned fruit production; the increase of recentyears in the production of meat and meat products is expected to be sustained,and value added in food and beverages is estimated to increase at about 7percent per annum over the next several years. A similar expansion in woodpulp production is envisaged in line with the favorable market prospects

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during the rest of the decade, indicating a growth rate in value added ofabout 8 percent annually. The rest of manufacturing is estimated to achievea 12 percent rate of growth in value added, partly because of its currentlylow base, but also because of the expected rapid increase in the establishmentof enterprises under both NIDCS and SEDCO supported programs. Overall GDP ofthe manufacturing sector is estimated to increase at 8 percent up to 1980.

Table 19: VALUE ADDED IN MANUFACTURING 1971/1972 AND PROJECTED 1980/81


Annual Growth1971/72 1980/81 Rate %(In 1971/72 prices)

Food and Beverages 5.9 10.7 6.8

Sugar (4.1) (6.9) 6.0Other (1.8) (3.8) 8.7

Wood and Wood Products 7.0 14.0 8.0

Other 0.9 2.5 12.0

TOTAL 13.8 27.2 8.0


Tourism

85. In recent years, tourism has become one of the most dynamic sectorsof the economy. The number of hotel visitors more than doubled between 1969and 1973, increasing from 43,000 to 89,000, a growth rate of 20 percent perannum. An additional 12,000 visitors were estimated to have stayed in variouscaravan parks and camp sites. Correspondingly, the number of hotel beds avail-able increased from about 900 in 1969 to 1,550 in 1973, a growth rate of 15 per-cent per annum. Overall occupancy is estimated at 50 percent, and the averagelength of stay is about three nights. There are no official estimates of theearnings from tourism, but substantial leakages of earnings through importsand repatriation of profits are very likely.

86. Government involvement in the development of the tourist sector hasonly been recent. In 1974, legislation was enacted establishing a TourismDevelopment Authority to promote the orderly development of the industry.It might now be timely to carry out the planned survey of the industry, inorder to provide the essential data on which a long-term tourism policy canbe formulated.

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87. Continued expansion of the industry is envisaged over the Planperiod, and forecast hotel capacity is considered adequate to meet this demand.The favorable employment effects of an expanding tourist industry are recog-nized in the NDP. According to the Employment and Wages Survey of 1973, thenumber of persons directly employed is 1,500 or about 13 percent of employmentin services. On the basis of the ratio of employment in hotels to totalnumber of beds, and on the assumption of continued expansion of the industryat a slightly less rapid rate than that of the last several years, the growthin employment is estimated at 10 percent per annum. No strong linkages areevident between tourism and such sectors as agriculture, distribution, transpor-tation and handicrafts, hence indirect employment from any expansion is assumedto be low. On this basis, total employment generated by tourism could beupwards of 4,500 in 1980, or about 20 percent of wage employment in services.As a consequence, it would be necessary to accelerate the training of localstaff at all-levels of hotel operations, in particular supervisory and middlemanagement.

88. The future of the industry, however, raises some possible questionsfor consideration. Tourism has been developed on the basis of the so-called"captive" South African market. South Africans accounted for over 60 percentof all hotel tourists in 1973. If visitors who stayed in caravan parks andcamp sites are included, this proportion would be even higher. AlthoughSwaziland is a country of great scenic beauty, the basis for the thrivingtourist industry seems to lie not in any comparative advantage in topographybetween the two countries, but largely in the casino facilities offered inSwaziland and which are presently not available within the Republic. TheTourist Development Authority is considering plans to diversify facilitiesin order to strengthen the basis for the sustained development of the tourismsector.

C. Education and Training

*89. Literacy is estimated at 30 percent of the adult population. Govern-ment inherited at Independence in 1968 an educational system which was rapidlyexpanding at both the primary and secondary levels. Between 1960 and 1967primary enrollment increased at 8 percent per annum; since 1967, this rate ofenrollment has been maintained, and total enrollment is presently about 70percent o-f the 6-12 age group; universal primary education is expected to beachieved by 1985. The average rate of enrollment growth at the secondarylevel has been a high 15 percent per annum since 1960; total enrollment whichis currently estimated at 20 percent of the 13-17 age group is expected to besustained over the next decade. The general expansion in education has beencreditable. However, these statistics conceal the problem of its low quality,as well as the urgent need for reform of a system not quite in step with thedevelopment needs of the country.

90. The number of primary teachers has increased from 1,630 in 1967 to2,220 in 1974, and has kept pace with growth in the school population (pupil/

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teacher ratio has remained around 38 since 1967). One of the constraints toquality education is the inadequate professional level of teachers. One thirdof the primary teachers are considered in need of additional training. Atthe secondary level, the number of teachers has grown from 232 in 1967 to 611in 1974 (pupil/teacher ratio 21 and 23 respectively). Currently, 20 percentof Swazi teachers in secondary schools are untrained, and more than one halfof all secondary teachers are expatriates. A further problem of the secondaryeducational system is the high teacher turnover (about 25 percent) among ex-patriates (average tenure is less than 2 years). This short length of serviceseverely limits their knowledge of, and familiarity with, the social environmentfrom which most of the school population is drawn, and makes their contribu-tion, though important, less effective than it might otherwise be. TheGovernment should consider direct measures to increase the tenure of expatriateteachers (who will be needed for a long time yet), for example, throughspecial incentives as well as through a more direct recruitment, not onlyfrom traditional sources (UK, USA, South Africa) but from other developingcountries.

91. As regards higher education, the country is a member of the tri-national university system with Botswana and Lesotho (UBLS), the main campusof which is located in Lesotho. Under the UBLS program, Swaziland offersgeneral degree training in arts and science at its Kwaluseni Campus (enroll-ment 175), and specialist training in agriculture to the diploma/degree levelat the Swaziland Agricultural College University Center in Luyengo where about60 Swazis are presently enrolled. Expansion plans call for an enrollment levelin 1980 of more than twice that of 1973.

92. The Governments have recently approved a program for the furtherdevelopment of the University. The basic principles on which this programis formulated relate to the manpower requirements of the three countries,a reasonable mix of teaching facilities, as well as an approximate balancein the number of students on each campus. In addition, the Governmentshave strongly indicated that development costs, particularly recurrent costs,must be strictly controlled. The bulk of development financing is expectedto be secured from external sources.

93. The Swaziland Industrial Training Institute (SITI) is the onlyindustrial vocational training institution in the country. It has an enroll-ment of 370 full-time and about 100 in-service students, and offers instruc-tion in a wide range of vocational and technical skills, as well as insupervision and management.

94. Government policy in education is well directed towards the funda-mental problems of the system, and can be summarized as follows:

(i) to restructure the system so as to de-emphasize its academicorientation; in particular to serve the needs of rural devel-opment;

(ii) to raise the quality, and continue the spread of, education toas much of the population as resources would permit;

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(iii) to develop systems of non-formal training which would reachthe large sections of the population with little or no formaleducation; and

(iv) to serve government policy for the localization of skilledmanpower throughout the economy.

95. The Government is moving purposefully towards the achievement ofthese objectives. It is allocating to education nearly 20 percent of itsrecurrent expenditure and about 5 percent of GDP; under the NDP, educationaccounts for 10 percent of planned public investment. It has securedinternational technical assistance in educational reform and in the expansionof training. If absorptive capacity permits, recent improvements in governmentfinances should be strongly reflected in increased allocations for education.

96. A program is being implemented as part of the country's long-termplan for education development. It is designed to (i) expand and improvetechnical and commercial training; (ii) upgrade and accelerate teachertraining; (iii) expand rural education; and (iv) advance the process ofeducational reform by the establishment of a curriculum development center.

97. Current plans for technical training call for considerable expan-sion in enrollment and in the range of courses offered by the SITI. Theexisting capacity'for full-time students would increase from it§ present levelof 370 to 720 and that for part-time in-service students from 100 to 450 perannum. By the early 1980's, SITI is expected to provide most of the skilland technical needs of the economy.

98. As regards teacher training, the capacity of the William PitcherTeacher Training College, the Government's only teacher training institution,is to be expanded from 200 to 300 pre-service teachers, and from 300 to 360in-service teacher trainees. Allowing for wastage, expatriate replacementand growth, it is estimated that an additional 2,000 of both primary andsecondary teachers will be required over the next ten years; the proposedexpansion of teacher training facilities is expected to meet this demand.

99. Non-formal training for rural development is an important elementof the general expansion in education. Through a network of rural developmentcenters, a wide range of instruction will be offered including agriculture,cooperatives, community development, health, home economics and functionalliteracy. These programs of education and training are eminently suited toSwaziland circumstances; besides reducing the disparity in educational oppor-tunity between rural and urban areas, they will facilitate the implementationof the Government's plans for the development of the rural sector. Theresults of these programs are to be closely monitored, and an expansion isenvisaged, particularly in health training, rural education centers, adulteducation, and in business and commercial training.

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D. Transport

100. The pattern of the transport system is largely determined by thelandlocked character of the country. Its hilly topography makes the provi-sion of adequate transport facilities costly, especially in the west-centralareas where most of the economic activity is concentrated.

101. The system consists mainly of: (i) 2,600 km of roads (190 km ofwhich are paved); (ii) 220 km of a single-line railway used almost exclusivelyfor transporting iron ore to a connecting line of the Mozambique system; and(iii) an international airport served only by South African Airways and DetaAirline of Mozambique, and which is not yet capable of accommodating commer-cial jet aircraft. Road and rail carriers are by far the most important modesof transport. For the most part, exports are dependent on rail transportto Can-Phumo and on to overseas markets, while imports mostly originate inSouth Africa and enter Swaziland almost entirely by road.

102. The planning of transport development and investments is coordinatedby the Ministry of Finance and Economic Planning (MFEP) which considers pro-posals submitted by the Ministry of Works, Power, and Communications (MWPC)and determines modal priorities. The basis for transport planning is acomprehensive transport survey undertaken in 1971 by a University of Natalstudy group, and updated in 1973 for preparation of the NDP. Because ofstaff shortages in MWPC, however, the detailed economic analysis of proposedprojects is done by the Economic Planning Office of MFEP.

103. Traffic growth has been about 3 percent per annum over the period1966 to 1972. Traffic densities are generally low throughout the country;the routes of heaviest freight volumes (over 200,000 tons p.a.) are those in-volving movement of forest products in the northwest, and of sugar productsin the southeast. The vehicle fleet was estimated at 83,000 in 1972, ofwhich about 60 percent were cars. Highway traffic statistics are inadequate,but the Government has recently taken steps to improve the system of trafficcounting which should lead to more effective planning of new road investmentsand of highway development generally.

104. Statistics on railway and air transport movements are graduallybeing improved. In 1973, the railway carried almost 85 percent of the country'stotal freight; three quarters of all railway freight consist of iron ore. Withthe expected depletion of deposits of high grade ore by about 1978, the futureof the railway system is uncertain. Domestic air transport is of only minorimportance, mainly because of the country's small size. The number of passen-gers using the international airport at Matsapha has increased by about 50percent since 1970, but remains comparatively low (about 13,000 passengers in1974), primarily because road facilities between the two main Swazi citiesand South Africa are good; air freight movements have also been low for thissame reason.

105. Government policy in the transport sector is aimed primarily at:(i) stimulating development, particularly of rural areas, by improving trans-port services generally, and expanding the road network in areas of high

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economic activity; and (ii) reducing transport costs for both domestic andinternational movements. To help achieve these objectives, the currentdevelopment program calls for significant investments in road improvements,with smaller expenditures for airport facilities and for railways.

106. The implementation of transport projects foreseen in the NDPdepends heavily on external financing. A 1975 World Bank loan of US$7 millionis helping finance paving of two roads, Tshaneni-Mlaula (39 km), and Helehele-Phyzumoya (43 km), and the African Development Bank is expected to financeimprovement of the road Manzini-Mahamba (92 km). The UK Overseas DevelopmentMinistry will most likely continue financing the District roads program.

107. Among potential investment projects or project components are:(i) paving the Mpaka-Lomahasha road; (2) improving the Phuzumoya-Big Bendroad; (3) improving portions of the Manzini-Nhlangano-Mahamba road; (4) up-grading the Pigg's Peak-Jeppes Reef road; (5) purchase of railway locomotives;and (6) improvements and extensions at Matsapha airport.

108. The Government recognizes the need to strengthen the institutionsconcerned with transport development and operations. In particular, thedeficiencies of the Central Transport Organization (CTO) adversely affectthe quality of road maintenance. With respect to technical manpower, most ofthe senior-level positions in MWPC are held by expatriate staff, as thereare few Swazi nationals with the appropriate academic and professional back-ground. In the Roads Branch for example, the entire professional staffconsists of four expatriate engineers provided under international technicalassistance. With this minimal staffing, the Roads Branch has no designcapacity; all engineering and construction supervision is carried out byconsultants.

V. DEVELOPMENT ISSUES AND PROSPECTS

Economic Growth

109. The Swazi economy has had a good growth record, and the medium-termprospects for a sustained increase in GDP are favorable. Economic growth willcontinue to be export-propelled, and is expected to be accompanied by a sizablebudgetary surplus on current account and a rate of growth in employment ofabout 8 percent annually.

110. Future output growth will be based mainly on an expansion of thelarge-scale enterprises in agriculture (sugarcane, forestry, citrus) and inrelated manufacturing (sugar, wood pulp, canned fruit). While the growth ofoutput in modern agriculture would be about 5 percent per annum, productionfrom forestry is expected to grow at a high 8 percent, largely due to agreater number of maturing trees coming into production, together with acontinuing strong demand for wood products during the rest of the decade.

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Output growth of traditional agriculture, which was assumed to be just aboutthe rate of population (3 percent per annum), should increase to about 4percent per annum through a higher cattle offtake, crossbreeding of thenational herd, improved animal husbandry, and increased crop and livestockproduction from the RDAs. The growth of manufacturing will directly reflectthe expansion of agricultural output in the modern sector, with a new impetusbeing provided through an expanded program of the NIDCS. Government and otherservices (including tourism), while not likely to expand at the high rate ofthe last five years, should generate a growth of value added in this sectorat about 8 percent per annum. In 1980/81, GDP in 1971/72 prices is projectedat about E 170 million (US$220) as compared to an estimated E 115 million(US$150) in 1973/74, implying a growth rate of 6 percent per annum.

Table 20: GDP BY SECTOR, 1971/72, 1973/74 AND PROJECTED 1980/81(Million Emalangeni in 1971/72 prices)

Annual GrowthRate 1973/74-

1971/72 1973/74 1980/81 1980/81Actual Est. Project. Percent

AgricultureIndividual TenureFarms 17.4 19.2 27.0 5.0

Swazi NationFarms 12.7 13.5 18.0 4.0

Forestry 2.6 3.0 5.0 8.0Mining and Quarrying 8.5 8.5 5.0 -Manufacturing 13.8 16.7 30.5 9.0Community and SocialServices 12.5 14.6 25.0 8.0

Other 23.5 26.4 42.0 7.0GDP (Factor Cost) 91.0 101.8 152.5 6.0Indirect Taxes 9.4 13.3 18.9 8.0GDP (Market Prices) 100.4 115.1 171.4 6.0


111. The markets for the principal agricultural exports (sugar, citrus,wood pulp, meat and meat products) are expected to remain favorable over thenext several years, and the strong export demand should stimulate an increasein production. In real terms, sugar exports are projected to grow at 6 percenta year on the average, but the growth of export earnings will depend to a largeextent on continuing favorable terms for sugar exports to the EEC. Wood pulpis expected to grow even faster at 8 percent per annum. The exports of meatand meat products have increased significantly in the past several years andthe favorable outlook for exports to South Africa indicates a growth rate onthe order of 15 percent per annum. Altogether, merchandise exports in constantprices should increase at about 8 percent per annum, reflecting both the goodperformance of agricultural exports and the expected decline in mineral exportstowards the end of the 1970's.

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Table 21: PRINCIPAL MERCHANDISE EXPORTS 1973 AND PROJECTED 1980(Million Emalangeni in 1973 prices)

Annual1973 1980 Rate of Growth

Percent

Sugar 18.9 29.0 6.0Wood pulp 15.3 26.0 8.0Meat and Meat Products 3.7 10.0 15.0Citrus 3.9 5.0 3.6Canned Fruit 2.8 4.0 5.2Cotton 2.8 5.0 8.6Iron Ore 7.9 - -Asbestos 6.7 7.0 -Coal 0.3 0.6 10.0


Public Finance

112. The general outlook for government finances is healthy. On therevenue side, imports should continue to increase at an annual rate of about7 percent in real terms which indicates the minimum growth rate of revenue tobe expected under the Customs Union Agreement. In addition, there is thepossibility that during the next five years, implementation will begin onthree large projects: (i) a third sugar mill, (ii) a thermal power plant,and (iii) large-scale coal exploitation. Substantial imports of capital goodswould then be required if these projects materialize and, under the terms ofthe Customs Union Agreement, would result in an additional increase in customsrevenues. The rate of corporation tax is still relatively low (33 percent)when compared with that in most developing countries, and offers some scopefor the further strengthening of government finances. The sugar levy isexpected to provide revenues of about US$28 million in 1975/76 as comparedwith US$13 million in 1974/75, but a reduction in the level of 1975/76 is pro-jected in line with the medium-term outlook for world prices. However, theterms for Swaziland's exports under the Convention between the EEC and ACPcountries, together with good prospects for increased production, should ensurethe continuing high profitability of this product. AltoRether. a sizablebudget surplus should continue to be generated over the next five years.

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Table 22: CENTRAL GOVERNMENT BUDGET 1973/74-1974/75 AND PROJECTIONS,1980/811/

(Million Emalangeni in current prices)

1973/74 1974/75 1980/81

Current Revenue 28.6 42.4 95Recurrent Expenditure 26.7 29.0 75

Recurrent Surplus/Deficit 1.9 13.4 20

Capital Expenditure 11.4 12.5 40Financing Gap 9.5 -0.9 20Finance by:Local borrowing 3.0 -Foreign borrowing 6.5 6.5

/1 Based on Government official estimate of revenue and expenditure.

Source: Ministry of Finance and mission estimates.

113. Current expenditure is expected to increase sharply in 1975/76following the proposed salary review for government employees, and is pro-jected to increase thereafter at 8 percent per annum in real terms. TheGovernment's absorptive capacity should continue to improve, and shouldbe able to sustain an increase in capital expenditure of 12 percent per annumin real terms. The financing of capital expendire is likely to have apattern different from that of the past when the Government relied entirelyon external assistance. While the Government would be able to finance asubstantial portion of capital expenditure from its accumulated surpluses, itshould also increasingly tap other domestic sources of finance. An increasein the Government's mobilization of domestic resources would be consistentwith the expected development of local financial institutions. However, foreignassistance should continue to ensure the provision of technical expertise andinstitution-building which would be needed for a long time yet. The favorableprospects for continuing improvement in government finances and export growthindicate a manageable debt service burden over the next several years. Itmight be timely therefore for the Government to review its investment policies,particularly in two important areas: (i) in accelerating the human resourcesand rural sector development, and (ii) in actively participating in such largeinvestments as the third sugar mill to serve Swazi farmers, coal miningexploitation, and the proposed thermal power station.

114. Total paid employment, which increased at 10 percent annually between1971/72 and 1973/74, is projected to increase at 8 percent per annum between1973/74 and 1980/81. Productivity gains from labor efficiency in the largeenterprises are likely to reduce their rapid employment growth of the 1960's,and the rapid rate of expansion of the government sector immediately afterIndependence is now likely to be followed by a more normal growth rate of

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8 percent per annum. Employment prospects will still be greatly influenced byan expansion of modern sector enterprises. Plans are in hand for an increasein sugar and fruit production, though this is not likely to be fully effectedbefore another few years. Employment in manufacturing could cortinue toincrease at 8 percent annually, particularly if the program of the NIDCS isimplemented. It is expected that employment in mining would decline with theexpected closure of the iron ore mine, but the possibility of coal productionwould improve the employment outlook. By 1980, the labor force in the tradi-tional sector should be about one half of the total labor force, as comparedto nearly 60 percent in 1973.

Issues

115. Dualism and its related problems represent the main challenge tothe development of the Swazi economy. Although there is the emergence ofan urban concentration, the urban/rural differentials in incomes and livingstandards, though present, have not yet led to the serious urban problemsfound in many developing countries. Dualism in Swaziland is characterizedby the division of agriculture into traditional and modern, and the correspond-ing dichotomy between Swazi ownership of the traditional sector againstforeign ownership of the prosperous modern sector. Modern agriculture andthe related manufacturing activities, together with mining, form the mainstayof the economy, but ownership and control are almost completely in foreignhands. While the benefits to the country from these operations must berecognized, an important objective of government economic policy has been toeffect change in the organization of the present economic structure to onemore closely related to national development goals, including a wider distribu-tion of the benefits of growth.

116. The problem of dualism in agriculture is being tackled through thedevelopment of RDAs, through fiscal policy, training and education, andthrough the land repurchase program. The RDA program seems to be the bestmechanism through which the large numbers of the rural population can partici-pate in the development process, and it deserves international support. Itmust be recognized, however, that.this is a long and difficult process requiringa continuing political commitment, adequate financial and human resources, andnational support. Government policy should therefore be reviewed, and consid-eration should be given to an accelerated RDA program in the light of Govern-ment's financial ability to increase substantially its share of developmentexpenditure.

117. Reduction in foreign control of the economy through the localizationof technical and professional manpower depends on the rate at which Swazis canbe adequately trained to replace expatriates. This process will be slow, partlybecause of the severe shortage of skilled Swazis, and also because it will takea number of years before a substantial number of trained Swazis become available.Government policy is rightly directed to expanding education and training. Alocalization committee has been set up to monitor this program, but it has notbeen very active. The work of the committee could be better focused by anupdated manpower survey which would analyze the demand/supply situation of

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skilled manpower over the next several years; the compilation of a registercontaining details of all Swazis presently studying abroad would be a usefulsupplement to this exercise. This information would form a basis on whichthe skill development institutions within Swaziland could improve their planningto meet the requirements of a modernizing economy. Additionally, the SEDCOprogram is an important element of Government's overall policy of localization.Altogether, these programs are directed to the development of the country'shuman resources which represent the most important prerequisite for effectiveparticipation in, and control of, the economy by Swazis.

118. While the projected growth of the economy over the next severalyears gives no cause for concern, its long-term pattern might be reconsidered,as the future role of educated Swazis in the economy may emerge as one of themain policy issues towards the end of the 1970's. Annual output of primaryand secondary students up until 1980 is projected at nearly 10,000 as againstan estimated growth in employment opportunities of about 6,000 per annum.Although the annual increment of this category to the labor force would besomewhat less than 4,000 persons, a growing number of the unemployed youth,in particular secondary school leavers, is likely to occur; many of thesewill be ill-equipped to satisfy the skill requirements of a rapidly moderniz-ing economy, because of the academic orientation of the educational system.In addition, a reluctance among the young labor force to employment in tradi-tional agriculture is likely to develop, leading to a greater migration to theurban areas. The Government's rural educational programs as well as thecurrent reform of the educational system are directed to alleviating thisproblem in the long-term. However, they must be accompanied by deliberate andwide-ranging actions for the modernization of traditional agriculture, inclu-ding the rapid improvement in social services to the rural areas.

119. Government's planning and implementation capability has to begeared to its increasing role in an economy which is likely to undergo rapidstructural change in the future. The case for improving the planning machineryof the Ministry of Finance has already been emphasized, but its urgency isheightened by the Third National Development Plan, the preparation of whichwill soon be underway. The emphasis on project-oriented planning which developedduring the early years of independence, should now give way to comprehensivemacroeconomic planning, so that the implications for development throughoutthe various sectors of the economy could be more thoroughly assessed. It shouldbe emphasized that a higher level of plan implementation can be achieved onlythrough a continuing program of training and supervision, and an upgrading ofmanagement throughout the government administration. It is essential that theGovernment's favorable budget situation not lead to any slackening of thenational effort or in the discipline to keep recurrent expenditure under firmcontrol.

120. Illustrative macro-economic projections in 1980 indicate a favorableresource balance and at the same time the emergence of a small deficit in thecurrent account of the balance of payments. While exports are projected togrow at a slightly higher rate than imports, 8 percent as against 7 percentannually, there is likely to be a decline in workers remittances and in thelevel of net government transfers which have largely offset factor payments

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abroad in recent years. In addition, with the expected good export performanceof foreign enterprises in sugar, wood pulp and citrus, an increase in factorpayments abroad consistent with higher export earnings is envisaged. Invest-ment as a proportion of GDP is projected at 25 percent in line with the levelof the past few years, and could even be higher if such large-scale invest-ments in coal exploration and sugar manufacture should materialize. Domesticsavings are expected to continue to account for about 30 percent of GDP, witha high marginal savings rate of 35 percent.

Table 23: RESOURCES AND USES(Million Emalangeni, 1973/74 Prices)

1973/74 1980/81

GDP (market prices) 147.4 220Imports (89.8) (150)Exports (96.1) (165)

Resource Balance 6.3 15

Total 141.1 205

Gross Capital Formation 37.7 55Public Consumption 20.0 35Private Consumption 83.4 115

Memorandum ItemsCurrent Account Balance 4.3 -3Gross National Savings 42.0 52Gross Domestic Savings 44.0 70

Source: Mission estimates.

121. External assistance to Swaziland has largely been on soft terms,and the debt service is currently less than 5 percent of merchandise exports.In view of the country's greater creditworthiness and expanding investmentprogram, it is unlikely that it will be able to mobilize external capitalin amounts and on terms similar to those of recent years. However, even iffuture capital inflows are less concessionary, the debt service ratio willprobably remain around 5 percent during the remainder of the 1970's.

STATISTICAL APPENDIX

1. POPULATION AND EMPLOYMENT

1.1 Selected Demographic Data, 19741.2 Population at Census Year, 1898-19661.3 Population by Sex and Ethnic Group at Census, 19661.4 Population by Tenure and District, 19661.5 African Population by age and sex, 19741.6 Employment in Traditional Sector by Region, 19731.7 Employment in Modern Sector, 1970-73

2. NATIONAL ACCOUNTS

2.1 Gross Domestic Product by Industrial Origin, 1967/68-71/722.2 Production, Consumption and Investment, 1967/68-73/742.3 Sources and Uses of Resources, 1969/70-73/742.4 Gross Capital Formation by Industrial Sector 1967/68-71/722.5 Gross Fixed Capital Formation by Type of Capital Good, 1967/68-71/72

3. BALANCE OF PAYMENTS

3.1 Balance of Payments, Current Account, 1968/69-70/713.2 Balance of Visible Trade, 1968-743.3 Principal Merchandise Exports, 1968-743.4 Merchandise Imports 1968-74

4. EXTERNAL PUBLIC DEBT

4.1 External Public Debt by Type of Creditor at December 31, 19744.2 External Public Debt Transactions at December 31, 1974

5. GOVERNMENT FINANCE.

5.1 Central Government Current Revenue, 1968/69-74/755.2 Central Government Current Expenditure, 1968/69-74/755.3 Central Government Capital Expenditure, 1969/70-74/755.4 Central Government Budgetary Situation, 1968/69-74/75

6. MONETARY STATISTICS

6.1 Selected Assets and Liabilities of the Banking System, 1971-746.2 Loans and Advances to Businesses,197 0-74

7. AGRICULTURAL STATISTICS

7.1 Land Availability and Use, 1971/727.2 Individual Tenure Farms, Number and Area, 1972/737.3 Swazi Nation Farms, Number and Area, 1971/72

7.4 Individual Tenure Farms, Number and Area cultivated, 1972/737.5 Swazi Nation Farms, Number and Area cultivated, 1971/727.6 Production of Main Crops on Individual Tenure Farms, 1968/69-72/737.7 Production of Crops on Swazi Nation Farms, 1971/72-72/737.8 Livestock and Poultry Population, 1969-73

8. STATISTICS ON OTHER SECTORS

8.1 Production of Minerals, 1969-748.2 Electricity Generating Capacity, 1969-748.3 Number of Consumers and Sales of Electricity, 1967-748.4 Retail Price Index, Mbabane, 1971-758.5 Retail Price Index, Mbabane and Manzini, 1969-748.6 Employment by Skill and Citizenship, 1971-738.7 Paid Employment in Private and Government Sector by Industry, 1972-738.8 Paid Employment by Industry, 1970-738.9 Pupils and Teachers in Primary and Secondary Schools, 1967-748.10 Enrollment in Higher Education, 1969-738.11 Highway Network, 1945-748.12 Licensed Vehicles by Type, 1966-72

Table 1.1: SELECTED DEMOGRAPHIC DATA 1974

Population Mid-1974 494,000 -/

Birth rate, per thousand 45

Death rate, per thousand 21

Rate of Natural Increase 2.4%

Rate of Population Growth 3.0 x

Infant Mortality Rate

Life Expectancy (1966) 48 years

Population under 15 years 46 %

African Population Projection 2/ 1985 - 709,000

1/ Includes 32,000 classified as absentees.7/ Projection based on constant fertility and declining

mortality.

Source: Central Statistical Office.

Table 1.2: POPULATION AT CENSUS YEAR 1898-1966

Or WhichOther Non- African

African European African Total Absentees

1898 _/ 43,512 .. 00 *e 0.

1904 2/ 84,529 8y90 7? 85,491 so

1911 107,233 1,083 143 108,459 8,500

1921 110,295 2,205 451 112,951 5,990

1936 153,270 2,740 705 156,715 9,561

1946 184,051 3/ 3,201 745 187,997 8,077

1956 233,2114 4/ 5,919 1,378 240,511 11,728

1966 381,586 9,157 4,395 395,138 19,219

1/ Administrative Census by South African Republic.7/ De facto Census as part of the Transvaal Colony.3/ Includes 2782 Foreign Africans.li/ Includes 3470 roreign Africans.


Table 1.3: POPULATION BY SEX AND ETHNIC GRLUP AT CENSUS 1966

Residents 1/ Absentees 21Males Females Total Males Females Total

Africans 172,291 190,076 362,367 12,817 6,,402 19,219

Europeans 4,370 3,617 7,987 588 582 1,170

OtherNon-Africans 2,134 2,083 4,217 107 71 178

Total 178,795 195s776 374,571 13,512 7,055 20,567

1/ Visitors included.2/ Persons away from Swasiland for 1e5s than 3 years and expected to return.Source: Report on the Swaziland Population Census 1966.

Table 1.4: POPULATION BY TENURE AND COMPONENT FOR EACH DISTRICT, 1966

Area Other non- Density(km2) African European African Total (kmL)

Rural AreaHhohho 1,836.1 61,825 147 210 62,182 33.8Manzini 2,037.3 74,o64 72 516 74,652 36.6Shiselweni 1,966.8 73,388 45 217 73,650 37.5Lubombo 3,256.2 51.277 65 325 51,667 .15.9

Total 9,096.9 260,554 329 1,268 262,151 28.8

Freehold FarmHhohho 1,688.1 17,104 1,087 166 18,357 10.9Manzini 2,009.1 18,018 1,510 429 19,957 9.9Shiselweni 1,794.1 17,907 427 419 18,753 10.5Lubombo 2,683.0 26,825 1.335 516 28,676 10.7

Total 8,174.3 79,854 4,359 1,530 85,743 10.5

Urban AreaHhohho 45.1 12,924 1,769 527 15,220 338.6Manzini 22.3 4,933 1,162 573 6,668 299.3Shiselweni 18.6 2,917 234 181 3,332 178.7Lubombo 7.2 1,185 134 138 1.457 200.9

Total 93.2 21,959 3,299 1,419 26,677 286.1

Swaziland 17,364.4 362,367 7,987 4,217 374s571 21.6


Table 1.5: AFRICAN POPULATION 1974 MID YEAR ESTIMATE

Age Males FemalesResident Absentee Total Resident Absentee Total

0-4 45,451 840 46,291 45,705 600 46,305

5-9 35,988 869 36,857 36,501 591 37,092

10-14 29,051 1,085 30,136 29,870 699 30,569

15-19 22,629 2,643 25,272 24,544 1,076 25,620

20-29 30,688 8,368 39,056 37,041 2,575 39,616

30-39 21,339 5,815 27,154 26,245 1,449 27,694

40-49 15,605 2,847 18,452 18,440 656 19,096

50-64 14,183 1,319 15,502 16,615 331 16,946

65+ 5,342 329 5,671 6,941 108 7,049

Total 220,276 24,115 244,391 241,z92 8,085 249,987

Source: Central Statistical Office

Table 1.6: EMPLOYMENT IN THE TRADITIONAL SECTOR BY GEOGRAPHIC REGION, 1973

Total -/Unpaid Active TotalFamily Paid Farm Popu- Farm

Region Workers Workers lation Population

Highveld 32,381 672 33,053 76,744

Middleveld 69,937 302 70,239 163,066

Lowveld 36,189 1,383 37,572 67,474

Lubombo 7,891 282 81173 14,600

Total 146,398 2,639 149,037 321,884

I/ Of this total, 115,000 Persons are estimated to have their mainoccupation in the traditional sector.


Table 1.7: ESTIMATED TOTAL EMPLOYMT IN THE MODERN SECTORSEPTEMBER 1970-73

1970 1971 1972 1973

Private Sector

Paid employees 33,176 37,130 43,767 44,285Self employed 1,234 1,278 869 987Unpaid Family Workers 125 142 1,042 1,093Small Swazi Traders 1,030 1,030 1,090 1,399Employees by private homesteads 6.500 6,50o 6.500 6,500

TOTAL 42,065 46,080 53,268 54,264

Public Sector 9,250 9,921 10,089 12,747

Total Employment 51,315 56,001 63,357 67,011


Table 2.1 GROSS DOMESTIC PRODIJCT AT FACTOR COST BY INDUSTRIAL ORIGIN

(Current orices 1967/68 - 1971/72)


1967/68 1968/69 1969/70 1970/71 1971/72

Agriculture and Forestry 14.7 13.2 21.9 24.1 32.7

Mining 10.4 9.2 8.5 8.3 6.6

Manufacturing 6.7 8.4 9.3 9.1 13.8

1/Construction .. .. 1.5 1.8 2.9

Distribution inc. Hotels & Restaurants 4.2 5.3 4.1 5.4 7.1

Electricity and Water 1.0 1.0 1.4 1.6 0.9

Transport and Communications 4.8 4.7 5.0 5.6 6.4

Finance and Business Services 2.1 1.6 1.7 1.9 1.6

Ownership of Dwellings 2.2 2.6 3.4 3.5 3.9

Public Administration 2.5 3.6 4.4 4.6 5.6

Miscellaneous Services 4.7 5.4 7.8 8.6 9.9

Total 53.3 55.0 69.0 74.5 91.6

Less Unallocated Items 0.4 0.4 0.9 0.8 0.6

Gross Domestic Product 52.9 54.6 68.1 73.7 91.0

1/ Included under Mining in 1967/68 and 1968/69.


Table 2.2: PRODUCTION,CONSUMPTION AND INVESTMENT, CURRENT PRICES, 1967/68-1973/74


1/ 11967/68 1968/69 1969/70 1970/71- 1971/72 1972/73- 1973/74'

Gross Domestic Product 50.6 54.6 68.1 73.7 91.0 108.5 134.1

(Factor Cost)

Net Indirect Taxes 2.8 2.4 8.0 7.3 9.4 10.5 13.3

Gross Domestic Product(Market Prices) 53.4 57.0 76.1 81.0 100.4 119.0 147.4

Net Factor Payments 7.4 6.6 9.4 9.1 8.5 9.8 12.0

Gross National Product 46.0 50.4 66.7 71.9 91.9 109.2 135.4

Gross Domestic Investment 10.3 11.2 12.6 18.5 22.7 30.4 37.7

Consumption 36.8 43.8 62.0 61.0 75.5 86.5 103.4

Gross Domestic Savings 16.6 13.2 14.1 20.0 24.9 32.5 44.0

Gross National Savings 14.5 12.2 13.8 18.9 25.2 32.2 42.0

1/ Provisional

Source: Central Statistical Office and Mission estimates.

Table 2.3: SOURCES AND USES OF RESOURCES, CURRENT PRICES, 1969/70- 1973/74


1969/70 1970/71 1971/72 1972/731/ 1973/741/

Consumption 62.0 61.0 75.5 86.5 103.4

Private ( 51.6) ( 50.1) ( 61.9) ( 71.5) ( 83.4)Government ( 10.4) ( 10.9) ( 13.6) ( 15.0) ( 20.0)

Investment 12.6 18.5 22.7 30.4 37.7

Fixed Government ( 2.3) ( 1.4) ( 3.3) ( 7.2) ( 10.7)

Fixed Private ( 7.5) ( 14.7) ( 16.7) ( 20.4) ( 24.0)

Inventory Change ( 2.8) ( 2.4) ( 2.7) ( 2.8) ( 3.0)

Exports of Goods & Non-Factor Services 48.9 56.0 63.2 72.8 96.1

Total Resources (Sources = Uses) 123.5 135.5 161.4 189.7 237.2

Imports of Goods & Non-Factor Services 47.4 54.5 61.0 70.7 89.8

Gross Domestic Product(Market Prices) 76.1 81.0 100.4 119.0 147.4

1/ ProvisionalSource : Central Statistical Office and Mission estimates.

Table 2.4: GROSS CAPITAL FOURY.TIDN BY IN WSTRIAL SECTOR 1967/68-1971/72


1967/68 1968/69 1969/70 1970/71 1971/72

Agriculture & Forestry 2.6 2.4 3.6 4.2 4.0

Mining o.6 1.0 0.5 2.0 1.1

Manufacturing o.6 2.3 2.5 6.8 8.1

('onstruction 0.5 .. Ol 01 0.2

Electricity & Water 0.2 2.4 o.8 0.9 1.5

Distribution 0.5 o.6 1.3 1.1 2.2

Transrort & Conmunications 0.8 o.6 0.2 1.2 1.0

services 4.1 ?.0 2.3 1.5 3.4

Total 10.3 11.3 12.2 18.5 22.7

1/ Included in Mining


Table 2.5: GROSS FIXED CAPITAL FORMATION BY TYPE OF CAPITAL GOOD, 1967/68-1971/72


1967/68 1968/69 1969/70 1970/71 1971/72

Residential Construction 2.4 1.4 1.0 0.7 105

Non-Residential Construction 1.6 1.5 2.0 2.8 2.5

Other Construction 2.0 1.7 2.0 2.2 3.0

Transport Equipment 1.5 2.0 1.2 2.2 3.1

Machinery & Other Equipmnnt 3.7 4.1 3.2 801 9.8

Total 11.2 10.7 9.4 16.o 19.9


Table 3.1: CURRENT ACCOUNT OF BALANCE OF PAYMENTS, 1968/69-1970/71


1968/69 1969/70 1970/71

Exports (f.o.b.)-/ 40.6 46.0 51.8Imports (c.i.f.) -32.4 -38.1 -43.7

Balance of trade 8.2 7.9 8.1

Fares -0.3 -0.4 -0.5Other transport -0.3 -0.3 -0.3Travel __ __ 0.7Government transactions -- 0.2 0.4Other services -6.7 -5.9 -6.9Investment income -5.3 -8.2 -7.4Other income payments -1.3 -1.5 -2.1

Balance of goods and services -5.7 -8.2 -8.0

Private transfers 0.2 0.2 0.3Government transfers 5.4 8.9 7.7

Balance on current account -0.1 0.9 -

1/ Free at border with the exception of meat and meat products, which are valuedex-factory.


Table 3.2: BALANCE OF VISIBLE TRADE, 1968-74

(Million Ema3kngeni)

1968 1969 1970 1971 1972 1903 19741l

Imports 34.1 37.4 42.7 47.7 53.4 68.1 85.5

Domestic Exports 2/ 39.3 44.5 50.4 55-1 61.8 72.8 130.0

Re-exports .. .. O.5 0.7 1.2 1.4 1.5

Visible Balance 5.2 7.1 8.2 8.1 9.6 6.1 46.o

1/ Provisional.2/ Valued free at border (f.o,b.)


Table 3.3: PRINCIPAL MERCHANDISE EXPORTS 1968-74


1968 1969 1970 1971 1972 1973 1974

Meat and Meat Products 2.0 1.4 1.5 2.0 2.2 3.7 7.5

Canned fruit 0.9 1.0 1.1 1.1 1.8 2.8 2.7

Sugar 9.1 10.5 11.8 11.5 19.2 18.9 44.1

Wood pulp 5.5 7.1 9.6 9.6 11.1 15.3 31.3

Timber and Other Wood Products .. 2.1 2.8 3.4 3.0 5.7 7.5

Iron ore 9.0 9.6 11.0 12.1 9.3 7.9 12.3

Asbestos 6.o 6.2 5.2 5.9 4.6 6.7 5.5

Other 6.8 6.6 7.4 9.5 10.6 11.8 19.1

Total Domestic Exports 39.3 44.5 50.4 55.1 61.8 72.8 130.0

1/ Provisional.


Table 3.4: MERCHANDISE IMPORTS 1968-74


1968 1969 1970 1971 1972 1973 1974

Food and Live Animals 4.1 5,0 4.8 4.6 4.7 5.8 7.6

Beverages & Tobacco 1.6 1.8 2.4 2.5 2.7 4.4 5.1

Crude Materials 0.4 0.7 0.5 o.6 0.5 0.9 0.8

Fuels and Lubricants 2.9 3.1 3.5 3.9 4.3 7.3 U.0

Animal and VegetableOils and Fats 0.2 0.2 0.2 0.2 0.3 0.3 0.4

Chemical Prodacts 3.1 3.2 3.6 4.3 6.o 6.7 10.4

Manufactures by materials 7.1 8.3 7.5 7.9 9.4 11.0 12.6

Machinery and Transport Equipment 10.0 9.2 11.2 13.6 13.8 16.2 17.9

Miscellaneous Manufactures 4.0 4.8 5.0 5.4 7.3 7.0 9.7

Others 0.7 1.1 4.0 4.7 4.4 8.5 10.0

Total 34.1 37.4 42.7 47.7 53.4 68.1 85.5

1/ Provisional.


Table 4.1: External Public Debt Outstanding As of December 31, 1974

Debt Repayable in Foreign Currency

In Thousands of U.S. Dollars

DEBT OUTSTANDING DECEMBER 31,19(4

CREDITOR COUNTRY UNDIS-

TYPE OF CREDITOR DISBURSED BURSED TOTAL

SOUTH AFRICA 2,106 2u10oSUPPLIERS 2.106 2,106

AFRICAN DEV.BANK ' lIe3? 1oB3l

IBRD 4,B35 3P500 1.e33tIDA 3,27t 5000 bt5270

LOANS FROM INTL. ORGANIZATIONS 8,113 10,337 1.8,450

DENMARK 2,655 - 2,65tUNITEn KINGDOM 24,130 i..4V4 ;31c62;USA. 2sOB5 865 2, 95c

LOANS FROM GCVERNMENTS 26,070 68359 3#p22&

TOTAL EXTERNAL PUBLIC DEBT i) !POt5S 57*785

NOTEI DEBT WITH A MATURITY OF OVER ONE YEAR

1) EXCLUDES THE FOLLOWINGt AMOUNT

UNCOMMITTED PARTS OF FRAME AGRMTS:UNITED KINGDOM 5.#423

LOANS FROM GOVERNMENTS 5, 423

TOTAL 5,423

NFT OF ACCUMULATED SINKING FUNDSt

UNITED KINGDOM 538LOANS FROM GOVERNMENTS 538

TOTAL 538

Source: External Debt Division, IBP.D.

Table 4..2: External Public Debt as of December 31, 1974

Debt Repayab'J in Foreign Currency

In Thousands of U.S. Dollars

Tutal

DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCTL

LATIONS,DISBURSED INCLUDING COMMIT- DISBURSF SERVICE PAYMENTS ADJUST

YEAR ONLY UNDISBURSED MENIS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (s) (6) (7) (8)

1970 35#749 36,133 13'531 3s115 1,458 i,834 3'292 -781971 37,328 48,128 2,6'4U 410 2,459 1,626 4*085 1s4111977 35,784 49,720 5*191 12,893 6*233 1,404 7*637 -2961973 42o079 48,382 9,001 bt330 8p76? 1,656 94918 -5,4b21974 41,538 43,639 16>75' 177 3,215 987 4J202 606

1975 39,089 57,785 - 4,974 1,105 834 1*998 -231976 41*975 56,597 - 3P447 1*342 876 2P218 0241977 44,051 55,226 3,079 1,431 878 2*3091978 45#650 53,796 _ 2J515 1839 872 2'7'121979 46,*325 51,956 - 2,141 2,197 846 3*0431980 46,270 49,760 1#528 2,424 807 3,Z3t1981 45,374 47,336 - 912 7,718 746 s*46;1982 43,568 44,618 5W7 3,016 697 3o713 -1983 41,109 41#602 472 2,868 623 3*4911984 38,662 3B,733 70 7,722 55b 3*280 1985 36,010 36,011 - ?,833 538 3,3701986 33,177 33,178 - - 7,687 476 3*1631981 3U,491 30,492 2,471 421 2o892 -198 28,020 28,021 - - 27335 382 2,717 _1989 25P685 25,686 _ 252 346 2*600 -1990 23,434 23,435 * .,235 319 2P5541991 21,199 21,200 * ,2124 292 2*4151992 19,075 19,076 - 27044 269 2#3131993 17,031 17,032 2-*U35 25(. 2*2851994 14,996 14,997 - - 1,997 229 2*226

Source: External Debt Divisicn, IBRD.

Table 5.1: CENTRAL GOVERNMENT CURRENT REVENUE, 1968/69-1974/75

(Million Emalaneeni)

1968/69 1969/70 1970/71 1971/72 1972/73 1973/741' 1 9 7 4 / 7 5 2/

Customs and Excise 2.0 7.5 6.7 8.5 10.5 13.3 18.7

Sugar Levy - - - - - 1.5 9.0

Income Tax 4.9 4.2 4.6 5.3 7.1 8.5 12.4

Other Taxes and Duties 0.4 0.7 1.0 1.2 1.4 2.0 2.3

Earnings of Depart-ments 1.5 1.5 1.5 1.8 2.2 1.2 )

) 3.5Other Revenue 1.6 1.7 1.9 1.7 1.3 2.1 )

TOTAL REVENUE 10.4 15.6 15.7 18.5 22.5 28.6 42.4

1/ Provisional actuals2/ Estimate

Source: Ministry of Finance and Mission estimates

Table 5.2: CENTRAL GOVERNMENT CURRENT EXPENDITURE, 1968/69-1974/75


1968/69 1969/70 1970/71 1971/72 1972/73 1973/741/ 1974/75-2/

Administration,Internal Security,Defense 6.8 6.2 7.0 7.8 8.8 14.4 12.3

Social Services 3.2 3.6 3.9 4.6 5.3 6.5 7.6

Education 2.2 2.5 2.6 3.1 3.6 4.5 5.3Health 1.0 1.1 1.3 1.5 1.7 2.0 2.3

Infrastructure 1.8 1.9 2.0 2.3 2.7 2.5 2.2

Agriculture 1.2 1.6 1.6 1.5 1.5 1.7 2.1

Other EconomicServices 0.1 0.2 0.2 0.3 0.4 0.5 3.0

Public Debt 0.8 0.9 0.9 0.9 1.1 1.1 1.8

TOTAL 13.9 14.2 15.6 17.4 19.8 26.7 29.0



Table 5.3: CENTRAL GOVERNMENT CAPITAL EXPENDITURE, 1969/70-1974/75


1969/70 1970/71 1971/72 1972/73 1973/741/ 1974/752/

General Administration 0.8 0.4 0.9 1.3 3.6 n.a.

Administration 0.6 0.3 0.8 1.1 2.6Law and Order 0.2 0.1 0.1 0.2 1.0

Community Services 0.2 0.1 0.7 1.0 3.1 n.a.

Water and Sewerage ) ) 0.5 0.5 0.7Housing ) 0.2 ) 0.1 0.1 0.1 1.2Other Services ) ) 0.1 0.4 1.2

Social Services 0.8 0.5 0.6 1.4 1.0 n.a.

Education 0.7 0.4 0.4 1.1 0.8Health 0.1 0.1 0.2 0.3 0.2

Economic Services 0.5 0.7 1.4 3.9 3.7 4.9

Agriculture 0.2 0.3 0.8 1.5 2.5 3.3Industry and Power ) ) 0.4 1.9 0.7 1.0Transport and ) )

Communications ) 0.3 ) 0.4 0.2 0.5 0.5 0.5Commerce and ) )

Handicrafts ) ) - - - 0.1

TOTAL 2.3 1.6 3.5 7.7 11.4 12.5


Source: Ministry of Finance

Table 5.4: CENTRAL GOVERNMENT BUDGETARY SITUATION, 1968/69-1974/75


1968/69 1969/70 1970/71 1971/72 1972/73 1973/741/ 1974/752'/

Current revenue 10.4 15.6 15.7 18.5 22.5 28.6 42.4

Current expenditure 13.9 14.2 15.6 17.4 19.8 26.7 29.0

Current deficit/surplus -3.5 1.4 0.1 1.1 2.7 1.9 13.4

Capital expenditure 2.4 2.3 1.6 3.5 7.7 11.4 12.5

Financing deficit/surplus -5.9 -0.9 -1.5 -2.4 -5.0 -9.5 +0.9

Financed by:UK grants-in-aid 3.3 0.4 - - - - -Other grants 0.7 2.0 0.1 0.1 0.1 0.5 0.7UK development

loans - - 1.4 1.8 1.9 2.5 3.0Other foreign loans 0.7 0.2 - - 4.1 4.0 3.5

Change in governmentbalances(increase = -) 1.2 -1.7 -0.1 -0.5 -1.1 -0.5 -8.1



Table 6.1: SELECTED ASSETS AND LIABILITIESOF THE BANKING SYSTEM, 1971-74


1971 1972 1973 1974Dec. Dec. Dec. March June Sept. Dec.

Notes and Coins 1.3 1.4 1.6 0.6 0.8 2.1 2.5

Treasury Bills - - 1.7 0.2 0.4 0.7 1.6

Government Bonds - - 3.0 3.5 4.0 4.0 4.0

Advances & Loans 25.1 18.3 22.1 26.8 32.2 32.1 28.3

To Government 1.4 1.1 0.9 - 0.4 - -

To Private Sector 23.7 17.3 21.4 26.8 31.9 32.0 28.7

Deposits 26.9 31.5 34.3 31.9 32.0 34.9 48.8

Current 10.3 13.3 12.0 9.6 10.8 12.7 15.2

Savings 6.5 7.2 7.2 7.4 7.8 7.8 8.3

Time 10.1 11.0 15.1 14.4 12.9 13.6 24.6

Source: Monetary Authority

Table 6.2: LOANS AND ADVANCES TO BUSINESSES, 1970-74


1970 1971 1972 1973 1974Dec. Dec. Dec. Dec. Dec.

Agriculture andForestry 4.7 5.7 2.8 6.2 7.4

Mining-& Quarrying - 0.8 - 0.3 0.4

Manufacturing 5.2 2.8 2.6 1.4 3.9

Construction 0.2 0.4 0.2 0.1 0.3

Trade, Restaurants& Hotels 1.2 2.8 3.1 3.3 4.2

Transport andCommunications - 0.2 0.3 - -

Finance and RelatedServices 0.6 2.1 0.9 2.6 3.5

Community and SocialServices 0.1 1.6 3.8 0.5 0.7

Total 12.0 16.4 13.7 14.4 20.4

Source: Monetary Authority

Tahle 7.1: LAND AVAILABILITY AND USE 1971/72

(Thousand Hectares)

IndividualSwazi Nation Tenure Total

Cropland 116.8 6.8 54.2 3.2 171.0 9.9

Crops 90.0 5.3 43.0 2.5 133.0 7.7

Fallow 26.7 1.5 11.3 0.7 39.0 2.2

Grazing Land 787.4 45.6 554.3 32.1 1,341.8 77.7

Natural veld 787.4 45.6 438.6 25.4 1,226.0 71.0

Improved - - 115.7 6.7 116.7 6.7

Forest - - 99.0 5.7 99.0 5.7

Other 5.6 0.3 109.8 6.3 115.4 6.7

Total 910.0 52.7 817.0 47.3 1,727.2 100.0


Table 7.2: INDIVIDUAL TENURE FARMS: NUMBER AND TOTAL AREA BY SIZE 1972/73

Area % ofNumber (hectares) Total area

Below 100 hectares 307 16,778 2.2100 up to 500 hectares 220 45,907 6.0500 up to 1,000 hectares 94 67,119 8.71,000 up to 2,000 hectares 71 102,661 13.32,000 up to 3,000 hectares 45 105,347 13.73,000 up to 4,000 hectares 15 51,133 6.64,000 up to 5,000 hectares 10 44,245 5.85,000 and above 29 336,171 43.7

Total 791 769,361 100.0


Table 7.3: SWAZI NATION LAND; NUMBER AND AREA OF HOLDINGS BY SIZE 1971/72

(Hectares)

Swaziland Highveld Middleveld Lowveld LubomboNo. Area No. Area No. Area No. Area No. Area

All holdings 38,809 106,559 9,247 19,195 19,182 45,284 8,441 38.248 1,93 3,833

Holdings under 1 ha 10,303 5,814 2,669 1,592 5,304 2,991 1,565 864 764 367

Holdings of 1 up to 5 ha 23,780 56,513 5,937 12,889 12,215 29,879 4,608 11,399 1,020 2,345

Holdings of 5 ha and above 4,726 44,232 640 4,713 1,663 12,413 2,267 25,984 155 1,121


Table 7.4: INDIVIDUAL TENURE FARMS: NUMBER AND AREABY SIZE OF CULTIVATED AREA 1972/73

Area % of(Number) (hectares) total area

Below 100 hectares 292 8,563 15.8100 up to 200 hectares 41 5,726 10.6200 up to 300 hectares 24 5,833 10.8300 up to 400 hectares 1 364 0.7400 up to 500 hectares 8 3,532 6.5500 and above 21 30,213 55.6

Total 387 54,231 100.0


Table 7.5: DISTRIBUTION OF CULTIVATED AREA

ON SWAZILAND NATION, 1971/72(hectares)

AreaNumber Area Per Holding

Less than 1 10,303 5,814 0.6

1 to 5 23,780 56,513 2.4

5 and over 4,726 44,232 9.4

Total 38,809 106,559 2.7


Table 7.6: PRODUCTION OF MAIN CROPS ONINDIVIDUAL TENURE FARMS, 1968/69-1972/73

Unit 1968/69 1969/70 1970/71 1971/72 1972/73(000)

Sugar m.ton 150 154 157 176 181

Citrus m.ton 55 58 59 73 72

Pineapples m.ton 9 10 9 8 14

Cotton m.ton 4 3 6 9 10

Maize m.ton 4 5 8 10 10

Rice m.ton 16 10 8 6 5


Table 7.7: SWAZI NATION LAND: AREA AND PRODUCTION OF CROPS,1971/72-1972/73

1971/72 1972/73Quantity Quantity

Area produced Area produced(hectare) (lhetric ton) (hectare) (metric ton)

Maize 62,311 109,792 70,555 77,893

Groundnuts (nuts) 4,945 2,898 4,422 2,631

Cotton (seed cotton) 3,933 2,523 3,493 2,239

Jugo beans 2,813 1,648 2,053 1,222

Sorghum 2,566 2,504 3,235 2,142

Beans 2,084 1,111 1,450 474

Sweet potatoes 926 6,864 569 4,217

Tobacco 308 228 319 236

Sugar cane 133 9,977 116 10,884


Table 7.8: LIVESTOCK & POULTRY POPULATION , 1969-73(Thousands)

1969 1970 1971 1972 1973

Cattle 538.2 538.4 571.8 589.2 602.4

Goats 248.1 259.0 261.5 252.0 265.1

Sheep 37.0 39.7 43.1 37.2 38.2

Pigs 11.9 11.5 11.4 14.5 15.5

Poultry 342.5 359.3 399.3 379.2 443.0


Table 8.1: PROIIXCTION OF MINERALS 1969-73

('000 Metric Ton)

1969 1970 1971 1972 1973

Chrysolite Asbestos 36.4 32.8 38.1 33-5 39.6

Iron Ore 2,302.1 2,348.4 2,264.3 1,983.7 2,147.0

Coal 1J14.7 138.2 150.5 143.0 140.4

Pyrophyllite 0.5 0.2 0.2 0.0 0.1

Barytes 0.5 0.2 0.0 0.0 0.1

Kaolin 1.5 1.4 2.1 2.2 1.6


Table 8.2:ELECTRICITY GENERATING CAPACITY DECEMBER 31, 1969- 73

Generating Capacity in M.W.Agency 1969 1970 1971 1972 1973

Swaziland Electricity BoardHydro 21.5 21.5 21.5 21.5 21.5Diesel 7.0 11.5 11.5 11.5 9.5

IndustrySteam 27.0 27.0 27.0 35.5 35.5Diesel 3.3 3.3 3.3 5.0 5.0Hydro 1.0 1.0 1.0 1.0 1.0

Total 59.8 64.3 64.3 74.5 72.5

of which:Hydro 22.5 22.5 22.5 22.5 22.5Steam 27.0 27.0 27.0 35.5 35.5Diesel 10.3 14.8 14.8 16.5 14.5

Source: Swaziland Electricity Board.

Table 8.3: NUMBER OF CONSUMERS AND SALES OF ELECTRICITY BYSWAZILAND ELECTRICITY BOARD 1967-73

IrrigationPower and

Domestic Commercial Bulk TotalNumber of

1967 1,381 4u2 65 1,9691968 1,545 574 94 2,2131969 1,713 597 107 2,4171970 1,838 643 112 2,5931971 2,205 715 155 3,0751972 2,576 910 194 3,6801973 3,004 1,029 198 4,231

Units Soldmillion k.w.h.

1967 6.4 5.2 30.1 41.81968 7.9 5.8 41.4 55.11969 9.8 6.4 57.1 73.31970 10.9 7.3 72.2 90.41971 11.1 7.3 66.8 85.21972 15.8 10.0 81.4 107.21973 19.0 12.0 90.0 121.0


Table 8.4: RETAIL PRICE INDEX FOR MBABANE1 '

(December 1970 = 100)

Transport Fuel, DurableDrink Clothing and Health Light and Miscel-and and Communi- and and Household laneous All

Food Tobacco Footwear cations Education Water Goods Items Items

(Index Weights) (297.5) (95) (100) (152-5) (80) (65) (90) (120) (1,000)

1971 October 111.7 114.6 106.0 109.5 106.9 100.9 107.1 105.8 108.9

1972 January 112.0 115.2 107.1 109.5 107.7 101.0 109.5 105.6 109.4April 113.9 116.5 108.8 112.6 108.7 101.0 113.4 109.5 111.6July 116.1 117.1 110.5 117.4 108.8 101.1 114.7 110.6 113.5October 118.4 117.4 110.4 118.1 109.5 101.1 166.0 110.3 114.4

1973 January 127.5 117.4 111.6 120.2 110.3 101.1 116.6 110.4 117.5April 137.8 122.8 115.9 120.8 113.3 101.1 118.1 112.5 122.4July 141.5 123.5 114.9 121.0 1114.9 102.5 123.1 113.4 124.3October 143.9 124.0 118.4 121.3 114.8 102.5 131.4 118.4 126.8

1974 January 146.9 124.0 122.7 132.8 119.7 106.7 136.4 117.2 130.9October 167.2 135.6 134.6 145.3 121.4 120.4 151.6 122.8 144.2

1975 January 183.1 139.5 137.4 151.6 133.0 120.4 157.6 126.8 152.4

1/ Produced quarterly in January, April, July and October.


Table 8.5: RETAIL PRICE INDEX FOR MBABANE AND MANZINI 1969-74

(January 1967=100)

Food Fuel Drinks Clothing AllVegetables Other and and and Other Itemsand Fruit Food items Light Tobacco Texiles Items Index

(Index Weights) (45) (575) (60) (120) (100) (100) (1,000)

Annual Average

1969 106.8 111.0 101.1 100.2 111.4 112.5 106.71970 108.0 108.7 103.1 100.2 114.0 125.0 109.11971 110.4 109.3 112.3 103.6 111.4 132.2 111.31972 114.5 110.7 116.3 105.3 114.4 140.5 113.91973 136.7 127.6 121.4 108.8 123.3 148.7 127.11974

1974 January 146.6 141.3 137.9 110.7 135.4 158.5 138.8February 148.2 143.6 144.4 110.7 138.0 158.2 140.8March 150.8 145.0 165.4 110.7 139.9 158.9 143.3

April 151.8 144.4 172.8 110.7 148.6 159.4 144.3May 152.3 146.1 181.5 110.7 149.4 159.7 146.0June 153.2 151.2 187.6 113.6 159.3 159.1 150.6

July 154.0 154.3 188.3 118.1 159.4 160.1 153.1August 153.8 160.0 188.3 118.1 161.5 164.1 156.9September 152.7 161.8 188.3 118.1 163.2 165.9 158.3

October 151.8 173.2 188.3 118.1 163.2 171.1 165.4November 152.2 167.7 189.4 118.1 164.2 171.1 162.4December 153.0 161.0 192.7 118.1 165.4 170.2 159.0


Table 8.6: EHPLOYMENT BY LEVEL OF SKILL AND BY CITIZENSHIP, 1971-73(EXCLUDING AGRICULTUREj

1971 1972 1973

Swazi Non-Swazi Total Swazi Non-Swazi Tot Swazi Non-Swazi Total

Administrative& Technical 682 773 1,455 993 912 1,905 945 987 1,932

Clerical 804 335 1,139 972 272 1,244 1,178 247 1,425

Skilled 262 529 791 462 547 1,009 737 494 1,231

Semi-Skilled 3,119 261 3,380 3,276 184 3,460 3,870 180 4,050

Unskilled 13,819 264 14,083 15,647 301 15,948 16,085 175 16,260

Total 18,686 2,162 20,848 21,350 2,216 23,566 22,815 2,083 24,898


Table 8.7: PAID EMPLOYMENT IN THE PRIVATE AND GOVERNMENTSECTOR BY INIDJSTRY - SEPTEMBER 1972 AND 1973

Private Sector Public Sector Total1972 1973 1972 1973 1972 1973

Agriculture & Forestry 24,159 23,479 173 176 24,332 23,665

Mining & Quarrying 2,950 2,924 . . 2,950 2,924

Manufacturing 6,512 7,360 . 6,512 7,360

Electricity & Water . 541 592 541 592

Construction 2,107 2,256 1,522 1,694 3,629 3,950

Distribution etc. 3,842 4,002 3,842 4,002

Transport etc. 775 778 1,505 1,910 2,280 2,688

Finance etc. 580 581 580 581

Social Services 2,842 2,905 6,348 8,75 9,190 11,280

Total - All Industries 43,767 44,285 10,089 12,747 53,856 57,032


TABLE 8.8: Paid Employment by Industry, 1970-73

1970 1971 1972 1973

Agriculture & Forestry 18,319 20,840 24,332 23,655

Mining & Quarrying 2,907 2,926 2,950 2,924

Manufacturing 5,383 5,837 6,512 7,360

Electricity & Water 509 518 541 592

Construction 2,328 2,537 3,629 3,950

Distribution, etc. 3,423 3,842 3,842 4,002

Transport, etc. 1,877 2,050 2,280 2,688

Finance, etc. 344 427 580 581

Social Services 7,336 8,074 9,190 11,280

Total 42,426 47,051 53,856 57,032


Table 8.9: PUPILS AND TEACHERS IN PRIMARY AND SECONDARY SCHOOLS, 1967-74

Number of Number of Pupils Number ofSchools Boys Girls Total Teachers

Primary Schools1967 349 30,469 28,818 59,287 1,5391968 358 31,816 30,266 62,082 1,6271969 366 33,251 31,160 64,411 1,7391970 351 35,571 33,484 69,055 1,7061971 366 36,770 34,685 71,455 1,8951972 392 39,361 36,982 76,343 2,0151973 395 41,960 39,734 81,694 2,1121974 405 43,948 42,162 86,110 2,220

Secondary Schools1967 31 2,169 1,623 3,792 2321968 31 3,515 2,731 6,246 3001969 42 3,943 2,834 6,777 3661970 54 4,569 3,458 8,027 4321971 54 5,057 3,944 9,001 4481972 62 6,045 4,636 10,681 4911973 64 6,993 5,466 12,459 5501974 66 7,884 6,417 14,301 611


Table 8.10: ENROLLMENT IN HIGHER EDUCATION, TEACHER TRAINING ANDTECHNICAL TRAINING, 1969-73

1969 1970 1971 1972 1973

UniversityB.A. Degree Pt - - - .. 92B.Sc. Degree Pt I - - - 82Diploma in Business Studies - - - .. 20Diploma in Agriculture 60 52 61 37 83Certificate in Agriculture 68 27 12 14 -Forestry Course 20 - - - -

Home Economics Course 13 - - - -Total 161 79 73 51 277

Teacher TrainingMales 75 93 88 95 106Females 200 213 244 225 233Total 275 306 332 320 339

Domestic Science Teacher 21 17 - - -

Technical and Artisan TrainingPost Secondary School .. 19 65 89 177Post Primary School .. 177 161 219 211Total 96 196 226 308 388


Table 8.11: HIGHWAY NETWORK, 1945-74(Kilometers)

Main District Of WhichRoads Roads Total Paved

1945 1,030 690 1,720

1955 1,130 720 1,850 -

1965 1,500 760 2,260 160

1970 1,452 977 2,429 183

1971 1,452 1,030 2,482 183

1972 1,456 1,063 2,519 187

1973 2/ 1,456 1,120 2,576 190

1974 2/ 1,456 1,150 2,606 190

1/ By Legal Notice No. 30 of 1970 a reclassification of roadswas adopted; this accounts for the decrease in the lengthof main roads.

2/ Estimates.


Table 8.12: LICENSED VEHICLES BY TYPF 1966-72

Light OtherMotor Goods GoodsCars Vehicles Vehicles Buses Total

1966 3,922 2,017 884 166 6,989

1967 4,273 2,024 919 208 7,424

1968 4,111 2,337 892 246 7,586

1969 4,251 2,220 886 237 7,594

1970 4,414 2,020 895 230 7,559

1971 4,561 2,101 1,118 275 8,055

1972 4,796 1,960 1,266 295 8,317

1/ Licensed vehicles excluded from this total are tractors, motorcycles, caravans, trailers, earth movers and graders.

2/ Under 2,000 kgs unladen weight.


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