Publication: Creating Markets in Eswatini : Strengthening the Private Sector to Grow Export Markets and Create Jobs - Country Private Sector Diagnostic
Date
2022-09
ISSN
Published
2022-09
Author(s)
International Finance Corporation
Abstract
Eswatini is facing multiple
challenges. It was already experiencing weak economic growth
before the COVID-19 pandemic, a reflection of longstanding,
deeply rooted issues such as fiscal unsustainability,
declining private investment, weakening productivity and
competitiveness, and falling export diversification and
complexity, compounded by the impact of climate shocks. It
shifted from a private investment–led higher-growth model to
a government spending–led lower-growth model after the end
of apartheid in South Africa. With weak investment in
productive sectors, Eswatini’s job market failed to keep
pace with an expanding, younger labor force, leading to a
large informal sector. Eswatini’s public sector–driven
growth model is unsustainable under current fiscally
constrained conditions, and there is a need to reduce and
reprioritize public spending. An assessment of existing
sectoral data and consultations with Eswatini’s private
sector and policy makers suggest that four sectors can help
drive the export-led private sector growth model. To return
to an export-led growth model, Eswatini needs to increase
export competitiveness by advancing regulatory reforms and
improvements in trade logistics that include regional
collaboration to address trade facilitation constraints.
Finally, given the country’s vulnerability to climate risks,
policies to foster economic resilience amid extreme weather
events (mainly droughts that affect agriculture) and improve
disaster preparedness need to be pursued. The private sector
must adapt to this challenge and work with the government to
improve climate resilience.
Citation
“International Finance Corporation. 2022. Creating Markets in Eswatini : Strengthening the Private Sector to Grow Export Markets and Create Jobs - Country Private Sector Diagnostic. Country Private Sector Diagnostic;. © Washington, DC. http://hdl.handle.net/10986/38335 License: CC BY 3.0 IGO.”