Swaziland should improve living conditions of the masses because the best way to grow the economy is to distribute wealth among the people, it has been recommended.
Advisor in the Independent Evaluation Office of the International Monetary Fund Dr Steve Kayizzi-Mugerwa said the 1.8% economic growth rate is not enough to create sustainable growth, hence it is important for the state to create enough space to expand its capabilities.
Speaking on ‘Growth and Inclusion in Swaziland: Constraints and Prospects for an Emerging Kingdom’, he challenged Swaziland to make proper policies and strategies to utilise opportunities that come with regional integration and economic diversification.
“As far as regional integration is concerned, the country must choose between ‘splendid isolation’ versus ‘managing trade-offs’ but becoming a regional player is better than to stand alone. There are benefits of being a landlocked country but it calls for Swaziland to adopt critical strategies to get the benefits,” he said.
Dr Kayizzi-Mugerwa said the rate at which the Swaziland economy is growing is not enough to create growth, hence the need for the country to open the fiscal space to create opportunities.
Giving the Swaziland Economic Portrait 2017, he noted that the country’s score on the index of economic freedom is 61.1, putting Swaziland at number 8 in Africa, after South Africa (6) but ahead of Lesotho (26) and Kenya (27). He explained that the index shows the level of government’s interference in the economy.
He advised that Swaziland should choose an economic model that can work best. “It is either you choose the Chinese social market approach or you adopt the developmental literacy structure which embraces a more democratic approach. It is also important to place priority on sectors that the country wants to develop. Countries like South Korea and Singapore place emphasis on science and technology,” he said.
Dr Kayizzi-Mugerwa noted recommended that Swaziland should consider export diversification or adopt the Gulf-stream structure where revenue that is sourced from principal commodities is not used on recurrent expenditure but invested in other sectors that will stimulate economic activity, like tourism.
However, Dr Kayizzi-Mugerwa observed that the process of growth does not assume the linear approach as it has its ups and downs. He said Swaziland needs to attract investment, create a fiscal space and debt sustainability for higher growth.
Dr Kayizzi-Mugerwa said the country needs to articulate a national development vision even in the face of imperfect institutional structures. He noted that transformation requires popular engagement and must appeal to popular imagination, such as branding as there is/will be tension between growth and equality, which must be addressed particularly because inclusion is not automatic.
Recommendations on areas of priority:
• Deal with rural/urban dichotomy in addressing poverty
• Education and employment for quality human capital accumulation
• Diversify economic niches/expand industrial base
• Graduating the peasant household
• Peace and prosperity so as to reap real dividends