Eight research papers that were presented at the inaugural Eswatini Economic Conference (EEC) 2017 have been published in the African Review of Economics and Finance Journal, December 2018 issue.

The Conference, which was held under the theme; ‘Turning the Key: A Path to Economic Recovery and Sustainable Growth in the Kingdom of Eswatini’, sought to document efforts made towards economic recovery in the country, particularly in the wake of the Kingdom’s celebration of 50 years of independence. One of the Conference objectives was to publish a special issue comprising a selection of relevant papers with a strong empirical basis, focusing on innovative research of policy and operational relevance.

The Conference was hosted by the Eswatini Economic Policy Analysis and Research Centre (ESEPARC), the Central Bank of Eswatini (CBE), and the University of Eswatini (UNESWA), with support from the United Nations Development Programme (UNDP) in October 2017.

Given the need for home-grown strategies to turn the Eswatini economy around, this special edition of the African Review of Economics and Finance presents economic policy research conducted in Eswatini. The articles in this edition document the country’s challenges and successes in the last 50 years and suggest opportunities for development impact and further research (Download Editorial).

The articles are diverse in orientation and scope and cover six areas of the economy: i) accelerating rural transformation, ii) strengthening the financial sector, iii) promoting inclusive growth and development, iv) fostering inclusiveness and reducing poverty, v) mitigating weather-related risks and building resilience, and vi) structural and macroeconomic reforms.

One study, which maps the national system of innovation (NSI) in Eswatini using national research and experimental development (R&D), and innovation surveys, finds that investment in knowledge creation in the country is very low. The authors recognise that to transform the economy of Eswatini and quicken rural transformation, there is need for targeted investments in science, technology, and innovation (STI).

Another paper quantifies the size and assesses the trends of the shadow economy in Eswatini over a period of 16 years. The results indicate that the shadow economy in Eswatini was at 37.4% of GDP in 2016, which means that the current GDP has been underestimated by E20.5 billion due to the exclusion of economic activities taking place outside of the formal economy when computing GDP.

In a bid to understand how Eswatini households cope with natural disasters, especially droughts, one paper investigates the predictors of food insecurity among households in Eswatini in the aftermath of the 2015/16 El Niño induced drought. The authors found that weakened health and disability compounded food insecurity during the drought. They also found that the prices of maize and rice are good predictors of food insecurity among households in Eswatini during a drought.

With challenges of electrical power unreliability being common in the country, a study quantifying the economic costs of electrical power outages in Eswatini was conducted, in a bid to understand how unreliable energy is contributing to Eswatini’s growth reflux. The authors found that the cost of power outages on the residential sector is equivalent to approximately 2% of GDP in Eswatini.

One study undertakes a causal analysis for Eswatini, which examines whether financial development causes increased financial inclusion. The author confirms the existence of a long run relationship between financial inclusion, financial development, and economic growth in Eswatini. Still under strengthening the financial sector, another paper shows that Eswatini’s foreign exchange reserves are driven by GDP per capita, developments in the current account, government expenditure, and movements in the exchange rate. The authors find that growth in Eswatini’s foreign exchange reserves lags behind those of other emerging economies.

Taking stock of the country’s journey since independence, this paper presents an assessment of the evolution of trade in Eswatini, tracking changes in the composition of both import and export commodities. The paper finds that increasing investment into research and development is one of the strategies that the country can employ in order to widen the range of commodities in which it has comparative advantage.

Given the high rates of unemployment, skills development – particularly technical and vocational education and training (TVET) – is crucial. A study examining the economic benefits of investing in TVET, track graduates from the National Handicraft Training Centre (NHTC) to assess the demand and absorbability of their skills into the economy. Using a cost-benefit ratio analysis, the authors find that for every Lilangeni invested in the NHTC, E4.66 accrues to the economy, suggesting that TVET is a credible route to end youth unemployment.

ESEPARC Executive Director Dr Thula Sizwe Dlamini mentioned that the publication of the papers concludes over 12 months of an intensive peer review process. He said peer-review is necessary to double check the ideas, findings, and policy strategies contained in the papers. He explained that each paper was peer-reviewed by at least two international experts.

Dr Dlamini mentioned that as ESEPARC, they are ecstatic with this latest achievement, adding that for a very long-time, international researchers have complained about the limited policy papers about the economy in Eswatini. “This is an important output for our country from a bibliographical perspective. It shows commitment towards the realisation of a knowledge economy in Eswatini”, he added.

Dr Dlamini invited policymakers, development partners, and business to make use of the papers, especially the policy recommendations. He further thanked all the authors who sacrificed their precious sleep to make the publication a success. The papers are available on African Review of Economics and Finance – Vol 10, No 2 (2018) and on the ESEPARC website.

About the AREF

The African Review of Economics and Finance Journal (AREF) is the official journal of the African Finance and Economics Consult (AFEC). Published twice a year, the African Review of Economics and Finance is a globally revered peer-reviewed, scholarly publication featuring articles, review essays and book reviews. In particular, the journal favours articles with theoretical and empirical results that have important implications for the understanding of African economies and other regions of the world.