Economic growth Economic growth in Eswatini has lagged behind that of its neighbors. Real GDP growth since 2001 has averaged 2.8 percent, nearly 2 percentage points lower than growth in other Southern African Customs Union (SACU) member countries. Low agricultural productivity in the Swazi nation lands, repeated droughts, the effect of HIV/AIDS, and an overly large and inefficient government sector are likely contributing factors. Eswatini's public finances deteriorated in the late 1990s following sizeable surpluses a decade earlier. A combination of declining revenues and increased spending led to significant budget deficits. The considerable spending has not led to more economic growth and has not benefitted the poor to the same extent as regional comparators, although the poverty headcount has shifted slightly during the first decade of the 2000s (SHIES 2010). Much of the increased spending has gone to current expenditures related to wages, transfers, and subsidies. The wage bill today constitutes over 15 percent of GDP and 55 percent of total public spending; these are some of the highest levels on the African continent. The recent rapid growth in SACU revenues has, however, reversed the fiscal situation, and a sizeable surplus was recorded in 2006/07 and 2012/13. SACU revenues today account for over 50 percent of total government revenues. On the positive side, the external debt burden has declined markedly over the last 20 years, and domestic debt is almost negligible; external debt as a percent of GDP was less than 20 percent in 2006.
Economic growth Economic growth in Eswatini has lagged behind that of its neighbors. Real GDP growth since !2001 has averaged 2.8 percent, nearly 2 percentage points lower than growth in other Southern Afr:ican Customs Union (SACU) member countries. Low agricultural productivity in the Swazi nation lands, repeated droughts, the effect of HIV/AIDS, and an overly large and inefficient government sector are likely contributing factors. Eswatini's public finances deteriorated in the late 1990s following sizeable surpluses a decade earlier. A combination of declining revenues and increased spending led to significant budget deficits. The considerable spending has not led to more economic growth and has not benefitted the poor to the same extent as regional comparators, although the poverty headcount has shifted slightly during the first decade of the 2000s (SHIES 2010). Much of the increased spending has gone to current expenditures related to wages, transfers, and subsidies. The wage bill today constitutes over 15 percent of GDP and 55 percent of total public spending; these are some of the highest levels on the African continent. The recent rapid growth in SACU revenues has, however, reversed the fiscal situation, and a sizeable surplus was recorded in 2006/07 and 2012/13. SACU revenues today account ,for over 50 percent of total government revenues. On the positive side, the external debt burden has declined markedly over the last 20 years, and domestic debt is almost negligible; external debt as a percent of GDP was less than 20 percent in 2006.