Mission Highlights
Poor agro-climatic conditions characterized
by late onset of the rainy season and below-average cumulative rainfall
have undermined Swaziland's cereal harvest for the fourth consecutive year.
Maize production in 2003/04 is estimated at about 64 000 tonnes, 13 percent below last year and about 30 percent below the average for the previous five years.
Cereal import requirement in the 2004/05 marketing year (April/March) is estimated at about 132 000 tonnes, of which 100 000 tonnes are expected to be imported commercially.
With about 10 000 tonnes of food aid in stocks and in the pipeline as of April 2004, the uncovered deficit, for which international assistance is needed, is estimated at 22 000 tonnes.
Early drought conditions caused some loss of livestock, but late rains improved pastures and animal condition in most parts of the country. Livestock production is expected to help offset, to some extent, the impact of crop failure.
The continuing spread of HIV/AIDS is further exacerbating the already severe impact of adverse weather through high unemployment, income inequality and poverty.
A targeted approach for food aid is required, focused primarily on mitigating the effect of HIV/AIDS, and on direct support to households with no access to available food and agricultural inputs.
A total of 262 000 people will face food/income deficits of varying amounts, and approximately 28 355 tonnes of food (or income equivalent) will be needed to meet the deficit for the entire year.
1. OVERVIEW
During the past three years, Swaziland has suffered below-average and declining cereal production because of erratic rainfall patterns, which are exacerbating the impact of rising unemployment and increased poverty. The continued spread of HIV/AIDS has compounded the threat to the country's overall food security. Towards the end of last year, the Government declared a state of national disaster and appealed for international assistance.
Against this background, an FAO/WFP Crop and Food Supply Assessment Mission visited Swaziland from 1 to 13 May 2004 to estimate the 2003/04 cereal harvest and import requirements - including food assistance - for the 2004/05 marketing year (April/March). The Mission received full cooperation from the Deputy Prime Minister's Office, Ministry of Agriculture and Cooperatives (MoAC), Central Statistical Office (CSO) of the Ministry of Economic Planning and Development, the National Disaster Task Force (NDTF) and the National Early Warning Unit. Ministry of Agriculture officials as well as food aid monitors accompanied the Mission on field visits.
The Mission's findings are based on discussions held with government officials, staff from United Nations agencies, multilateral and bilateral donors and staff of local and international NGOs. Field visits were conducted to all districts and agro-ecological zones of the country. Discussions were also held with the Swazi Vulnerability Assessment Committee (VAC), National Maize Corporation (NMC), Ngwane Milling, Universal Milling Company and the National Agricultural Marketing Board. Available relevant reports and documents were reviewed, and satellite-based normalized difference vegetation indices (NDVI) were analysed. Pre-harvest data on area and yield were provided by the Central Statistical Office (CSO) and the
National Early Warning Unit (NEWU), respectively. The Mission cross-checked and adjusted data where necessary, following field inspections, interviews with farmers and district extension officers and spot-check crop measurements where possible.
The Mission found that the 2003/04 agricultural season was characterized by erratic rainfall (started late with unusually heavy rains later in the season) and a below-average cumulative rainfall. In some potentially high-producing areas, precipitation problems caused plantings to be made twice. In addition, a significant decline in the use of agricultural inputs, mainly fertilizer and improved seed, was observed, due to diminished farmers' purchasing power, removal of subsidies and risk aversion following the late rains and government pronouncements advising caution.
Overall, the Mission has estimated the 2003/04 maize production at 64 108 tonnes, which is about 13 percent below last year's crop and 30 percent under the average for the previous five years.
Other important crop sources of food and cash such as cabbage, beans, potatoes, cotton and sugar cane were also observed in farmers' fields. However, with the exception of vegetables in places where late rains encouraged production, the area planted to these other crops has also declined.
Early drought conditions caused some loss of livestock, but late rains improved pastures and animal condition in most parts of the country. Livestock production is expected to help offset, to some extent, the impact of crop failure.
The cereal import requirement in 2004/05 marketing year (April/March) is estimated at 13 200 tonnes, of which an estimated 10 000 tonnes are expected to be imported commercially. With food aid in stock and in the pipeline estimated at about 1 000 tonnes, the uncovered deficit for which international assistance is required is estimated at 2 200 tonnes.
Prices of major cereals were relatively stable during most of 2003 but started to creep up from the beginning of 2004. The upward trend is expected to continue during the rest of this year as supplies from domestic and regional sources may be rather limited.
The spread of HIV/AIDS in Swaziland has continued unabated over the past decade. The statistics paint a grim picture: the HIV/AIDS prevalence rate among 15-49 year-olds has increased ten-fold between 1992 and 2002, from 3.9 percent to 38.6 percent. In addition to humanitarian and social consequences, HIV/AIDS brings severe economic costs in its wake, as it constrains output growth, eliminates work skills and knowledge, shrinks the tax base, raises health-related costs, reduces disposable incomes and increases the financial imbalance in the public pension funds. The national response in tackling the pandemic is being coordinated through the National Emergency Response Commission on HIV/AIDS (NERCHA).
Based on the VAC analysis, verified by field work carried out during the mission, the cumulative affect of these factors results in a projection that a total of 262 000 people will face food/income deficits of varying amounts and that approximately 28 355 tonnes of food (or income equivalent) will be needed to meet the deficit for the entire year.
2. SOCIO-ECONOMIC CONTEXT
2.1 General
Swaziland's economy is based on agriculture and agro-industry, mainly sugar, citrus and wood pulp. Growth sectors include soft-drink concentrates, food products, textiles and paper products. Coal is the major mineral resource. The main merchandise exports are sugar and sugar derivatives, consumer goods and pulpwood. Imports include mainly capital and intermediate goods, manufactured goods, machinery and transport equipment, agricultural and farming goods, and energy.
Swaziland is classified as a lower middle-income country with a per capita income of US$1 245 in 2002. However, per capita income of the poorest 40 percent of the population is only US$230, and 66 percent of the population live below the poverty line. The income distribution is skewed, as about 43 percent of the total income is received by only 10 percent of the population.
2.2 Recent macroeconomic developments
Official estimates put real GDP growth rate at 2.9 percent in 2003, well below the 3.6 percent estimated for 2002. This reflects declining rates in foreign direct investment, the slowdown in manufacturing output and low agricultural productivity from drought. Growth in manufacturing output slowed in 2003 following the closing of some major companies and depressed world demand for the country's primary commodities. The slowdown in 2003 in South Africa's economic growth, Swaziland's largest export market, was mainly responsible for the undermined demand. The loss in momentum in the expansion of economic activity is expected to continue, and this factor is reflected in the 2004 GDP forecast of less than 2 percent, partly because of the effect of drought in the 2003/04 cropping season.
Average annual inflation fell to 7.4 percent in 2003, compared with 11.8 percent in 2002. In January 2004, the annual inflation rate dipped further to 4.1 percent, helped by a slowdown in food price rises (food items constitute nearly one-quarter of the consumer price index). However, inflation rose in subsequent months and is expected to rise further, in line with forecast trends in South Africa, whose economic situation has a major influence on inflation in Swaziland. The forecast trends in South Africa average at 5.4 percent in 2004 and 5.8 percent in 2005.
The budget for fiscal year 2004/05 projects a deficit of Emalangeni 221 million compared with E445 million in 2003/04 and E593 million in 2002/03. The country's balance of payments estimates indicate an overall deficit for the third consecutive year in 2003. The overall deficit in 2003 stood at E128 million compared to E307 million in 2002. The current account deficit is expected to widen to 5 percent of GDP in 2004, as the trade deficit widens from lower export earnings caused by lower sugar and textile exports and an expected weakening of the currency. Import growth of consumer goods will be sluggish, in line with weak real GDP growth, but food imports will increase to offset the impact of drought conditions.
The public debt level at the end of December 2003 was E4.4 billion (31 percent of GDP), compared to E3.5 billion at the end of March 2002. This level takes into account the appreciation of the local currency against major currencies at 17 percent. Nonetheless, Swaziland's debt/GDP and debt-service ratios are considered low by developing country standards, reflecting a history of cautious government borrowing.
Swaziland's foreign reserves have remained relatively stable in the last decade at about US$300 million. However, in the last couple of years, the loss of competitiveness in the export sector, the appreciation of the exchange rate, and relatively higher government spending have negatively affected the country's foreign reserves. In February 2004, net foreign reserves reflected a substantial decline of more than 23 percent year-on-year. At this level the reserves were sufficient to cover 2.5 months of estimated imports, slightly below the minimum cover of 3 months recommended for developing countries.
2.3 Population estimates
According to the 1997 census, the total resident population was estimated at 930 000 with an annual rate of growth of 2.9 percent. However, the forecast population growth rate has fallen rapidly since then and now stands at about 2.2 percent. Current CSO estimates put the total population in 2004 at 1.1 million compared to 1.08 million in 2003. The average life expectancy has also fallen from 56.4 in 1997 to 41.4 in 2004. A continued decline in average life expectancy is projected until 2009, when it will reach its lowest level at 34.9.
2.4 HIV/AIDS
The spread of HIV/AIDS in Swaziland has continued unabated over the past decade; Swaziland is the third-most affected country in the world following Botswana and Zimbabwe. The statistics paint a grim picture: HIV/AIDS prevalence rates among the 15-49 year-olds has increased ten-fold between 1992 and 2002, from 3.9 percent to 38.6 percent. This age-group forms a large proportion of the economically productive population. AIDS-related deaths are estimated at 8 000 people in 2001, and projections indicate that by 2009 they will have risen to 24 000 per annum. The most at-risk groups created by the pandemic include orphans and vulnerable children (OVCs), who are currently estimated at more than 60 000 in the country (with a projected rise to 120 000 by 2010).
In addition to its humanitarian and social consequences, HIV/AIDS costs countries severely in economic terms, as it constrains output growth, eliminates work skills and knowledge, shrinks the tax base, raises health-related costs, reduces disposable incomes, and increases financial imbalance in the public pension funds.
The national response in tackling the pandemic is being coordinated through the National Emergency Response Commission on HIV/AIDS (NERCHA). A three-pronged National Strategic Plan was established to deal with the crisis with the following actions:
- Mitigation allows for decentralization
of activities such as food distribution and information centres to regions.
- A prevention programme aims at reducing
the risk of infection through behavioural change. This was motivated by
the observation that despite a high level of awareness of HIV/AIDS in the
country, this has not been translated into positive changes in behaviour.
- A care and support programme has set up additional centres that assist in the distribution of antiretroviral (ARVs) drugs, which have already reached about 1 300 people, with a further 10 000 people to have access to the drugs by 2005.
The Indlunkhulu project aims to ensure food security for orphans and vulnerable children within communities. This project, implemented by NERCHA with support from WFP, FAO and the Ministry of Agriculture and Cooperatives, aims at providing support for farm inputs to all Chiefdoms in the country to enable communities to plough the Indlunkhulu fields, thereby providing a sustainable source of food for HIV/AIDS-affected households.
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