Rand hits Swazi exports

JOHANNESBURG – The strong rand has hit exports from Swaziland but business has benefited from cost cuts in imported capital goods and economic growth looks set to accelerate, Finance Minister Majozi Sithole said yesterday.

Sithole said Swazi economic growth for 2004 remained on track to come in between two and three per cent, in line with his earlier forecasts, and he saw it accelerating to four to five per cent next year. Swaziland’s emalangeni currency is pegged one-to-one to South Africa’s rand, underscoring the small kingdom’s economic independence on its giant neighbour.Swaziland’s key export is sugar.But Sithole said imports on capital goods such as machinery were much cheaper and some Swazi businesses had taken advantage of the situation.He also said that imports from South Africa, were not affected by rand fluctuations because of the peg.The rand is only about 2,5 per cent firmer in the calendar year to date against the dollar after surging 40 per cent in 2002 and a further 28 per cent last year.This has affected neighbours Swaziland, Namibia and Lesotho, whose currencies are all directly pegged to the rand.Sithole said Swaziland had no intention of undoing the peg to the rand, a commodity currency anchored in minerals such as gold and platinum that Swaziland doesn’t have in significant quantities.Landlocked Swaziland is also heavily dependent on aid from donors who have raised their eye-brows at the lavish lifestyle of the country’s ruler, King Mswati, who is sub-Saharan Africa’s last absolute monarch.-Nampa-ReutersSwaziland’s emalangeni currency is pegged one-to-one to South Africa’s rand, underscoring the small kingdom’s economic independence on its giant neighbour.Swaziland’s key export is sugar.But Sithole said imports on capital goods such as machinery were much cheaper and some Swazi businesses had taken advantage of the situation.He also said that imports from South Africa, were not affected by rand fluctuations because of the peg.The rand is only about 2,5 per cent firmer in the calendar year to date against the dollar after surging 40 per cent in 2002 and a further 28 per cent last year.This has affected neighbours Swaziland, Namibia and Lesotho, whose currencies are all directly pegged to the rand.Sithole said Swaziland had no intention of undoing the peg to the rand, a commodity currency anchored in minerals such as gold and platinum that Swaziland doesn’t have in significant quantities.Landlocked Swaziland is also heavily dependent on aid from donors who have raised their eye-brows at the lavish lifestyle of the country’s ruler, King Mswati, who is sub-Saharan Africa’s last absolute monarch.-Nampa-Reuters