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MDG Goal 1: Eradicate extreme poverty and hunger - Other MDGs

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Target 1.A Halve, between 2000 and 2015, the proportion of people whose income is less than one dollar a day

Indicators
1.1 Poverty head count ratio (Percentage of population below the national poverty line)
1.2 Poverty gap ratio
13 Share of poorest quintile in national consumption

Status at a glance

Will target be met Potentially
State of supporting enviromnent Strong

Table 1.1 Status in figures

Swaziland 1.1.jpg

Source: SHIES (1995 & 2001); # T21 2010 projection

  • Desired target

Status and trends

Indicator 1.1 Poverty head count (percent of the population below the national poverty line)

Swaziland 1.1.jpg

Source: SHIES (1995 & 2001); T21 2010 projection

The prevalence of poverty, measured by the proportion of people living below the poverty line, increased from 66 percent in 1995 to 69 percent in 2001 as shown by the Swaziland Household Income and Expenditure Survey (SHIES) of 2001, Figure 1.1. Examination of the proportion of the population living below the poverty line revealed that poverty increased during the period 1995 to 2001. This is attributed to many factors: interalia, the decline in incomes and stagnation of real private consumption associated with slowing economic growth that started in the early 1990's and worsened post 2000; the fall in real GDP growth from an annual average of 8 percent in the 1980s to 3.5 percent in the 1990s and down to 2.4 percent in 2001 (Economic Review and Outlook 2002); the relocation of some companies from Swaziland to South Africa after the democratisation process of South Africa that led to increases in unemployment rates; and the impact of HIV /AIDS during the same time.

This is consistent with the fall in the prevalence of poverty projected in the T21 model, currently being developed by the Ministry of Economic Planning and Development to project poverty figures. Projections indicate that poverty is declining. In fact, 64 percent is projected to be the population living below the poverty line for the year 2009/10. A more definitive picture on the current status of poverty in the Kingdom is expected after the completion of the SHIES 2009/2010.

This is consistent with the fall in the prevalence of poverty projected in the T21 model, currently being developed by the Ministry of Economic Planning and Development to project poverty figures. Projections indicate that poverty is declining. In fact, 64 percent is projected to be the population living below the poverty line for the year 2009/10. A more definitive picture on the current status of poverty in the Kingdom is expected after the completion of the SHIES 2009/2010.

Although the long-term trend in poverty decline appears to have resumed as per the model, uncertainty remains about the current status. The eonomy is still absorbing the impact of the recent international economic crisis and the drastic reduction of national resources caused by decline in the Southern African Customs Union (SACU) revenue.

Looking ahead intO the medium and long term, and - Path to Goal ----- Linearly Pro jected Value notwithstanding the impacts of the recent exogenous shocks still to be accounted for, it is reasonable to Source: SHIES 1995, 2001 expect that poverty will continue along its long-term descent.

The country's Poverty Reduction Strategy and Action Programme (PRSAP) made clear that the country would have to boost economic growth to at least 5 percent per year to make a major dent on poverty because growth of both private and public incomes and concomitant consumption, which are critical to the well-being of the population, depended on it. This is not the case currently. An enabling environment, therefore, needs to be created for economic growth to reach the desired level in the short run.

Indicator 1.2 Poverty gap ratio

The poverty gap ratio shows the average extent to which individuals fall below the poverty line. The indicator measures the "poverty deficit" of the entire population and the per capita amount of resources that would be needed to bring all poor people above the poverty line through perfectly targeted cash transfers. According to the SHIES 1995, the poverty gap ratio was 48 percent. In 2001, the SHIES reported 33 percent, which is still very high. The poverty gap for rural areas is reported to have been 37 percent, versus 20 percent for urban areas. (SHIES 2001). Figure 1.2 below shows that Swaziland is going in the right direction but would still need to work hard to accelerate progress.

Swaziland Figure 1.2.jpg

Source: SHIES 1995, 2001

In addition, SHIES (2001) determined that the higher the dependency ratio [ratio of the number of dependents members (under 14 and over 60 years of age) in a household to the total household size] the more likely the household members will be poor. Programmes that offer OVCs, old people and the poor choices in terms of reproductive health would help improve the poverty gap ratio.

Indicator 1.3 Share of poorest quintile in national consumption

Share of the poorest quintile in national consumption is the income that accrues to the poorest fifth of the population. The consumption of the poorest fifth is expressed as a percentage of total household consumption (or income). and it gives a relative inequality measure.

In 1995, the poorest quintile consumed 3.9 percent of the total consumption in the country, compared with 59 percent consumed by the richest quintile. According to SHIES (2001 l. the bottom fifth of the quintile was consuming 4.3 percent of the total consumption, while the richest quintile was consuming or had 56.4 percent. (Figure 1 . 3). Although the share of the poor has increased, it is too low relative to that of the rich.

The SHIES of 1995 stated that the Gini coefficient of the country was 50. 7 percent. The SHIES (2001) discovered the Gini Coefficient for the country was 51 percent, with urban and rural areas at 50 percent and 45 percent respectively (Figure 1 .3).

Swaziland Figure 1.3.jpg

Source: SHIES 1995, 2001

An average person in the richest quintile commands more than 13 times the consumption expenditure of the average person in the poorest 20 percent of the population.

Target 18 Achieve full and productive employment and decent work for all

Status at a glance

Will target be met Potentially
State of supporting environment Strong

Indicator 1.1 Growth rate of GDP per person employed

Data for this indicator is limited since the country has traditionally relied on the Swaziland Population and Housing Census (SPHC). which occurs every ten years, for information on the total number of people employed in the country. This changed in 2007 with the carrying out of the 2007 /08 Integrated Labour Force Survey (LFS). the first comprehensive labour force and informal sector survey to be undertaken in the country.

In 2007, the total number of employed people in the country stood at 222, 771 (LFS 2007 /08) while GDP at (2000) constant prices reached E12, 323 million (Swazi-Info). In the year 1997, 185,038 people were employed (SPHC 1997) whilst GDP at (2000) constant prices was E9, 599 million (Swazi-Info). Using these figures, the growth rate of GDP per person employed - a measure of labour productivity growth - was 6.6 percent between 1997 and 2007. Another Integrated Labour Force Survey will be conducted this year and will allow for a more updated assessment of labour productivity growth in the country.

Indicator 1.2 Employment-to-population ratio

The employment-to-population ratio is the proportion of a country's working-age population that is employed and is a good indicator of an economy's ability to provide jobs.

The 2007 /08 LFS indicated that the country had an employment-to-population ratio of 37%. This ratio is almost identical to the one reported in the 2007 SPHC and is an improvement on previous years. However, with only 37% of the working-age population employed in 2007 the country is some distance away from achieving full employment. One reason for the low employment-to-population ratio is the country's poor labour force participation rate - many Swazis are out of the labour force and not economically active. The second explanation is the country's high unemployment rate - many of those in the labour force struggle to find employment.

Table 1.2: Employment-to-population ratios, 1986-2007

Swaziland 1.2.jpg

Source: LFS 2007108, calculated from the SPHC 1986 & 1997

The country's unemployment rate stood at 28.2 percent in 2007 (LFS 2007/08), which was not much better than the 29.1 % reported in the 2001 Swaziland Household Income and Expenditure Survey (SHIES). Moreover, if discouraged workers - those who have stopped looking for employment but want to work and are available to work - are included among the unemployed, the unemployment rate in the country rises to 38.0 percent in 2007 (LFS 2007/08). The growth of the labour force is much higher than employment creation in the country and these high levels of unemployment represent a substantial barrier to eradicating poverty.

More recently, the global economic and financial crisis has had a detrimental impact on employment prospects in the country. Reduced demand for Swazi exports contributed to the closure of companies and the loss of around 3,000 jobs in the manufacturing sector (Budget Speech 2010). In response, the country has set itself the target of creating at least 10,000 jobs in 2010.

Swaziland's labour force participation rate of 52 percent (LFS 2007 /08) also indicates that many are economically inactive, i.e. not working and not looking for work. This could be due to attendance in school or university but the 2007 /08 LFS also reveals that sickness is an important factor.

This is consistent with the country's high HIV/AIDS prevalence rate and further underscores the importance of ensuring antiretroviral drugs are provided to all those that need it. Another factor driving the country's low labour force participation rate is discouragement, with many no longer seeking employment in the belief no jobs are available.

Indicator 1.3 Proportion of employed people living below $1 per day

Data for this indicator is limited but useful information can be extracted from the out-dated 2001 SHIES.

The 2001 SHIES reported that households with an employed head were less likely to experience poverty, as shown in table 1.3. While unsurprisingly lower, it is disappointing that employment of the household head does not result in more pronounced reductions in household poverty.

Table 1.3 Poverty rate by household employment status in 2001

Poverty rate for all households 56%
Poverty rate for those households with an employed head 47%

Source: SHIES 2001

A closer inspection of the 2001 SHIES reveals that an important determining factor is the nature and type of the employment. Those households whose head was involved in paid non-seasonal work had a much lower poverty rate of 36 percent (SHIES 2001). In contrast, 60 percent of households headed by a self-employed worker were in poverty and this rises to 62 percent for those headed by a paid seasonal worker (SHIES 2001). This strongly indicates that employment which provides a guaranteed stream of income throughout the year will have a far greater povertyreducing impact, as one would expect. Households with unpredictable income flows are also inhibited from overcoming poverty due to the requirements of financial institutions in the country which prevent them from accessing loans.

Inequality analysis

•Unemployment in the country has a strong rural dimension - those residing in rural areas are much more likely to be unemployed than those living in urban areas. This has consistently been reported in country-wide surveys such as the SPHC and SHIES. In 2007, the unemployment rate of rural areas was 32. 7 percent compared to 21 .9 percent in urban areas (LFS 2007/08).

•A wide range of employment indicators reveal that men possess noticeably better employment prospects than women. In terms of the employmentto- population ratio, women have a much lower ratio of 31 percent compared to the 43 percent for men. With regard to unemployment, the rate is visibly higher for women - 31.2 percent compared to 25. 7 percent for men (LFS 2007 /08).

•At 53.3 percent, the unemployment rate of youths (those aged 1 5 to 24) is considerably higher than for the general population (LFS 2007/08).