Mbabane: Eswatini has continued to be classified as a Lower-Middle Income country by the World Bank. The institution classifies the world’s economies into four income groups — high, upper-middle, lower-middle, and low. This is based on Gross National Income (GNI) per capita (current US$), calculated using the Atlas method. The classification is updated each year on July 1, based on the previous year’s national account information and using data provided by the local statistical office for 2019.
For this current financial year, low-income economies are defined as those with a GNI per capita of US$1.035 or less in 20119; lower middle-income economies are those with a GNI per capita between US$1.036 and US$4.045; upper middle-income economies are those with a GNI per capita between US$1.036 and US$4.045; upper middle-income are those with a GNI per capita between US$4.046 and US$12.535; high-income economies are those with a GNI per capita of US$12.536 or more.
The classification of economies into the different clusters comes with a lot of restrictions especially those classified under middle income, upper-middle income and high income. For instance, countries under middle income are not legible to get the European Union duty free market under the Generalised Special Preference (GSP) because they have moved out of the Least Developed Countries (LCDs). This implies that their goods attract duty when they get into overseas market.
Eswatini ceased from being a beneficiary under the European Union GSP because it now benefits under the Economic Partnership Agreement (EPA). Others include Côte d’Ivoire, Ghana, Cameroon, Kenya, Seychelles, Mauritius, Zimbabwe, Namibia, Botswana, Papua New Guinea and Fiji. The EU signed an Economic Partnership Agreement (EPA) on 10 June 2016 with the SADC EPA Group comprising Botswana, Lesotho, Mozambique, Namibia, South Africa and Eswatini (formerly Swaziland). Angola has an option to join the agreement in future. The agreement became the first regional EPA in Africa to be fully operational after Mozambique started applying the EPA in February 2018.
The other six members of the Southern African Development Community region – the Democratic Republic of the Congo, Madagascar, Malawi, Mauritius, Zambia and Zimbabwe – are negotiating Economic Partnership Agreements with the EU as part of other regional groups, namely Central Africa or Eastern and Southern Africa. The EU is the Southern African Development Community EPA Group’s second largest trading partner, with South Africa accounting for the largest part of EU imports to and EU exports from the region. The Southern African Development Community EPA countries are strong in the exports of diamonds and in South Africa, Botswana, Lesotho and Namibia these constitute a large to dominant share of their exports to the EU. Other products from the region include agricultural products (beef from Botswana, fish from Namibia or sugar from Eswatini), oil from Angola or aluminum from Mozambique.
South Africa’s exports to the EU are much diversified and range from fruit to platinum and from manufactured goods to wine. The EU exports a wide range of goods to the Southern African Development Community EPA countries, including vehicles, machinery, electrical equipment, pharmaceuticals and processed food. The countries in the Southern African Development Community EPA Group are members of the WTO. The SADC EPA group are very diverse in terms of economic development: Lesotho and Mozambique are least developed countries (LDCs), but Namibia and Botswana hold upper middle income status.
Botswana, Lesotho, Namibia South Africa and Eswatini form the Southern Africa Customs Union (SACU).
The EPA gives asymmetric access to the partners in the SADC EPA group. They can shield sensitive products from full liberalisation and safeguards can be deployed when imports from the EU are growing too quickly. A detailed development chapter identifies trade-related areas that can benefit from funding. The agreement also contains a chapter on sustainable development which covers social and environmental matters.
Improved opportunities for trade
The EPA guarantees access to the EU market without any duties or quotas for Botswana, Lesotho, Mozambique, Namibia, and Eswatini. South Africa benefits from new market access in comparison to the Trade, Development and Cooperation Agreement between the EU and South Africa (TDCA), which that currently governs the trade relations with the EU until October 2016 (when the EPA entered into provisional application and thereby repealed the trade component of the TDCA).
The new access includes better trading terms mainly in agriculture and fisheries, including for wine, sugar, fisheries products, flowers and canned fruits. The EU will obtain meaningful new market access into the Southern African Customs Union (products include wheat, barley, cheese, meat products and butter).
, and will have the security of a bilateral agreement with Mozambique, one of the LDCs in the region.
The EPA includes a bilateral protocol between the EU and South Africa on the protection of geographical indications and on trade in wines and spirits. The EU will protect names such as Rooibos, the famous infusion from South Africa, and numerous wine names like Stellenbosch and Paarl.
In return, South Africa will protect more than 250 EU names spread over the categories food, wines and spirits.