TEXTILE AND CLOTHING INDUSTRY IN SUB-SAHARAN AFRICA The Textile and Clothing Industry of Swaziland By Winnie S. Madonsela 1. Introduction and Overview of the Swaziland Economy The economy of Swaziland has been closely linked to and is dependant on the South African economy even before Swaziland as a British Protectorate gained independence in 1968. The Government of Swaziland has always adopted a colla­borative stance towards the South African government, even when such a stance was unpopular during the apartheid era in South Africa. Swaziland’s economy is so closely integrated with the South African economy, and Swaziland’s currency, the Lilangeni, is pegged to the South African Rand on a one to one basis, making it vulnerable to Rand exchange control volatility. South Africa remains Swaziland’s major trading partner. Swaziland shares membership in the Southern African Customs Union(SACU) with Botswana, Lesotho, Namibia and South Africa. SACU is a regional trade ar­rangement that allows duty free access for goods and services to member countries. A Common External Tariff(CET) is charged on all goods entering SACU from non­member countries. SACU members are negotiating Free Trade Areas(FTA) with several economic groupings and individual countries, including the USA, the European Free Trade Area(EFTA), MERCOSUR, India and China. The conclusions of FTA agreements will certainly impact on market opportunities for Swaziland. Swaziland enjoys preferential access to European markets under the EU-ACP­Cotonou Agreement and to the US markets under the African Growth and Op­portunity Act(AGOA). Swaziland’s economic performance has declined since the early 1990s. The average annual rate of real Gross Domestic Product(GDP) growth fell from 8% in the 1980s to 4% in the 1990s. Since then, growth has declined further. Official estimates put real GDP growth at 2.1% in 2004. Given the estimated population growth rate of 2.9%, the unimpressive economic growth implies a deterioration in the standard of living as measured by per capita income. Agriculture forms the backbone of Swaziland’s economy. A large part of the GDP is directly related to agriculture, as much of the value added in the manu­facturing sector arises from processing agricultural and forestry products. The FRIEDRICH-EBERT-STIFTUNG 247