Cover

Contents

I. Introduction

II. Swaziland: Debt Sustainability Analysis

A. Baseline Scenario and Underlying Assumptions

B. Sensitivity Analysis

C. Conclusion

III. Balance Sheet Vulnerabilities

A. Government Vulnerabilities Stem from Financial Mismatches

B. Government Arrears Weaken the Private Sector

C. Financial Sector: Exposure to Government Risks and Weaknesses in Supervision

IV. Exchange Rate Assessment

A. Macroeconomic Balance Approach

B. Equilibrium Real Effective Exchange Rate Approach

C. External Sustainability Approach

D. Improving Competitiveness

V. Reserve Adequacy Assessment

A. Standard Measures of Reserve Adequacy

B. A Model-Based Approach to Reserve Adequacy

VI. Conclusion

References

Boxes

1. The Common Monetary Area (CMA)

2. The Balance Sheet Approach

3. Stress Tests: Assumptions and Methodology

4. Exchange Rate Assessment: Assumptions and Methodology

5. New Approach for Estimating Reserve Adequacy

Figures

1. Wage Bill Comparison in Sub-Saharan Africa, 2006–10

2. Swaziland: Public Debt Sustainability: Bound Tests

3. Swaziland: External Debt Sustainability: Bound Tests

4. Swaziland: Composition of Government Liabilities, end-2010

5. Swaziland: Doing Business Ranking, 2010–11

6. Swaziland: Exchange Rate Assessment

7. Swaziland: Reserves Compared with Other Countries

8. Reserves Adequacy, New and Traditional Metrics, 2011

Tables

1. Swaziland: Public Sector Debt Sustainability, 2006–16

2. Swaziland: External Debt Sustainability, 2006–16

3. Swaziland: Net Intersectoral Asset and Liability Positions, 2010

4. Swaziland: Banking System Financial Soundness Indicators, 2006–11

5. Swaziland: Optimal Level of Reserves