Rapid Assessment of the Impact of the Fiscal Crisis in Swaziland From Evidence to Action:

1. Rapid Assessment of the Impact of the Fiscal Crisis in SwazilandFrom Evidence to Action: “Socio-Economic Policies for Child Rights with Equity” Workshop United Nations Swaziland Bangkok, Thailand July 17, 2012

2. Swaziland at a Glance • Lower middle income - GDP per capita of US$2,950 • High income inequality with poverty prevalence of 63% • High food insecurity (20% of households) • In the midst of severe HIV/AIDS epidemic with the highest HIV infection rate of 26% • Life expectancy declined from 63 years before the onset of the epidemic to 37 years recovering to 48 years in 2009 • Prevalence of orphans: 23%; OVC 45%

3. In 2011, Swaziland faced a severe fiscal crisis resulting from the global economic crisis • The fiscal crisis caused mainly by two factors: • A drop in Southern Africa Customs Union (SACU) revenue • High civil service wage • Government introduced a Fiscal Adjustment Roadmapin 2010 • Wage and hiring freeze • Delays and suspension insocial assistance (old age, OVC and other grants) • No systematic evidence on the impact of the crisis

4. A rapid assessment undertaken in 2011 to assess the impact of the fiscal crisis • In Nov. 2011, UN Swaziland undertook a nationally representative survey of 1,334 households • The survey aimed to generate systematic evidence on the welfare impact of the crisis, as well as transmission channels and households’ coping mechanisms • A joint UN initiative, led by UNDP, UNICEF and WFP • The survey made use of agencies’ comparative strength and existing structures for vulnerability assessments

5. Shocks experienced by households Distribution of Shocks in 2011, by Type of Shock (%) • Shock was defined as an event that altered household’s ability to provide for itself, eat in the manner it was accustomed to or affected what the household owned • 27% of households experienced at least one type of shock • The most frequently reported shocks are: high food prices and reduced labor income

6. Poverty is unequally distributed and So Were the Welfare Impacts of the Crisis Share of population living in poverty, In 2010, by household type (%) Coping strategies of households, by type of households (%)

7. The crisis worsened access to education and health care Cuts in education expenditures, by type of households (%) Cuts in health expenditures, by type of households (%)

8. The crisis adversely affected children’s access to education Cuts in education expenditures, by households vulnerability (%) • Almost one-fifth of households withdrew children from school • More than 10 percent of households moved children to a school of lower quality • Children from rural areas more likely to be withdrawn from school compared with children from urban areas (31 vs. 13 percent)

9. Key Findings of the Assessment • The crisis had significant adverse impacts on households’ and children’s welfare • Households relied mostly on ‘budget management’ as a copying mechanism, particularly on reduction in food consumption and education expenditure • The crisis had disproportional impacts on vulnerable groups including children, rural and female-headed households, and HIV affected households

10. From Evidence to Action

11. The assessment generated wide coverage in international and local media • IRIN – Integrated Regional Information Networks • Channel Africa • BBC Africa Service • The Wall Street Journal • AFP

12. UN Response to the Findings of the Rapid Assessment An UN-wide action plan developed: • Strengthen the Public Financial Management (PFM) framework, in collaboration with other donors (IMF, WB, AfDB and EU) – linked to UNDAF pillar 4 (governance) • Encourage employment and entrepreneurship, especially among the youth and women; linked to UNDAF pillar 2 (poverty and sustainable livelihoods) • Advise on developing comprehensive social protection schemes and improving social service delivery to the vulnerable households – UNDAF pillar 3 (human development; social service delivery) • A follow-up survey being considered to look at trends • Further look at food security impacts • More detailed examination of vulnerable groups

13. Formal social protection played a very limited role in mitigating the impact of the crisis Employment and Poverty Rates, by Tinkhundla, 2007- 2010 • Swaziland’s formal social protection schemes cover mostly life-cycle risks: • Cash transfers: old age grants, child welfare grants • In-kind transfers: OVC education grant, school feeding programs, Neighbourhood Care Points (community-based child care centres), health-fee waivers for old age and OVC • Existing social protection instruments covering livelihood risks (e.g., food distribution, food cash for work, public assistance grants) have very low coverage • Notable is particularly absence of labour market program

14. Action Plan – Social Protection

15. Action Plan – Social Protection (cont’d)

16. Lessons Learned • Timely decision of UNCT Swaziland to undertake the assessment and guidance it provided was critical for the success of the assessment • A joint analytical work that made use of agencies’ comparative strength - UN delivering as one • The report provided evidence from both macroeconomic and households perspectives • Effective outreach to media by UN Swaziland and regional center in Johannesburg ensured wide dissemination • Cooperation with government throughout the process, including on data collection and analysis, was key for a positive reception of the report by government • In the future, greater involvement of NGOs and the private sector will be sought

17. Thank you!