In this small, landlocked economy, subsistence agriculture occupies more than 80% of the population. The manufacturing sector has diversified since the mid-1980s. Sugar and wood pulp remain important foreign exchange earners. Mining has declined in importance in recent years with only coal and quarry stone mines remaining active. Surrounded by South Africa, except for a short border with Mozambique, Swaziland is heavily dependent on South Africa from which it receives nine-tenths of its imports and to which it sends more than two-thirds of its exports. Customs duties from the Southern African Customs Union and worker remittances from South Africa substantially supplement domestically earned income.

The government is trying to improve the atmosphere for foreign investment. Overgrazing, soil depletion, drought, and sometimes floods persist as problems for the future. More than one-fourth of the population needed emergency food aid in 2002 because of drought, and more than one-third of the adult population was infected by HIV. 2004 Swaziland acknowledges for the first time that it has one of the highest AIDS rates in the world, with almost 40% of adults infected with HIV. Prime Minister Themba Dlamini has declared a humanitarian crisis due to the combined effect of drought and land degradation, increasing poverty and HIV/AIDS. The United Nations special envoy on AIDS Stephen Lewis said “Swaziland stands alone with the world's highest rate of HIV infection after nearby Botswana made headway against the deadly pandemic.”