Soon thereafter, Finance Minister Rijkenberg spoke of the empowerment of citizens and the provision of incentives for MSMEs, saying that the country needs to leverage on MSMEs’ potential to build an economy that works for everyone, and “it is essential that we create new jobs, protect and grow existing businesses and attract foreign direct investment”. He cited as notable milestones attained thus far the construction of the Manzini Trade Hub, the establishment of an Informal Traders Revolving Fund, the development of a leather and leather products subsector, and participation in international forums aimed at advancing the agenda of MSMEs’ growth and promotion. The last-mentioned, Minister Rijkenberg pointed out, is dependent on support to access affordable finance, advisory services, infrastructural mechanisms and the availability of skilled labour.
He said that MSMEs face a relatively acute challenge in terms of attracting and retaining their workforce. Furthermore, inability to meet systematic and internationally accepted quality standards remains a major challenge for local MSMEs with regard to penetration or access to international markets for their products. Rijkenberg highlighted the fact that, as a remedial strategy, government has not only entered into various trade agreements, but has also taken “innumerable steps” to encourage the growth and promotion of the industrial sector. In addition and to help MSMEs gain access to international markets, a national Quality Assurance structure was set up to strengthen their capacity to provide international best practices and standards.
The Finance Minister pointed out that new trade opportunities are being created for the business sector to take advantage of the most recent additions to Eswatini’s already-substantial list of advantageous trade agreements, namely the Economic Cooperation Agreement (ECA) with the Republic of China-Taiwan, and the African Continental Free Trade Area (AfCFTA). He said that manufacturing activity had recently rebounded in the wake of improved developments abroad, in particular the South African, American and European markets. The result was increased demand for the kingdom’s major exports such as food-processing output and the manufacture of beverages and textiles products. Other positive contributors to growth were said to include the service sector, specifically in the ICT subsector which continues to benefit from increasing innovation.
E-COMMERCE PLATFORM
Eswatini was during an African Union (AU) Extra-Ordinary Session officially unveiled as host nation of an AfCFTA support mechanism, namely the Southern Africa Regional Office of the African Electronic Trade Group eCommerce Platform. Government held an introductory Business Forum on the day preceding inauguration, and which featuring Business-to-Business Meetings, Plenary Sessions, Panel Discussions and a high-level Public Private Partnership (PPP) Dialogue. Topics that were discussed included:
• Towards an integrated, digitally connected and prosperous continent
• What are the priorities beyond the launch of the AfCFTA?
• MSME empowerment-training and capacity building in Africa
• Innovative financing and logistics services for business
• Digital infrastructure in Africa – how ready are we?
• PPPs for e-government and e-commerce development in Africa
Between-session presentations featured a cross-section of the continent’s leading economists and venerated politicians, while the guest list included a number of former and current Heads of State, representatives of the AU Commission, various SADC Ministers of Trade, top executives of the African Development Bank and the Afrexim Bank, representatives of several Regional Economic Communities, as well as leading lights from the private sector. A Memorandum of Understanding was signed between the Common Market for Eastern and Southern Africa (COMESA) Business Council and the African Electronic Trade Group: the latter has a vision “to transform Africa’s socio-economic environment by enabling African countries, communities, people and small and medium scale enterprises to leverage modern information and communication technologies”.
The Launch
At the Mandvulo Grand Hall the following day, His Majesty King Mswati III began proceedings on what he called “this historic occasion” by declaring that the country, as a member of the AU, considered itself privileged to have been selected to host a regional office of such strategic importance in the implementation of the AfCFTA. He said that Eswatini’s role will be to facilitate the marketing of goods from individuals and companies on a platform that provides easy access to what Southern Africa has to offer. The monarch described this as a paradigm shift from traditional online trading, as it brings a new e-commerce platform that will be marketing products for the entire region, and furthermore seeks to remove barriers to trade for small entrepreneurs, especially access to training, finance and markets. He said that consumers will have confidence in a marketplace that is regulated by policies of the AfCFTA.
The King urged all private sector stakeholders to use the facility as it will enable the marketing of products to regional, continental and global consumers: he pointed out that the country will, in essence, be responsible for “ensuring that no-one is left behind in accessing the benefits of being in a position to compete for the opportunities to be availed by the AfCFTA which, with the full participation of all AU Member States, presents a marketplace of over a billion potential consumers. His Majesty stressed that Eswatini is alive to the reality that in an increasingly globalising and paperless world, the digitalisation of commerce presents both opportunities and challenges, as evinced by a recent UN observation that while the digital economy will be worth US$23-trillion by 2025, the African continent is already trailing a considerable way behind.
Bridging the Divide
Expanding on the ‘digital-wealth gap’, the King spoke of digital platforms in certain countries accounting for 75 percent of all patents related to blockchain technologies, 50 percent of spending in the Internet of Things, over 75 percent of the cloud-computing market and about 90 percent of the market-capitalisation value of the top 70 digital platform companies. This “obvious and glaring digital divide,” the monarch opined, “therefore requires concerted global efforts to ensure that the gains in the digital economy are widely spread to include the majority of people, who are currently reaping little from it.” Continuing, His Majesty said that the new e-commerce platform will not confine citizens and private sector participants to being mere users and consumers, but enable the emergence of producers, exporters and innovators, thereby creating opportunities for enjoying a meaningful share in digital prosperity.
VALUE-ADDING
Amid considerable fanfare, a gala event saw food-processing megacompany, Kellogg-Tolaram (Pty) Ltd (K-T), officially establish a manufacturing-base in Eswatini.
Minister Khumalo disclosed that government had courted K-T when the latter was on the verge of investing elsewhere: he described the negotiations as “a very difficult challenge, but our Strategic Roadmap emphasises an export-driven economy led by the private sector and built around five pillars that include manufacturing and agro-processing, so the potential benefits of a food-based undertaking of this magnitude were too vast, meaningful and obvious to let slip by…we thank K-T for choosing Eswatini”. He added that the project is foreseen as one of many that will jointly serve to turn around the country’s economy in the medium term, while also bringing a boon in the more immediate future. The many benefits to Eswatini of K-T’s presence are detailed in Foreign Trade and Investment.
New Moniker, Same Quality
Long-time investor and forex-earner, the value-adding dairy-processor Parmalat Swaziland, has changed its name to Lactalis Eswatini: the company declared in a statement to the media that ‘A fresh era arrives for the Eswatini dairy industry, as a new player enters the local market’. Continuing, the announcement revealed that Parmalat had decided to incorporate the country’s name-change with the group’s global alignment toward its parent company, namely the Lactalis Group. Consumers and stakeholders were assured that the change was in name only, and would not impact the company’s existing range of products, brands, projects or business operations. Lactalis Eswatini also emphasised that it would “remain the home of quality and trusted brands such as Umcenge, Emndeni, Emvelo, Eselwa, Lobhalaza, Parmalat, Cabana, Melrose, Président and SteriStumpie, as well as PureJoy and Galbani”, which are familiar brands and said to hold strong positions across several dairy product categories.
Historically, Parmalat Swaziland became part of the international Lactalis family in 2011, when Parmalat was bought by the Lactalis Group. The local name change to Lactalis Eswatini was regarded as not only incorporating the kingdom’s name change, but also marking the final step towards fully integrating the Eswatini operations with its international parent company: “In Eswatini, the expertise and legacy of the international Lactalis Group now merges with local dairy know-how and passion that has long provided jobs and wholesome dairy products. Indeed, the name change coincides with the 20th anniversary of the company in Eswatini.” Lactalis Eswatini Country Manager, Martin Herbst, said it was an exciting step for the local dairy industry and showed that a global dairy group has confidence in the region’s business opportunities, and accumulated expertise now joins forces with a proud French family heritage dating back to the early 1900s.
Household Name
Eswatini Fruit Canneries is a Rhodes Food Group (RFG) subsidiary which was established in 1954 when pineapples were first grown commercially in the kingdom. Situated in the fertile Malkerns Valley, it is today a leading producer of processed pineapple and citrus products: it remains both the sole canning operation of its kind in Eswatini and, via its extensive, self-owned plantations, the country’s primary grower of pineapples. The processing plant maintains high food-safety standards, with annual HACCP and BRC certifications in place. The product range comprises canned citrus (orange and grapefruit segments), canned pineapple (slices, pieces and crush), citrus and pineapple juice concentrate, plus a range of prepared fruit and jelly products packed in plastic cups, as well as assorted jams and marmalades in jars and cans. An E20-million jam-production plant was recently added to the factory and it immediately achieved a noteworthy increase in market-share.
RFG is South Africa’s leading manufacturer of canned fruit and jams. The group’s brands continued to gain market share across core product categories, with the Rhodes brand being the country’s market leader in canned fruit, canned pineapple and canned tomato. The group in recent years invested a total of around ZAR382-million in capital projects: these included the ongoing development of new pineapple plantations in Eswatini. On the medium-term outlook, CEO Bruce Henderson said that the group expects to maintain the current positive growth momentum, based on its strong turnaround performance, robust regional sales, expanding margins and the recovery in the international business. Turnover growth will be supported by expected increases in the export of fruit snacks in cups to the USA, and higher canned fruit exports.
Seal of Approval
The Ministry of Commerce, Industry and Trade on World Accreditation Day announced that a total of seven laboratories in Eswatini have thus far been accredited by the Southern African Development Community in Accreditation Services (SADCAS): the latter is the multi-economy institution which accredits all conformity-assessment bodies operating the SADC’s 13 member states. For its part, World Accreditation Day is a global initiative jointly established in 2008 by the International Accreditation Forum (IAF) and International Laboratory Accreditation Cooperation (ILAC) to raise awareness of the importance of accreditation-related activities.
Principal Secretary (PS) in the Ministry, Siboniso Nkambule, said that accreditation was accepted worldwide and used by governments as the most transparent and non-discriminatory mechanism of ensuring the competence of conformity-assessment service providers in both the voluntary and regulatory areas: accreditation thus provides peace of mind and assurance that the products and services used in construction, for example, have been verified against national and international standards. He said that Eswatini also has a National Accreditation Focal Point (NAFP), which sits in the Regulatory and Quality Infrastructure-Development Department in the Ministry of Commerce, Industry and Trade, and acts as a link between conformity-assessments bodies in the kingdom and SADCAS. The NAFP is responsible for coordinating, administering, promoting and marketing accreditation activities in Eswatini.
Unpacking the theme, ‘Accreditation: Adding Value to the Supply Chain’, Nkambule began by describing a supply chain as the system of organizations, people, activities, information and resources involved in moving a product or service from supplier to customer, while supply chain activities transform raw materials and components into a finished product that is delivered to the end-user. Furthermore, they consist of everyone involved in getting a product or service ready, including providers of raw materials, manufacturers, transportation companies, wholesale warehouses, in-house staff, stock rooms and the checkout operator at the cash register. On yet another level, the PS said, it also includes the tasks and functions that contribute to moving the product, such as quality control, market research, procurement and strategic sourcing.
Nkambule said it was thus clear that the global nature of supply chains and retail markets requires that businesses have to operate in multiple and often differing regulatory environments, and determining the quality, authenticity and traceability of raw materials or components requires credible and trustworthy information. To make matters yet more complex, as innovation accelerates and the lifecycle of products shortens, markets become more unpredictable and exert increased pressure on supply chains: businesses also need to manage their exposure to risk or disruption from data security breaches or system failures. Continuing, Nkambule pointed out that procurement was often responsible for up to 70 percent of companies’ expenditure, so any disruption could affect profitability, brand reputation and customer loyalty.
The result is that accreditation, underpinned by internationally agreed standards, adds value to supply chains as businesses seek to maximise value and satisfy contractual terms while maintaining a level of confidence that products meet technical specifications and are safe to use. With some 80 percent of trade involving elements of testing, calibration, inspection and certification activities – collectively known as conformity assessment – the independent evaluation of these conformity-assessment bodies against recognised standards to ensure their impartiality, competence and consistency, plays an important role in reducing the costs of trade and doing business, enhancing technology transfer and increasing investment. The PS concluded by encouraging Swati businesses, organizations, manufacturers and government suppliers to embrace accreditation and make it work for the kingdom.
Guided Beginnings
Eswatini’s Royal Science and Technology Park (RSTP) used the occasion of admitting 12 new start-up companies under a UNDP-supported programme to announce that its Incubation Service now had 29 fledgling enterprises under its wing. RSTP Senior Communications Officer, Senzo Malaza, said that while the institution was pleased to see a number of young people being guided into entrepreneurship, the tally of women-led companies being incubated fell somewhat short of RSTP’s declared vision regarding the inherent potential of all people. He said that the current scenario notwithstanding, RSTP remained optimistic that as it continues providing the Incubation Service, “ever more women will join, and before too long Eswatini will have many women involved in the kingdom’s business arena”.
Malaza also disclosed that, as the crux of RSTP’s ultimate aim is to help innovative start-ups and SMEs become bankable and competitive, the RSTP as part of the induction of the newly admitted start-ups, hosted a training and networking event to which all 29 companies under incubation were invited. Participants were taught, among other things, how to raise money for their businesses: Malaza explained that the exercise was in line with the services that RSTP offers to its mentees and which include capacity building and networking, fundraising support, business facilitation and intellectual property protection, among others.
Twin Components
RSTP comprises two divisions, namely IT Park and Biotechnology Park, which jointly utilise just over 300 ha of industrial development land that is shared between research laboratories, administration centres and residential buildings.
Biotechnology Park is a multipurpose platform for R&D in bio-related technologies, production, marketing and trading. It houses the Biotechnology Research Centre, Incubation facilities, Service Centre and Agricultural-related Biotechnology facility e.g. pharmaceutical. Core activities:
Knowledge Generation
-Research Laboratory facilities support research and development efforts in biotechnology in order to optimise the use of natural resources in the Kingdom, and to facilitate the uptake and commercialisation of that research: the primary focus is on medical, industrial and agricultural biotechnology research
– Partner with local university science departments
Knowledge Commercialisation
– A Technology Transfer Office will assist in finding the best route to market for new biotechnology innovations produced in Eswatini
– A Biotechnology Incubator will provide business and technical services for start-up biotechnology companies: those that are still in their initial development stage will housed in the Business Centre
Knowledge Awareness
– Biotechnology Park provides platforms to showcase global and national innovations in Science, Technology, Engineering and Mathematics (STEM), esp. in the field of biotechnology
– Biotechnology Park serves as a focal point for various Regional Bioscience Networks (e.g. SANBIo): this enables more efficient communication between national bioscience practitioners and the networks, leading to faster awareness of opportunities to pursue and needs to be met by local researchers and their supporting agencies
IT Park is the hub of IT-driven services and products, a platform for research and development in IT, production of high-tech products, capacity building in latest technologies, marketing and trading. IT Park is situated at Phocweni, just five minutes from Biotechnology Park, and shares the ‘One Stop’ facility that creates an enabling environment for the investor wishing to settle within RSTP. The IT Centre houses the following four Divisions:
• The National Contact Centre (NCC) is a business unit and one of the many initiatives taking Eswatini to Developed Nation status. It is also the country’s first facility of its kind that offers world-class business-process outsourcing solutions. The Centre seeks to address issues that arise from the rapid changes taking place in the business environment, be they political, economic, regulatory, environmental, social, legal or technological. To address said changes, the NCC uses the latest innovative technologies and a highly skilled workforce to steer businesses forward through offering outsourcing solutions while client-enterprises focus on their core business. This offering goes a long way towards impacting positively on revenues and improving operational efficiencies within business communities locally, regionally and globally.
• Business Incubator (BI) Eswatini is a not-for-profit entity which supports SMEs that are developing innovative products and services (or ideas) in the IT sector, including (but not limited to) software, computer hardware, telecommunications and the Internet. The business incubation service offered by RSTP is a comprehensive and highly flexible combination of business development processes, infrastructure and people, designed to nurture innovative start-ups so that they survive and grow through the difficult and vulnerable early stages of development. This service contributes to investment (through local enterprises) by removing barriers to entrepreneurship, market access and innovation. The country as a whole benefits through job creation and value addition which boosts GDP.
• The Advanced School of IT (ASIT) is affiliated with Aptech Limited, which is a global retail and corporate training solutions provider with a presence in more than 40 countries and a network of over 1 300 training centres worldwide. This ISO9001:2000 certified educational support institution offers customised training solutions and learning content to schools, colleges, universities, governments and businesses. The goal of ASIT under RSTP is to have an ICT-literate Swati society capacitated in Software Development, Multimedia, Cyber Security & Forensics, as well as Hardworking & Networking.
• National Data Centre (NDC): ICT has become the major factor that ensures companies are able to gain competitive advantage through quick response to customers’ needs. The high costs of ICT infrastructure have had a negative bearing on said advantage, which has reduced budgets for their core services. Outsourcing ICT services through the utilisation of an external Data Centre can serve as a solution to high Total Cost of Ownership (TCO): RSTP’s NDC provides IT-managed services through the provision of advanced technology infrastructure that will enable companies to outsource their ICT functions and services, and thereby focus the bulk of their effort and budget on the delivery of their core products and services.
RSTP is designated as a Special Economic Zone (SEZ), offering lucrative financial and/or tax incentives. The qualifying criteria for an Operator or Enterprise or Investor intending to locate within the SEZ can be found at https://rstp.org.sz/
INVESTORS/FINANCIERS
The government-owned Eswatini National Industrial Development Corporation (ENIDC) states that its mission is to invest in economically and financially viable, technically feasible and environmentally friendly projects that have sustainable, medium to long-term returns and growth effects on the kingdom’s economy and stakeholders. The vision is to be Eswatini’s industrialisation frontrunner by 2022. The Corporation currently provides funding structures comprising one or a mix of Debt, Equity, Mezzanine and Venture Capital, and supports undertakings in a wide range of sectors. Those that relate primarily to this chapter include, but are not limited to:
• MANUFACTURING – The variety of sub-sectors necessitates varying selection-criteria that are based on project types, development stage in the business cycle, cost associated with the investment and the general performance of the sub-industry within Eswatini, the region and the world. A non-exhaustive list of clusters includes:
o Precision Engineering
o Electronics
o Biomedical Manufacturing
o Pharmaceuticals Manufacturing
o Chemicals
o Transport Engineering
o General Manufacturing
o Plastic and Paper
o Food and Beverages
o Clothing and Textiles
• INFRASTRUCTURE AND ENGINEERING – As a means to enhance industrial development and spur economic growth in Eswatini, ENIDC is interested in funding new and existing corporations that are aiming to expand output, markets and operations.
• TECHNOLOGY – ENIDC encourages investments into new industries with an emphasis on invention and innovation. These enterprises must be geared to bring into the market new types of industries, or be improving existing technology ventures. The Corporation therefore also support projects that have graduated from incubation stage under the Royal Science and Technology Park (RSTP).
• AGRO-PROCESSING – ENIDC finances enterprises in most types of agricultural processing except sugarcane. The enterprises must possess strong properties of sustainability, and be biased towards organic production and processing, niche-market targeting and substantial innovation.
• FOOD AND BEVERAGES – ENIDC finances business undertakings in food processing and those that are within its value-chain. In order to support a broad-based growth approach, the Corporation encourages local enterprises to source their inputs from within Eswatini. The enterprises be must geared for long-term growth that is sustainable.
• MINING & BENEFICIATION – ENIDC realises the positive effects of extracting minerals from the ground and improving their economic value. As the country has rich deposits of a number of minerals, ENIDC is motivated to invest in the mining sector through establishments that will extract maximum value and spur economic growth. All establishments in this sector must be in compliance with the Ministry of Natural Resources’ laws and regulations.
Industrial Development Company of Eswatini (IDCE) was formed in 1987 and is a joint venture between government and three financial institutions:
• Eswatini National Provident Fund (61.95 percent)
• Eswatini Government (34.95 percent)
• Standard Bank Eswatini (1.55 percent)
• Nedbank Eswatini (1.55 percent)
The Company fulfils its role by promoting and investing in financially viable projects in sectors such as:
• Manufacturing
• Property Development
• Transport
• Agri-business
• Tourism
• Services
• SME
IDCE’s Product Offering:
• Corporate Loans and Equity Financing – With almost 30 years’ experience, IDCE has acquired in-depth knowledge and business skills that make it an ideal partner in equity participation that varies in accordance with the need on the table
• Agricultural Loans – for customers engaged in farming activities on both titled land and SNL
• Asset Leasing Finance – e.g. heavy machinery and equipment; assistance with the importation of requirements is also available
• SME Finance – Corporate loans are available to all sectors of the economy, with a keen focus on manufacturing, tourism, service industry, agribusiness and others
• Leasing of industrial buildings – IDCE owns a substantial part of Matsapha Industrial Site; buildings are scaled in sizes, making them suitable for fulfilling a variety of needs
• Advisory Services – Having operated in the local economy for many years, IDCE offers a wealth of knowledge and experience to share with all current and prospective clients
MINING & QUARRYING
At the launch of Eswatini’s Strategic Roadmap to 2022, the Minister of Natural Resources and Energy, Peter Bhembe, said that mining and energy were two of the main areas towards which development efforts would be directed, and in some cases were interdependent. One such instance in the country’s striving to generate its own power is the goal “to generate 300MW of electricity from fossil fuel”, which basically means to build a power station that will burn local coal.
(As researched by the Central Bank of Eswatini, the persistence of geological constraints continues to impact negatively on coal production volumes in the country, particularly yields.)
Minister Bhembe also disclosed that plans are afoot to revive the Ngwenya Iron Ore Mine, from which to produce steel locally and thereby turn the country into a manufacturer as opposed to a supplier of raw material. According to archaeologists, the Ngwenya site dates back some 42 000 years, making it the oldest mine in the world. Anglo-American Corporation between 1964 and 1977 removed an estimated 20-million tonnes of ore for exporting to the Far East: it built a railway line through Eswatini and Mozambique to a purpose-built loading facility at Maputo Harbour, all of which remains to this day. Anglo-American exited the kingdom in 1978, and the Ngwenya mine lay dormant until 2011 when, armed with new technology, the India-headquartered Salgaocar Group moved in to ‘mine’ the long-standing dumps. A low-grade, low-cost iron ore was extracted and shipped abroad via the existing infrastructure, until 2013, that is, when global demand for steel plummeted and took the price of iron ore with it. Unable to sustain this scenario, Salgaocar exited the kingdom in 2014.
National Offering
Eswatini also has deposits of gold, diamonds and various minerals, and government recently declared that it “wishes to reverse the decline of the mining industry by attracting new investment in the exploration for and exploitation of mineral resources”. Government acknowledged that in order to achieve this, it must establish an enabling environment for investors that is based upon modern regulatory arrangements and competitive terms. Recognising that private sector investors seek to operate profitably, be internationally competitive and satisfy their shareholders’ and employees’ expectations, government disclosed that it is establishing a Mining Bill that will promote and maintain:
• a conducive macroeconomic environment for mining investment
• a stable and predictable regulatory environment in which investors are treated in an even-handed and transparent manner
• access by investors to, and security of tenure over, areas of mineral potential
• a stable, predictable, competitive and fair fiscal regime
Government stressed that its policies are directed at large and small-scale mining operations, both of which must be conducted responsibly: neglect of the natural environment and harm to local communities is not acceptable, and Eswatini must secure the full economic and social benefits that mining-development offers. The Geological Survey and Mines Department in the Ministry of Natural Resources and Energy has technical reports and bulletins, together with geological maps, all of which are available to the public along with relevant information pertaining to the ‘Mineral Resources of Eswatini’ overview-document on www.gov.sz
