Maguga dam provides irrigation water for farmers in the north eastern part of Swaziland as well as hydro-power generation
Swaziland is positioned between South Africa and Mozambique, placing it at the centre of the transport grid.
The country’s well-developed road and rail networks ensure that exports are able to reach regional markets hassle-free; telecommunications, rail and road networks extend to many Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (Comesa) countries, as well as continental and global markets.
Investment solutions
King Mswati III’s rallying call is that Swaziland’s wide range of unprocessed resources is vital to attracting investments into value added industries.
Exporting products from Swaziland is made easier by the proximity of seaports from neighboring countries: the Richards Bay and Durban seaports in South Africa are 350km and 500km away from Swaziland, respectively, and Maputo, in Mozambique, is 200km away.
Swaziland has developed an inland dry port, where goods are cleared for export outside the country, thus making exporting from Swaziland no different to shipping from the coast.
It also has a regionally linked electricity supply network that provides a reliable and competitively priced service to all businesses.
Added to that is a well developed and robust telecommunications system that includes mobile cellular systems and an abundant and consistent quality water supply.
There also are competitively priced factory buildings readily available from the Swaziland Investment Promotion Authority (SIPA) and private sector.
Swaziland has low levels of crime and the small population makes doing business a friendly, relationship-driven experience.
The monarchy and democratically elected parliament have maintained a unified, sound and peaceful climate that encourages business growth.
Swaziland’s growth potential has not been deterred by its relatively small size.
The country has positioned itself as an export-oriented economy, a position that is enhanced by strategic market access agreements covering about a billion people in Africa alone.
For example, market access from Swaziland is guaranteed as the country is signatory to a number of preferential trade agreements that ensure duty free access into COMESA, SADC the US, EU, Asia, regional and international markets. including South America.
Industry structure
Crucial investments have been made in the aviation, rail and road networks, telecommunications and energy sectors to facilitate the seamless flow of trade and investment into the SADC region, greater Africa and beyond.
These efforts have been a major catalyst for growth and have enabled the country to navigate and survive some of the challenges that resulted from the global economic meltdown.
The government has placed emphasis on all sectors to ensure that they continue with strategies and programmes to further diversify Swaziland ’s economy.
The Swazi economy is fairly diversified, with agriculture, forestry and mining accounting for 9% of gross domestic product (GDP), and manufacturing including textiles and sugar-related processes representing 42% of GDP.
Over the past 30 years the economy of Swaziland has been characterised by enormous progress emanating largely from foreign direct investment in mining, agribusiness, forestry, tourism and manufacturing.
For instance, manufacturing accounts for about 65% of total foreign direct investment and employs 26% of the country’s workforce.
Textiles and garment production play a significant role in Swaziland’s manufacturing sector, offering a wide range of services, including spinning, weaving, knitting, dyeing, and finishing.
Swaziland provides textiles and garments to some of the largest retailers in the US, Europe and South Africa.
The country has played host to a number of multinational corporations, such as the Coca-Cola Concentrate factory, YKK Africa, Cadbury’s (now Mondelez International) and SABMiller.
Swaziland also exports citrus and beef for major markets such as the European Union, US and Asia With literacy rates exceeding 90%, there is abundant hardworking, competitively available, skilled and trainable human capital that broadens the competitive edge of Swaziland in the region.
Moreover, investors can tap into a wealth of talent in the form of thousands of Swazi people who have taken positions in the region and internationally, in major industries such as finance, mining, engineering, aviation, science, research and medicine, the legal sector and in government services.
Industrial infrastructure
Swaziland has modern infrastructural facilities that are suitable for export oriented and global companies that want to gain a foothold in global exports and reduce the costs of their production or operation, while ensuring a safe and well established location.
Matsapha Industrial Estate is the largest and most active development of its kind in the kingdom, with manufacturing concerns of diverse types and sizes occupying premises of totaling more than E450-million in value.
The country’s inland container depot is also located in Matsapha.
Recently completed expansion and rehabilitation programmes placed under SIPA’s control adds 130 hectares to provide primary infrastructure of world standards.
Ngwenya Estate is just a kilometer from the main border to Johannesburg, the industrial hub of neighbouring South Africa, and serves as a rapidly expanding adjunct site.
Another site is Nhlangano estate, which is adjacent to Swaziland’s closest border crossing to the South African port of Durban.
Swaziland has developed excellent industrial estates in the key urban centres where medium-sized and large businesses are found.
The industrial sites are fully serviced with reliable infrastructure and utilities including:
Incentives
The government, under the Investor Roadmap Programme launched by His Majesty King Mswati III in April 2012, has committed itself to fully supportting the establishment of productive enterprises and to reducing the cost of establishing and operating a business. This includes taxation.
To this end, corporate tax has been reduced to 27.5% effective July 2013.
There are a number of otherinvestment incentives that have been put in place that qualifying investors may take advantage of.
The government encourages economic development through private sector support towards foreign and local investments and some of the available programmes include concessional tax incentives.
Some of the available programmes include tax incentives, capital allowances, duty free access on capital goods, duty free access on raw materials (such as agricultural inputs and equipment), an export credit guarantee scheme, full repatriation of profits, legal protection of investments and provision of loss cover.
A five-year and two-year work and residence permit is available for expatriate directors and senior management of new enterprises, respectively.
These are available for expatriate directors, senior management and key technical personnel of new enterprises.
The government has provided additional support to the industry by constructing competitively priced factory shells.
This available infrastructure eases the start-up hurdles for investors who are new to the country.
Opportunities
Agriculture is traditionally the backbone of Swaziland’s economy and is a large contributor to the country’s GDP.
The diverse agricultural activities that take place in the country include the farming of sugar cane, citrus fruit, cotton, forestry, livestock, maize, other cereal crops and other undertakings that generate foreign exchange earnings.
Investment opportunities exist in the following areas: baby vegetables, vegetable drying, frozen vegetables, tomato sauce production, peanut butter production, processed meat, dairy products, goats, cassava processing and starch, tobacco growing, aquaculture, processing spice from hot and green peppers, floriculture, cotton, engineering, steel, wool and mohair.
Manufacturing activities undertaken include mining drills for the European markets, refrigeration for domestic and commercial purposes. Steel and wire goods are produced for the southern African and local markets.
This industry is set to grow substantially from the mining sector, which is currently being revived.
Manqoba Khumalo, general manager at Coca-Cola Swaziland, says: “Swaziland is a crucial link in our global supply chain. We have invested millions of dollars over the past 20 years to create a world class manufacturing facility that enables us to export not only into Africa, but to a global market.”
Opportunities for investment in the manufacturing sector include:
• Electronic components manufacture and assembly;
• Automobile spare parts manufacture;
• Processing of hides and skins (for leather goods and footwear);
• Pharmaceuticals;
• Biotechnology; and
• Furniture and other timber related manufacturing
Bruce Henderson, group chief executive for the Rhodes Food Group, based in Stellenbosch, says: “Our fruit processing facility in Swaziland produces the highest quality food products for global supermarket brands in the UK, mainland Europe, Australia and the US.
“This is in part thanks to the climate, beautiful soils, abundant water and above all, a supportive government, where we have our own farms and lease some from the government.
“For us, it would be very difficult to export competitively from southern Africa, except from Swaziland, where we further benefit from the duty free access into the Europe and US markets” Food, confectionary and beverage investment opportunities include:
• Fruit and vegetable preservation and bottling;
• Bottling of pickles and chutneys;
• Bottling of jams and jellies;
• Processing of beans and other legumes;
• Dairy products (such as yoghurts and custards);
• Ice bottling of spring-water and flavoured spring water; and
• Juice squeezing (fresh juice from oranges, grapefruits and guavas, among other fruits) for sale to restaurants and the public Andrew Taylor, managing director of YKK Southern Africa, says: “Swaziland has offered us a safe, stable and predictable investment climate for over 30 years.
“A dedicated and respectful labour force, good road and rail infrastructure and immediate access to regional markets have kept us here.”
General investment opportunities include:
• Development of a state-of-the-art government owned international conference centre;
• Development of a golf estate, casino and supporting facilities;
• A holiday housing estate to cater for mostly foreign holiday-makers; and
• There are a number of opportunities in the textiles sector, including footwear manufacturing.
About Swaziland’s investment promotion authority
Swaziland Investment Promotion Authority (SIPA) was created through an Act of Parliament, the Swaziland Investment Promotion Act 1998 and was formally launched in April of the same year.
SIPA is a Category A Public Enterprise and is wholly funded by the Government of Swaziland, with initial assistance from the European Union.
SIPA’s Mission is to:
“Promote and facilitate foreign direct and local investment in Swaziland, with the objective of creating the wealth necessary to enhance the Social and Economic Development of the Kingdom and its people.”
The SIPA objectives are:
• to attract, encourage, facilitate and promote local and foreign investment in Swaziland;
• to initiate, co-ordinate and facilitate the implementation of government policies and strategies on investment;
• to provide a one-stop information and support facility to local and foreign investors; and
• to advise the minister on investment policies, strategies, proposals and suitable incentives for investors.
Guarantees by the Swazi government
Non-discriminatory treatment of foreign investments;
100% foreign ownership of foreign investments;
Guaranteed repatriation of funds;
Guarantees against expropriation and government interference; and
Allowance to bring in expatriate technical and senior staff.
This article has been paid for by the Swaziland Investment Promotion Authority. Contents and photographs for this page were supplied and signed off by the advertiser.
