GOVT STEPS UP EFFORTS TO ATTRACT FDI

MBABANE – Eswatini is seeking to redefine itself through the economic recovery strategy as an export-oriented, private sector-led economy.  

Over the last year, overall investment trends in Eswatini included emphasis on attracting and expanding international companies investing in Eswatini. In that regard, the Government of Eswatini is stepping up its efforts to attract Foreign Direct Investment (FDI) as two investors from Russia and Dubai were in the country this past week. On Thursday, the Minister of Natural Resources and Energy, Prince Lonkhokhela, had a productive meeting with investors from RENOVA GROUP of companies, who were visiting the country from Russia.  These investors were here to discuss various projects, including power generation, mining, and iron ore smelting for steel manufacturing.

According to the Ministry of Natural Resources, RENOVA GROUP of companies initially met Prime Minister Russell Mmiso Dlamini while in Belarus. Dlamini then invited them to the country to further explore investment opportunities with relevant ministries.  RENOVA GROUP has reportedly expressed interest in investing in the country, not only in the energy and mining sectors but also in other industries. Additionally, technical discussions also took place between the RENOVA GROUP, the ministry, Eswatini Electricity Company (EEC) and Eswatini Energy Regulatory Authority (ESERA).

Presentation

Meanwhile, on the same day (Thursday), Business Eswatini (BE) hosted industry leaders for a strategic trade enhancement presentation by the Dubai Port (DP) World.  The meeting was organised by the Minister of Information, Communication and Technology, (ICT) Savannah Maziya, who had invited DP World, the leading DP World is an Emirati multinational logistics company based in Dubai, United Arab Emirates.  DP World specialises in cargo logistics, port terminal operations, maritime services and free trade zones. Maziya stated that even though this was not directly under the Portfolio of the Ministry of ICT, His Majesty King Mswati III charged all ministers to work towards attracting FDI.  It is worth noting that during the first quarter of the year ended March 2024, FDI showed a wider increase in FDI liabilities compared to the increase in the financial assets acquisitions.

According to the Central Bank of Eswatini’s (CBE) quarterly reports, this resulted in a net inflow of E896.1 million in the period under review. A net E305.8 million inflow was recorded in the third quarter. It was reported that FDI assets increased by E190.6 million following a decline of E304.1 million in the third quarter. Meanwhile, during the 3rd quarter of the 2023/24 financial year, the Ministry of Commerce, Industry and Trade hosted 16 inward investment attraction missions from countries such as India, United Arab Emirates, South Africa, Bangladesh, Togo and the USA.

Investors

According to the ministry’s annual report, to aggressively promote the country to investors, the ministry through the Industry Department further undertook five outward missions to Russia, United Arab Emirates and Botswana.  “As a result, five FDIs were facilitated in mining, energy, property and manufacturing. These companies invested a total of E600 million and created 2008 jobs,” read the report.  Eswatini is working to position itself as an exporter that is open for business.  Landlocked between South Africa and Mozambique, Eswatini is a member of two of the largest free trade regions on the continent: The Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA).  

Eswatini has historically had a service-based economy with companies from South Africa among the major employers, however, due to developments in the Africa Continental Free Trade Area (AfCFTA), strategic manufacturing for export will create new enthusiasm towards foreign market opportunities. Eswatini is an AGOA-eligible country; in 2021, the Government of the Kingdom of Eswatini issued a comprehensive three-year strategy to maximise the opportunities presented under the programme.  In 2022, government issued the National Development Plan, outlining challenges and opportunities aimed to bring Eswatini to First World status nations by 2028. 

The Eswatini Investment Promotion Authority (EIPA) advocates for foreign investors and facilitates regulatory approval.  Recent positive developments include the start-up of a 15 000sqm factory that began production this year of food products for the local and export markets.  Although the official government policy is to encourage foreign investment to drive economic growth, the pace of reforming investment policies is slow.  The policies and reforms the country’s energy (ESERA) and telecommunications (ESCCOM) regulators are pursuing to promote innovation and competition in their industries will be important barometers of the extent to which those markets will prove friendly for international investors.

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