MOZ UNREST IMPACTS ESWATINI SUGAR INDUSTRY

MBABANE – The political unrest in Mozambique has significantly impacted the Eswatini sugar industry in terms of transportation of products to overseas markets.

This challenge was highlighted by the Eswatini Sugar Association (ESA) Financial Director Andrea Mendes during the International Finance Corporation (IFC) and Business Eswatini (BE) Private Sector Day held on Wednesday. Mendes said due to the political unrest in Mozambique, the local sugar industry has been impacted, as they had to find alternatives to export sugar to the international markets. It is worth noting that ESA exports locally-produced sugar to the United States of America (USA) through the Mozambican sea ports.

Violent protests have wreaked the southern African country of Mozambique after a disputed national election in October. Electoral irregularities and claims of vote rigging have led to what human rights activists have called State-sanctioned oppression and human rights violations. More than 40 people have been killed in post-election violence so far. Mendes said this political unrest and other geopolitical conflicts have caused disruptions in the supply value chains not only to the sugar industry, but also across many other sectors.

The financial director stated that other challenges faced by the local agricultural sector include the rise in farming inputs and fuel costs. She added that climate change has also caused significant disruptions, as yields have significantly dropped. She highlighted that sugar cane yields have dropped by at least 21 tonnes per hectare, which is a huge number. She said under the climate change challenge, farmers are struggling to get their crops insured. She said, however, of late there has been some slight improvement in this space as insurance providers are reporting an increase in uptake of insurance covers.

She said climate change has also caused disruptions in the distribution of rainfall, leading to a drop in the availability of water. She said when it is expected to rain, there is no rain but extreme heat and storms here and there. She said storms cause so much havoc, as they destroy crops. Mendes added that another challenge faced by farmers is adherence to sustainable standards, as consumers are now on high alert for what they consume. She added that another big issue faced by farmers is funding.

Meanwhile, EswatiniBank Managing Director (MD) Nozizwe Mulela spoke about the challenges faced by micro, small and medium enterprises (MSMEs). Mulela said the biggest of them all is the access to finance by the MSMEs. She said it is important to look into this challenges’ root cause, which is failure to meet stipulated requirements. The MD said as banks, they admit that the requirements are often a stumbling block for some MSMEs. She said, however, the requirements are a must before granting any loans.

Financial

Mulela then pleaded with institutions like the World Bank to come in handy and assist the local financial institutions by bringing the necessary funding that can then be distributed to the MSMEs. She said the available funds are often not enough to support the MSMEs sector, hence the need for support from the international bodies. Meanwhile, the World Bank Group has reaffirmed its support for the growth of Eswatini’s private sector, particularly in sectors like the agribusiness sector.

This commitment was made by Mehita Fanny, the International Finance Corporation (IFC) Country Manager for Comoros, Eswatini, Madagascar, Mozambique and Seychelles. Fanny made her remarks during the IFC private sector day held under the theme ‘Inclusive Growth: Enabling Sustainable Private Sector Growth in Eswatini.’ The Private Sector Day is the culmination of years of collaboration and research between the World Bank and Eswatini, and it serves as a platform for dialogue, exchange and partnership.
 

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