PRIVATE SECTOR AT HEART OF MSME POLICY 2024–2029

MBABANE – The Eswatini MSME Policy 2024–2029 is set to transform the country’s micro, small and medium enterprises (MSMEs) into formalised, competitive businesses that can drive economic growth. The policy seeks to lessen the burden on government to create jobs and instead empower the private sector to take a leading role in employment creation and economic expansion. Government does not engage in trade; instead, the private sector is the key driver of economic growth and prosperity. Therefore, government is responsible for creating an environment that enables businesses to thrive.

Strategies and policies

Achieving this requires the right set of strategies and policies that clearly define the roles of each partner in ensuring the success of these initiatives. It is essential to foster an environment conducive to sustainable enterprises and establish the right mix of policies for business linkages, all of which will be fully supported by the reviewed MSME National Policy 2024–2029.
With over 70 per cent of MSMEs currently operating informally, the policy highlights the urgent need to formalise businesses, increase output and ultimately boost national income through taxation. By improving the MSME ecosystem and targeting different business subsegments, the policy aims to create a more conducive business climate.

According to McKinsey & Company, governments should focus on three key areas to support MSMEs: boosting business confidence, enabling growth—especially for high-performing enterprises—and increasing competitiveness. The revised MSME policy adopts this approach, emphasising the role of the private sector in driving economic change.
The private sector has long been recognised as the engine of economic growth. In Eswatini, MSMEs account for a significant share of employment and production, yet their potential remains underutilised due to structural challenges.

The policy seeks to change this by empowering businesses and creating a thriving entrepreneurial ecosystem. One of the biggest contributions of the private sector is employment creation. As government aims to reduce the pressure of job creation on the public sector, MSMEs are expected to absorb a larger share of the workforce. By fostering a supportive environment for business expansion, the policy will help MSMEs grow and hire more workers, ultimately reducing unemployment. For Eswatini to strengthen its trade position, MSMEs need greater access to regional and global markets.

The revised policy emphasises the need to support export-oriented MSMEs by improving trade facilitation services, developing financing mechanisms and enhancing technical capacity. This will allow businesses to scale up production and compete internationally. A strong private sector fosters innovation and economic dynamism. The MSME policy encourages businesses to adopt new technologies and improve service delivery. By investing in digital transformation and research, MSMEs will be better equipped to compete in a rapidly evolving market.

The Eswatini MSME Policy 2024–2029 introduces several reforms aimed at easing business operations and strengthening the private sector. One of the major obstacles facing MSMEs is a complex regulatory environment. The policy aims to simplify business registration, tax compliance and licensing procedures. By reducing bureaucratic barriers, government hopes to encourage more businesses to formalise and access growth opportunities. Access to funding has been a longstanding challenge for MSMEs.

The policy proposes several financial interventions, including:

• Credit guarantee schemes to minimise lending risks.

• Dedicated MSME loan facilities with flexible terms.

• Increased investment in venture capital and equity financing.

These measures will improve financial inclusion and provide businesses with the resources needed for expansion. To enhance business sustainability, the policy focuses on entrepreneurship training, digital skills, and financial literacy programmes. Collaborations with private sector organisations, vocational training institutions and financial service providers will ensure that MSMEs receive the necessary skills to thrive. A key element of the revised policy is the promotion of strong partnerships between government and private sector players. The establishment of industry-specific forums will allow businesses to engage with policymakers, address challenges and develop joint solutions for sustainable growth. While the policy provides a framework for MSME growth, certain challenges must be addressed to ensure its success.

Challenges:

• High informality rates continue to limit business scalability and access to financial support.

• Limited financial inclusion prevents MSMEs from securing the capital needed for expansion.

• Infrastructure gaps such as inadequate transport networks and digital connectivity hinder business operations.

• Regulatory inefficiencies slow down the ease of doing business.

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