ESWATINI, UAE SIGN INVESTMENT PROTECTION AGREEMENT

MBABANE - In a significant step towards strengthening economic ties, Eswatini and the United Arab Emirates (UAE) have signed the agreement on promotion and reciprocal protection of investments. This landmark deal is set to enhance investment flows, stimulate economic development and provide legal protections for investors from both nations. The agreement was signed yesterday, by Eswatini’s Minister for Commerce, Industry and Trade Manqoba Khumalo, alongside UAE’s Minister of State for Financial Affairs, Mohamed bin Hadi Al Hussaini. This signing follows years of negotiations and comes after the conclusion of the avoidance of double taxation agreement in August 2024, further solidifying financial cooperation between the two countries.

Instrument

The avoidance of double taxation agreement is poised to foster greater economic cooperation and stimulate cross-border investments between the two nations. The document targets the elimination of double taxation on income and capital and is not merely a legal instrument, but a catalyst for deepening bilateral relations. By removing the burden of double taxation, the accord opens the door for increased trade and investment flows, creating a more favourable environment for businesses in both Eswatini and the UAE.  This move is expected to be particularly beneficial for investors seeking opportunities in the emerging markets of Eswatini, which is increasingly positioning itself as a gateway to Southern Africa.

The agreement signed yesterday applies to investments made both before and after its entry into force, ensuring that investors from either country are protected under the host nation’s laws and regulations. However, it explicitly excludes claims arising from disputes that occurred before the agreement was enacted. Furthermore, both parties will encourage private sector collaboration to explore and expand investment opportunities, boosting trade and economic development. Each country is also required to uphold its investment-related obligations, though taxation matters remain outside the scope of this agreement.

A key component of the agreement is the establishment of a joint committee on investments, which will oversee its implementation. This committee will be composed of representatives from both nations and will meet at least once a year, alternating between Eswatini and the UAE. The committee may also invite private sector representatives and other experts to provide insights into enhancing investment cooperation.

This agreement is expected to attract more foreign direct investment (FDI) into Eswatini, particularly in sectors such as infrastructure, energy, agriculture and technology. By creating a stable and predictable investment climate, the deal provides legal assurances that are crucial for investor confidence. Minister Khumalo highlighted the importance of the agreement, stating, “This partnership marks a new era in Eswatini’s economic landscape. It opens doors for increased investment, job creation and technological exchange, which will benefit both our nations.”

Investments

The agreement solidifies the UAE’s commitment to fostering economic partnerships with African nations, underscoring the agreement’s role in facilitating sustainable economic growth.
With the agreement now in place, stakeholders in both countries are optimistic about its implementation. The first meeting of the Joint Committee on Investments is expected to take place later this year, where discussions on specific investment projects and opportunities will commence. As Eswatini continues to position itself as a competitive investment destination, this agreement with the UAE is a testament to the country’s commitment to economic expansion and international partnerships.

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