NEW CABINET POLICIES TO IMPACT BUSINESS

MBABANE -The Cabinet has approved over 100 policies in the 2024/25 financial year, with several having a direct impact on the business community.

These policies, which range from investment incentives to economic reforms, aim to boost growth, enhance trade and create a favourable business environment.
The most significant policies and their implications for businesses in the Kingdom of Eswatini include that of Special Economic Zone (SEZ) Licences.
The Cabinet approved developer and operator licences for FZ Capital (Pty) Ltd under the Special Economic Zone (SEZ) framework. This move is expected to attract investment into Eswatini’s industrial zones by offering tax incentives, relaxed regulations and improved infrastructure.
FZ Capital JSC, has obtained a licence to set up a free trade zone at KMIII  International Airport, a gold refinery, a VIP lounge, a bank and a vault.

manufactured

A free-trade zone is a class of special economic zone. It is a geographic area where goods may be imported, stored, handled, manufactured or reconfigured and re-exported under specific Customs regulation and generally not subject to customs duty. According to the Minister for Commerce, Industry and Trade, Manqoba Khumalo, FZ Capital is a joint venture company between iSwiss Bank and SENZA Eswatini.
Khumalo said through the establishment of the Free Trade Zone at KMIII Airport SEZ, the country will benefit from employment opportunities for semi-skilled and skilled emaSwati, diversification of the financial sector, provision of special financing packages for SEZ companies, to have faster and secure ways of doing international transactions, boost economic growth industrial expansion and economic development.

This landmark agreement, signed directly with His Majesty King Mswati III, marks a significant step forward for Eswatini, positioning it as one of the most competitive and attractive destinations for international investors and entrepreneurs, with tax incentives reaching as low as zero per cent. The establishment of a zero-tax SEZ will open Eswatini’s market to a wide range of global investors, with projections to register between 600 000 and 1 million new companies by 2025. This favourable fiscal environment, combined with advanced financial infrastructure and global banking connections, promises substantial benefits to both foreign entrepreneurs and the local population. The Free Trade Zone will provide direct access to multi-currency bank accounts, simplifying and streamlining international economic transactions.

In a press release published by the iSwiss Bank SA late last year, Christopher Aleo, Chief Executive Officer (CEO) and the driving force behind this Free Zone initiative, shared his vision for the project: “After spending many years in Dubai and working closely with Middle East royal families, I’ve had the opportunity to observe and understand the success models that have made cities like Dubai and other economic hubs international benchmarks for business.
“This experience, coupled with my travels to Georgia, Kazakhstan, Bulgaria and other countries, allowed me to integrate the best aspects of various Free Trade Zones worldwide, always keeping in mind the needs of modern digital entrepreneurs, consultants and freelancers.”

Another policy approved by the Cabinet is the national micro, small and medium enterprises (MSME) policy 2024.
The approval of the MSME National Policy is a landmark decision aimed at supporting small businesses. The policy will facilitate funding access, market development and skills enhancement programmes.
The 2024-2029 policy which was launched earlier this year sets out a comprehensive framework to address the challenges faced by MSMEs while positioning them as key drivers of economic development.

growth

The revised MSME policy seeks to create an enabling business environment, improve access to finance and support the growth of small enterprises through targeted interventions.
The policy comes at a time when 75 per cent of MSMEs in Eswatini remain informal, limiting their ability to access funding and government procurement opportunities. MSMEs contribute about 50 per cent of the country’s gross domestic product (GDP) and employ over 90 000 people, formalising these businesses is crucial for tax revenue growth and economic stability.  To tackle financing challenges, the policy strengthens existing initiatives such as the E45 million MSME Revolving Fund, the Small-Scale Enterprise Loan Guarantee Scheme and Export Credit Guarantee Scheme.

Additionally, new funding mechanisms, including peer-to-peer lending and crowdfunding are being explored. Government is also aligning the MSMEs policy with national and regional strategies such as the African Continental Free Trade Area (AfCFTA) and the Sustainable Development Goals (SDGs). This alignment will create opportunities for Eswatini’s small businesses to access regional markets and compete on a larger scale. Furthermore, efforts to encourage entrepreneurship among youth, women and people with disabilities have been integrated into the policy.  

The Cabinet further approved several trade and investment agreements, including Memorandum of Understanding (MoU) with Uganda, Serbia and the United Arab Emirates (UAE).
These agreements are expected to facilitate cross-border trade and attract foreign direct investment (FDI). Eswatini recently signed the agreement with the UAE.
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 by Minister 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.
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 Cabinet reviewed Eswatini’s AGOA eligibility status for 2024. AGOA allows duty-free exports to the US, which is vital for textile and agricultural businesses.

digital

The Cabinet further approved the Eswatini Government Digitalisation strategy, including an MoU between the ICT Ministry and Google. This will enhance digital infrastructure and online business opportunities.
Through this agreement, e-commerce businesses will benefit from improved internet access. Government services will be digitised, reducing bureaucratic inefficiencies.
The tech sector will attract new investments, creating opportunities for local start-ups.
Furthermore, government transferred factory shells to Eswatini Investment Promotion Authority (EIPA) to promote industrialisation.
The direct impact of this is that manufacturing businesses will have easier access to ready-made industrial spaces.
The move could attract investors looking for low-cost production facilities.
Job creation in industrial areas will likely increase.

The policies approved by the Eswatini Cabinet in 2024/25 present both opportunities and challenges for businesses. While government is making significant efforts to attract investment, support MSMEs and enhance digital transformation, successful implementation will be key. The business community must stay informed and engaged to capitalise on these new policies.
As Eswatini moves towards economic diversification, businesses must adapt to remain competitive in an evolving market.

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