Times Of Swaziland: MADE IN THE KINGDOM OF ESWATINI II

MADE IN THE KINGDOM OF ESWATINI II
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Sabelo Gabs Nxumalo on 13/02/2024 09:36:00


The time has come for young emaSwati entrepreneurs to seize opportunities to
manufacture basic every day consumer products for export to the US under the
African Growth and Opportunity Act (AGOA).
The main drive is to get emaSwati to manufacture products locally, sell locally,
regionally and internationally using the various initiatives made available by
government.
Youth Chamber of Commerce, Industries, AGOA
Eswatini’s economy is at a crossroads. While the country boasts a strong
manufacturing sector, diversification and export growth are crucial for
sustainable development. AGOA presents a unique opportunity for Eswatini’s
small and medium-sized enterprises (SMEs) to tap into the vast US market for
manufactured goods. I have asked Allan-Lloyd Junior Hamusokwe, Head Researcher
at the Youth Chamber of Commerce and Industries (YCCIE) - Eswatini, to delve
into the potential of AGOA for Eswatini’s SMEs, introduce the YCCIE 2024 SME
Start-Up Tool Kit, and emphasise the importance of value chain development for
risk reduction, profit maximisation and sustainable success. This article has
been presented by him to try and give us as much information as possible on this
topic.
Manufactured goods landscape
Eswatini’s manufacturing sector significantly contributes to the economy,
accounting for around 30 per cent of GDP and employing over 20 per cent of the
workforce. The sector is dominated by textiles and apparel, with exports
exceeding US$1 billion annually. However, diversification is essential for
long-term growth.
Current exports and AGOA’s potential
Eswatini’s current manufactured goods exports to the US under AGOA primarily
comprise:
* Textiles and apparel: Cotton yarn, fabric and finished garments benefit from
duty-free access under AGOA.
* Wood and wood products: Furniture, doors and processed wood products offer
export potential.
* Agro-processed products: Canned fruits, jams and beverages present
opportunities for value-added exports.
AGOA opens doors for further diversification:
* Metal products: The National Development Plan (NDP) envisions expansion beyond
mining, with potential for steel fabrication, wire products and light
engineering.
* Electronics and light assembly: Government seeks to attract foreign direct
investment in electronics manufacturing, creating opportunities for SMEs in
light assembly.
* Plastics: Existing plastic injection molding and extrusion plants can expand
production for export.
* Advanced textiles: Technical textiles and non-woven fabrics hold promise, as
highlighted in the NDP.
Manufactured goods exports statistics
The International Trade Centre (ITC) reports that Eswatini’s exports of
manufactured goods to the US under AGOA reached US$137 million in 2021, with
textiles and apparel accounted for the majority. However, the growth potential
is significant. The AGOA market for apparel alone is estimated at US$19.6
billion, with opportunities in other sectors like furniture, plastics and
machinery. The country can effectively use light manufacturing to create jobs
for the youth, earn foreign currency and create wealth for many young emaSwati
who will choose to start these businesses.
Empowering entrepreneurs
Recognising the challenges aspiring SMEs face, the YCCIE has developed the 2024
SME Start-Up Tool Kit. This comprehensive guide provides:
* Market research and feasibility analysis tools to identify viable
opportunities in the US market under AGOA.
* Information on AGOA eligibility requirements and compliance procedures to
navigate the trade agreement effectively.
* Guidance on value chain development to build strategic partnerships and reduce
risks.
* Financial planning and resource mobilisation strategies to secure funding for
business ventures.
* Mentorship and networking opportunities to connect with experienced
entrepreneurs and industry experts.
Importance of value chain development for SMEs
Understanding and integrating into value chains is crucial for SME success in
the export market. Value chain development involves:
* Identifying your niche within the manufacturing process (eg supplying raw
materials, processing intermediate goods or assembling final products).
* Building strong relationships with other actors in the chain (eg suppliers,
distributors and customers).
* Investing in quality control and certification to meet US standards.
* Continuously innovating and adapting to market trends and customer demands.
By adopting a value chain approach, SMEs can:
* Reduce risks by mitigating dependence on single buyers or suppliers.
* Increase profits by capturing a larger share of the value added in the
production process.
* Improve efficiency through collaboration and knowledge sharing.
* Enhance sustainability by adopting responsible sourcing and production
practices.
Conclusion
Eswatini’s SMEs have the potential to be major players in the export of
manufactured goods to the US under AGOA. By leveraging the YCCIE 2024 SME
Start-Up Tool Kit, understanding the importance of value chain development and
capitalising on the opportunities presented by AGOA, Eswatini’s SMEs can
contribute significantly to economic growth, job creation and sustainable
development. The focus has been on AGOA for this article because it is an
opportunity that emaSwati are not taking full advantage of. The reason might
have been that they simply do not know much about the initiative, or they know
but do not know how it can be accessed. The general feeling has been that AGOA
is for big businesses and that access is very difficult. We need to have more
information on how an ordinary liSwati can manufacture for international markets
such as AGOA because the aim was to help ordinary Africans. Comment
septembereswatini@gmail.com