TEXTILE INDUSTRY FEARS ‘DOOM’ ELECTRICITY PRICE INCREASE

MANZINI – Employers in the textile and apparel sector have described the recent 14.67 per cent electricity tariff hike as potential doom for the industry. Representing businesses employing around 22 000 emaSwati, they warned that the increase could force closures and trigger mass job losses. Industry representatives explained that the hike will significantly increase already high operational costs.  Current average monthly electricity bills of around E120 000 are projected to rise by approximately E17 604, reaching at least E137 604 per month.  They also pointed out that the recently approved 12 per cent water tariff increase, being implemented over three years, further exacerbates their financial burden.

The timing of the electricity tariff hike, announced by the Eswatini Energy Regulatory Authority (ESERA), coincides with the industry’s low season. Many factories implement layoffs due to reduced orders, and employers fear this latest increase will prevent some from reopening. “With this tariff hike, it will be difficult for some of the factories to come back to business after the low season. Even those which manage to continue will have difficulties surviving,” they said.

Wage

Adding to their woes, the employers anticipate challenging wage negotiations with worker representatives and government. They expect unions to leverage the rising electricity and water tariffs to demand substantial pay increases, impacting both businesses and individual workers. The knock-on effects of the potential textile sector decline are significant.  The industry contributes approximately 7.6 per cent to Eswatini’s gross domestic product (GDP), and its struggles will impact related sectors like public transport. With over half of the 22 000 textile workers relying on public transport, closures would drastically reduce passenger numbers. 

Landlords, particularly those renting to workers at Matsapha Industrial Site, Nhlangano and Siteki, would also be affected. Local vendors and fast-moving consumer goods (FMCG) businesses in these areas, who rely on textile workers as a major customer base, also face hardship. Industry leaders stress the importance of the textile sector to the country’s economy and social fabric, highlighting its employment of diverse individuals, regardless of education, age or skill level.  They are calling for a ‘textile indaba’ to discuss the tariff hike and other pressing issues facing the industry, aiming to protect the existing 22 000 jobs and potentially create more.

Businesses

Business Eswatini Management acknowledged ESERA’s ruling on electricity tariffs for 2025/26 and 2026/27, noting a largely uniform increase with a slightly higher 5.02 per cent rise in the monthly fixed charge for businesses. The organisation is reviewing the ruling and will issue a statement in due course.The textile sector’s fragility was highlighted by the late 2024 closure of TQM Textiles Swaziland, which directly resulted in 342 redundancies.  The company, a key fabric supplier and a major player in the Tex Ray Group Eswatini, blamed rising water and electricity tariffs for its demise.This situation echoes concerns raised in Nigeria, where the Organised Private Sector (OPSN) warned in 2024 that electricity tariff hikes could force over 65 per cent of businesses to close, prompting calls for government intervention.

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