Malaysia’s Government Procurement Policy contains a ‘Bumiputera’ clause, which gives preference to ethnic Malays for State contracts.
The aim is to foster local entrepreneurship and reduce reliance on foreign suppliers.
Bumiputera (also spelled ‘Bumiputra’) is a Malay term literally meaning ‘son of the soil’ or ‘prince of the earth’.
In Malaysia, it refers to the indigenous Malay and other indigenous groups of the country who are granted special rights and privileges under the Constitution.
I declare “son of the soil” to Eswatini State contracts.
This is because within the intricate tapestry of Eswatini’s socio-economic development, few themes are as enduring and contentious as the drive for local empowerment. Say it again brother!
The discourse finds renewed urgency today, I want to say, as local companies persist, often against daunting systemic obstacles, in their quest for fair and meaningful participation in government projects.
Contrary to any mischaracterisation as insular or xenophobic, these companies express a pragmatic aspiration to compete both locally and internationally, and seek equitable access to opportunities for which they are undoubtedly qualified.
However, there remains an undercurrent of frustration, as many tender requirements in Eswatini appear deliberately complex, systematically excluding local firms that have otherwise demonstrated proven capability. This issue is not isolated nor is it new, but it remains a critical juncture for policymakers, especially Cabinet, which must decide whether to harness the full potential of indigenous expertise or to persist in what critics see as undue deference to foreign interests.
A stroll through the skylines of Mbabane and Manzini offers unequivocal testimony to the technical prowess of emaSwati.
Local firms have not only contributed to, but have often spearheaded major infrastructural projects. It is no exaggeration to state that many of the nation’s most iconic structures; be they administrative headquarters, modern hospitals, convention centres or sprawling commercial malls, bear the enduring imprint of Eswatini ingenuity.
The notable Mbabane-Manzini Highway stands as a monument to local enterprise.
Similarly, critical establishments such as the Eswatini Communications Commission headquarters, the Eswatini Revenue Service, the International Convention Centre (ICC) and Five-Star Hotel (FISH), the Ezulwini Private Hospital and the Hilton Hotel Inn in Mbabane all testify to the depth of local expertise.
The execution of these projects has, time and again, earned the admiration and confidence of international financiers, including the World Bank and the African Development Bank.
It is, therefore, all the more perplexing that local companies, of late, are encountering barriers to greater participation in government contracts.
We have giants in the construction industry. Eswatini has Inyatsi, AG Thomas, Stefanutti Stocks, Construction Associates, DuVan and several others.
There is every reason to believe that these companies could execute major undertakings par with their counterparts anywhere in the world, be it a motorway in the UK or a bridge in the United States.
Systemic exclusion
At the heart of local companies’ grievances lies the structure of government tenders. Procurement regulations, supporters claim, are required by foreign financiers who insist on certain standards as a precondition for funding. On the other hand, critics argue that these tenders are frequently drafted with an opacity and level of complexity that disproportionately disadvantages local players.
While the spirit of competition is, in theory, open and merit-based, in practice, Eswatini companies contend that the criteria often presuppose or even require foreign partnerships.
By default, value is ascribed to international firms, not always based on substantive underwriting of superior capacity, but due to regulatory and procedural frameworks that local entities find prohibitive to navigate.
This not only breeds resentment but also discourages the development of domestic capacity.
It is not for lack of legislation that this state of affairs persists. The very establishment of the Construction Industry Council (CIC), through an Act of Parliament, points squarely to government’s recognition, at least in principle, of the competence and maturity of local construction firms.
The CIC’s mandate is to supervise, regulate and promote the interests of the local construction industry, ensuring both quality and the broader participation of Eswatini nationals.
I have personally noted with concern and disappointment that there is a growing perception that government hides behind the procurement policies of foreign financiers, circumventing the spirit, if not the letter of the CIC Act.
This approach not only undermines the regulatory authority of the CIC, but erodes the trust of local entrepreneurs whose contributions are indispensable to nation-building.
It is clear that the ramifications of the current procurement paradigm are not merely administrative or procedural, but have direct and measurable economic consequences.
Chief among these is the depletion of the nation’s foreign reserves. When government contracts are routinely awarded to foreign firms, profits are expatriated, rather than reinvested in the local economy.
Foreign reserves, typically held in currencies such as the Dollar, Euro, or Pound Sterling, serve as the bedrock of economic stability.
They are vital for the importation of essential goods, the repayment of external debt and the buffering of currency shocks. Unchecked depletion of foreign reserves can lead to a cascade of detrimental effects, including currency devaluation, inflation and a loss of confidence in the country’s creditworthiness.
I must say that the empirical evidence from nations that have faced prolonged periods of dwindling reserves is sobering.
Let us consider Zimbabwe where acute foreign currency shortages have led to hyperinflation, extensive import controls and widespread economic hardship.
Sri Lanka, too, experienced a devastating crisis in 2022 when an unsustainable foreign debt load, coupled with falling reserves, resulted in the collapse of public services and acute shortages of fuel, medicine and food.
Against this backdrop, it is vitally important that I mention that the logic of awarding lucrative government tenders to foreign firms to the exclusion of capable local enterprises appears economically irrational, if not outright reckless.
Every Lilangeni paid abroad for services that could be provided domestically is a Lilangeni not invested in the education, healthcare or entrepreneurial capacity of the people of Eswatini.
Crucially, Eswatini is not alone in facing challenges and opportunities of local empowerment in public procurement.
A number of countries, keen to safeguard both economic sovereignty and social equity, have devised legislative frameworks that protect and indeed privilege local firms in government contracting.
Lessons from other countries
I mentioned sometime ago that South Africa is, perhaps, the most prominent regional example. The Preferential Procurement Policy Framework Act embeds local content requirements within State tenders and establishes a scoring matrix that actively advantages companies with significant local ownership or employment.
Similarly, the Broad-Based Black Economic Empowerment (BBBEE) framework incentivises contractors to partner with and transfer skills to historically marginalised South Africans.
Nigeria has implemented the Nigerian Oil and Gas Industry Content Development Act, mandating a minimum threshold for Nigerian ownership and employment in oil and gas contracts.
This environment helped to expand the companies owned by Africa’s richest entrepreneur, Aliko Dangote, the Chief Executive Officer of the Dangote Group.
Which law has created billionaires in Eswatini?
In Nigeria, any government or major private sector deal within the sector is required to have substantial local participation, with technology transfer and skills development as integral components.
Brazil, meanwhile, employs a ‘national preference’ system in government procurement, especially in strategic sectors.
In the case of infrastructure, health and energy, contracts are preferentially awarded to Brazilian companies, with additional provisions for technology transfer and local content.
The underlying rationale is not economic protectionism for its own sake, but a recognition that public expenditure must catalyse domestic development.
These legislative interventions often incorporate carve-outs for highly specialised projects where foreign expertise is demonstrably unavailable, but do not permit the blanket exclusion of competent local firms.
It is evidently time for Eswatini’s Cabinet to re-examine its priorities. The repeated underutilisation of local expertise does not simply undermine the country’s entrepreneurs, but it subverts the national interest.
If emaSwati, through sacrifice and skill, have reached the threshold where they can compete with international peers, then domestic policy ought to reflect this maturation.
This is not a call for unbridled protectionism or for the awarding of contracts solely on the basis of nationality. Rather, it is a plea for fair competition, of course one that honestly accounts for both the historical record and the economic imperatives of the day.
Specialist projects will, undeniably, sometimes require foreign partnerships, but these should be founded on meaningful skill stransfer and capacity building.
Government support remains indispensable.
Through pragmatic reforms, streamlined regulations and enforceable local content requirements, public sector spending can be leveraged to build capacity, create jobs and retain capital within the country.
A transparent, accountable procurement process, which is responsive both to the statutory mandates of entities such as the CIC and to the lessons of comparative international experience, is the surest route to prosperity.
As I conclude this article, it is imperative that I emphasise that Eswatini stands at a crossroads. The choice before the nation’s leaders is stark. It is either we continue to cede the fruits of public investment to foreign interests or we consciously cultivate the expertise and ambition evident among emaSwati.
The latter path is not just a moral or nationalist imperative, but an economic necessity, particularly in a period when global economic volatility and external shocks grow ever more frequent.
In the final reckoning, locally anchored prosperity is the only truly sustainable prosperity. If the stories of Mbabane’s skyline and Manzini’s roads have taught us anything, it is that, given opportunity and fair access, emaSwati will not merely participate in, but will shape the future of their homeland.
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