Swaziland is envied for her strategic location in Southern Africa. The country is able to reach regional markets hassle-free, and on top of that boasts one of the best infrastructures in Africa and has been characterized by enormous progress emanating largely from foreign direct investment in Mining, Agribusiness, Tourism, Manufacturing Industries, etc.
Swaziland’s economy is fairly diversified, with agriculture, forestry and mining accounting for about 8.2% of GDP, manufacturing (textiles and sugar-related processing) representing 42% of GDP. The Title Deed Land, where the bulk of high value crops are grown (sugar, forestry, and citrus) is characterized by high levels of investment and irrigation, and high productivity.
Promoting Investment in Swaziland
The Swaziland Investment Promotion Authority (SIPA) was established through an Act of Parliament, the Swaziland Investment Promotion Act 1998 and was formally launched in April of the same year. SIPA is a Category of a Public Enterprise and is wholly funded by the Government of Swaziland, with initial assistance from the European Union. SIPA’s Mission is to:
“Promote and facilitate foreign direct and local investment in Swaziland, with the objective of creating the wealth necessary to enhance the Social and Economic Development of the Kingdom and its people.”
The SIPA objectives are:
- To attract, encourage, facilitate and promote local and foreign investment in Swaziland.
- To initiate, coordinate and facilitate the implementation of government policies and strategies on investment.
- To provide a one-stop information and support facility to local and foreign investors.
- To advise the Minister on investment policies, strategies, proposals and suitable incentives for investors.
Swaziland Investment Promotion Authority
SIPA’s strategies and activities have focused on working towards the attainment of its broad objectives, and have focused on: Foreign Direct Investment (FDI): In order to promote the creation of employment opportunities, SIPA promotes Swaziland as an “Investment Location of Choice” to Investment Markets abroad such as Europe, United States of America, Turkey, Taiwan, Malaysia, Gulf Region, India, Brazil, Mauritius, Japan, Korea, Thailand, the Republic of South Africa, and the United Kingdom, amongst many other target locations. In this process, investment opportunities in Swaziland are presented to companies in seminars in groups or to individual companies on “one-on one” basis based on direct targeting of companies.
Investor Facilitation and Aftercare Services: The Investor facilitation service has the objective of providing a one-stop service facility for investment information and support to local and foreign direct investors who decide to establish business in Swaziland. Information provided covers basic cost factors, availability and costs of utilities labour and transport costs. In addition, information is provided on business registration and licensing, work and residence permits, factory shells and available factory sites. This department also reviews government policies, regulations and legislation and makes recommendations for reforms to the relevant Ministry.
Within the Investor Aftercare Programme, the Department visits and assists established businesses on difficulties they may be experiencing so as to try and retain such investors in the country.
Domestic Investments: This department has the responsibility of developing local entrepreneurs and encouraging them into participating in investment projects, particularly the primary business sectors as opposed to the retail sector. It also assists local entrepreneurs with their plans for expansions, and forming linkages with foreign direct investors either in joint-ventures or in sub-supply functions. The department conducts business seminars across the country in an effort to raise awareness and help business groups organise themselves.
Research and Policy Analysis: This is a new department set up to provide information that influences policy and formulates strategy for SIPA and Government to grow investment in Swaziland. Beyond conducting business and sector risk analysis, the unit also monitors and interprets macro and micro economic including social environment and political environment in order to keep SIPA relevant to investors and Swaziland.
Investment Opportunities in Various Sectors
- Electronic Components Manufacture & Assembly
- Automobile Spare Parts Manufacture
- Processing of hides and skins (Leather goods and footwear)
- Furniture and other timber related Manufacturing
- Fruit, Vegetable Preservation and Bottling
- Bottling (preservation) of pickles and chutneys
- Bottling of jams and jellies
- Processing of beans and other legumes
- Dairy products (e.g. Yoghurts, custards) and ice bottling of spring water and flavoured spring water
- Juice squeezing (fresh juice from oranges. grapefruits, guavas etc) for sale to restaurants and public
The Swaziland Tourism Authority is a parastatal that was formed under the Tourism Authority Act with the objective of stimulating and expanding the industry through various programs. The STA has made significant contributions to the development of tourism in the country. Among its other activities, the STA conducts market research to plan and create awareness of tourism nationally.
Investment Opportunities in Tourism Sector
- Development of a state of the art government owned ICC
- Development of a Golf Estate, Casino and supporting Facilities
- A holiday housing estate to cater for holiday makers mostly foreign
Textile and garment production plays a significant role in Swaziland’s manufacturing sector. In the last several years, the textile and garment industry has grown to offer a wide range of services, including spinning, weaving, knitting, dyeing, and finishing. Introducing such labour-intensive processes locally has increased employment opportunities; currently, the industry provides jobs for over 15,000 Swazis. Swaziland’s textile and garment manufacturers are primarily located in the Matsapha Industrial Estate. Swaziland’s offering of comprehensive product lines in one location is attractive to buyers, as it allows them to meet their broad purchasing needs in one place. As a result, Swaziland provides textiles and garments to some of the largest retailers in the United States, Europe, and South Africa.
The Swazi textiles industry took off in 2001 after Swaziland signed the African Growth and Opportunity Act (AGOA) with the US in 2000. Guaranteed export markets encouraged investors to enter the country and boosted employment. As a result, garment exports to the US tripled in the three years following Swaziland’s membership with AGOA. Now that the industry has been established, opportunities to capitalize on current infrastructure and relevant trade policy make setting up new businesses in the industry simpler.
Though the textile and garment sector is export-oriented, the industry is vertically integrated and includes cotton farming and the production of cotton lint. The Swaziland Cotton Board is mandated to promote the development of the cotton industry by, among other things, regulating the procurement of planting seed by farmers to ensure a marketable final product.
The Board’s activities include initiatives to increase overall cotton production, provide resources to market cotton, and develop small-scale spinning industries. The Board was also instrumental in the acquisition of the country’s first locally owned cotton ginnery. Finally, the Board is working closely with relevant stakeholders to introduce genetically engineered cotton seed in order to explore the potential of growing genetically modified cotton in an effort to increase yields and reduce production costs.
The footwear manufacturing industry is confined mostly to traditional footwear that is used in a number of cultural activities. A number of smaller, basic operations focused on sandals and other basic shoes operate in a number of communities providing customer specific designs.
These are mostly informal operators scattered around the country. The country has in the past played host to a sneaker manufacturing company, which stopped operating in the early 90’s. Commercial footwear manufactures are non-existent in the country as there are no manufacturing entities in this category. This industry has a huge potential as Swaziland has preferential agreements with the US, EU and the region (Africa).
Availability of Raw Materials
Cotton: The revitalized cotton industry has potential to become increasingly export oriented and also supply the domestic market. Cotton fibres and yarn can also be imported from the SADC region to supplement production if necessary. Leather: Swaziland has raw materials like cow skin hides as the country has about 639,718 cattle, commercial slaughters about 42,743 cattle in the year 2007/08.Game leather can also be sourced locally.
Textile and Apparel: Several leading international companies are into textile manufacturing and can provide raw material for value addition. Wool and Mohair: Neighbouring South Africa is the world’s largest mohair producer and the fifth largest producer of wool. Competitively Priced Cost of Labour: Despite that the infrastructure in Swaziland is nearly world class, costs are comparable to those of developing countries.