Swazi Observer

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ESWATINI CONTINUES TO BE AN INDUSTRIAL POWERHOUSE IN AFRICA!

By Hon. Manqoba Khumalo Minister of Commerce, Industry and Trade | 2025-01-22

The ministry of commerce, industry and trade recognises that the industrial sector is key in the acceleration of economic growth, innovation, job creation, poverty reduction and inclusivity while also fighting the scourge of climate change core of the ministry’s overall mandate.

Industry truly is an engine for economic growth as it directly has a positive impact on some of the key SDGs such as; the creation of decent jobs and income (SDG 8) and increasing resource and energy efficiency (SDG 6,7,11,12).

Moreover, industry has a strong multiplier effect as it has an indirect impact on the other SDGs as economic growth and job creation are primary drivers of achieving socio-economic goals such as poverty alleviation (SDG 1), the eradication of hunger (SDG 2), improvement of health and wellbeing (SDG 3) and the reduction of inequalities (SDG 5 and 10).

Industrial policy, which refers to the interventions that seek to change the structure of the domestic economy towards sectors that offer better prospects for economic growth, is key in the achievement of industrial development in countries. Eswatini has taken deliberate steps in an effort to industrialise through reviewing the National Industrial Policy (2023-2033) which was launched in February 2024.

Through this industrial policy, the ministry endeavours to fast-track industrial development to enhance Eswatini’s competitive industrial performance (CIP), generate decent employment, diversify the economy, build economic resilience as well as reduce poverty and inequality.

Eswatini has continued to rank high in industrialisation in the African continent as the manufacturing value added (MVA) has continued to contribute significantly to the total output/GDP of Eswatini.

The secondary sector which comprises of manufacturing, electricity supply, water, sewage and waste collection and construction, contributes about 33 per cent towards national GDP.

The primary sector (agriculture, forestry, and mining), contribute 7.8 per cent while the tertiary sector (includes wholesale and retail trade, transportation and storage, accommodation, information and communication, financial and insurance activities, real estate activities, public administration and professional services, education, human health and social work activities, arts, entertainment and recreation and other service activities. contributed about 51.3 per cent in 2023 as shown in the figure 1.

The secondary sector is largely dominated by manufacturing.
The share of manufacturing towards GDP has increased from about 25 per cent in 2020 to 28 per cent in 2023, an increase of around 3per cent. figure 2 shows the contribution of the manufacturing sector to the national GDP.

The manufacturing sector includes sub-sectors such as; food and beverages, chemical products, textile & apparel and wood and wood products and other manufactured products.

Even when ranked among other countries in the region and continent, the contribution of manufacturing towards GDP has continued to be significant for Eswatini, rendering the Eswatini economy among the top countries in the continent in the competitive industrial performance (CIP) index as shown in figure 3.

Eswatini has been ranked at the fifth and sixth position in the CIP Index between 2011 and 2021 in the African continent.

In addition to that, Eswatini has continued to be ranked among the top industrialised countries in the continent, which is attributable to the complexity of the exports basket coming out of the country. Eswatini manufacturing share in exports is relatively higher when compared to other countries in the region.

In 2022, the manufacturing share in exports was an impressive 89.8 per cent for Eswatini whereas other countries in the region had much lower figures; Malawi (24.3 per cent),

Mozambique (22.1 per cent), Namibia (69.3 per cent) and South Africa (55.1 per cent). The two exceptions were Botswana (93.3 per cent) and Lesotho (91.7 per cent).

Moreover, other indicators for industrial development such as the MVA per capita and the manufacturing share in national employment are significantly higher for Eswatini when compared to other countries in the continent, underscoring the significance of the manufacturing sector in the Eswatini economy.

The main contributors to the continuous growth performance of the manufacturing sector include the food and beverages sub-sector, the textiles and clothing, the chemicals and chemical products, and wood and wood products. These products represent about 90 per cent of the country’s manufacturing value added.

In recent years, Eswatini has welcomed renowned investments in the manufacturing sector, particularly in the food manufacturing sector which has also contributed to the growth of the sector and increased Eswatini exports.

Eswatini's recognition as a rising industrial powerhouse in Southern Africa reflects the government's steadfast commitment to fostering industrial growth and economic diversification;
g A strong and evidence-based policy framework- Industrial Policy (adopted in 2024) and the National Policy on Investment which will be launched this year will also help to improve the enabling environment for businesses and investments in Eswatini.

g The strategic and deliberate efforts in the provision of serviced industrial land in the major industrial Estates of the country has enabled the country to attract huge investments which are major contributors to the manufacturing output of the country; contributing significantly to the GDP and employment of Eswatini, particularly in the manufacturing sector which is an engine of economic growth.

With the continual of the factory shell programme and the development of the Sidvokodvo Industrial Estate, government believes that Eswatini’s industrial competitiveness will continue to improve, positioning Eswatini as a desirable destination for investment in the region and continent.

g The provision of tax and non-tax incentives for both domestic and foreign investors such as the development approval order (DAO) is one of the policy instruments used by Eswatini to attract investments into the country has also been instrumental in investment attraction and facilitation in the country, enabling the Eswatini manufacturing sector to be more competitive thus making significant contributions towards the economy.

g The participation of Eswatini in the various regional economic communities (RECs) such as SACU, SADC, COMESA, AfCFTA has enabled Eswatini to be a key player in regional integration and trade and has allowed the country to access various markets for its manufactured products, enabling the country to be more competitive and continue to intensify its industrialisation efforts to attain inclusive and sustainable industrial development.

Future prospects
g The growth prospects of Eswatini’s manufacturing sector has been further improved by the coming into force of the African Continental Free Trade Area (AfCFTA), which is expected to be a driving force for investment and trade, product and market diversification in the continent.

Businesses in the manufacturing sector are expected to take advantage of these market opportunities to ramp up their production, enhance competitiveness and productive capacities, and increase trade.

This will result in increased manufacturing output and further improve the country’s industrial development.

There are several other ongoing investment projects in the manufacturing sector, particularly in the textile and apparel sector (e.g. work wear factory) that are also expected to contribute to the growth of the manufacturing sector and create more employment for Emaswati.

g The good collaboration that exists between the government and the private sector provides important platform for improved growth of the manufacturing sector and a stable overall business environment.

g Government’s commitment to make policy changes such as the SEZ Policy, Investment Policy and Act, Citizens Economic Empowerment Act and Nkwe Government Programme of Action will play a significant role in improving the Eswatini business environment, improve competitiveness, attract more FDI, grow the manufacturing sector and ultimately grow the Eswatini economy and improve both the economic and social outcomes of Emaswati.

I expect that Eswatini will continue to be an industrial powerhouse in the continent, especially because our National Development Plan emphasises continued investment in industrial development, underpinned by our upcoming Investment Policy that cures the environment for doing business in Eswatini.

I’m also persuaded that the country needs to also focus on developing the primary sector urgently, so that we get to a stage where the contribution of the primary sector compares with that of the secondary sector. That is what will drive aggressive economic growth in the country and create jobs at a rate that is commensurate with the Nkwe Policy.

Industrialisation alone cannot drive the required rate of growth the country requires, but I’m certain that as a country we will remain within the top 10 most industrialised countries in Africa!

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