Financial Data
Updated 29 May 2017


Swaziland

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Business opportunities and risks

Opportunities for you to do business in Swaziland

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There are many opportunities that could make investment in Swaziland a viable option. The following are potential opportunities and benefits that could come from the improving business environment in the country, luring investors to operate in the country:

  • The government of Swaziland has prioritised the energy sector, in particular the renewable energy sector, and has crafted policies to attract private investment. The Swaziland Energy Regulatory Authority regulates the sector, screening investors interested in establishing power generation facilities.
  • The government has been taking steps to liberalise the information, communications and technology (ICT) sector. Initiatives to spur the growth of this key sector include e-governance and the construction of the Royal Science and Technology Park. The digital migration programme of the Southern African Development Community (SADC) presents ICT opportunities in the country.
  • Financial incentives for all investors also include tax allowances and deductions for new businesses. These include a ten-year exemption from withholding tax on dividends and a low corporate tax of 10% for approved investment projects. Companies that plan to make significant corporate social responsibility investments can apply to the Swazi Minister of Finance to be charged a reduced tax rate up to 10%. This break is available under the Development Approval Order, which is part of the income tax law.
  • The country’s road network, spanning 1500km in main roads and 2300km in district roads (of which a total of 30% are tarred), is well maintained and connects the main towns of Mbabane and Manzini with South Africa and Mozambique. A major trade route is the Maputo Development Corridor (MDC) to the north of Swaziland, which stretches between Johannesburg in the west and Maputo in the east. Together with access to Durban ports, the MDC also offers the Matsapha dry port access to the ocean. Matsapha dry port services the country’s largest industrial estate.
  • In an effort to boost growth in the lucrative conferences sector, the Swazi government is also supporting development of an international hotel and convention centre. However, the investment is likely to be underutilised, due to big South African cities already having largely cornered this market. In 2015, Hilton Worldwide signed an agreement with the Swaziland Public Service Pensions Fund (SPSPF) to open a Hilton Garden Inn hotel in Mbabane. The hotel is expected to open its doors in 2017.
Business opportunities
  • The government has been taking steps to liberalise the information, communications and technology (ICT) sector. Initiatives to spur the growth of this key sector include e-governance and the construction of the Royal Science and Technology Park.
  • Various incentives to invest in Swaziland are in place, by law. These include:
    A human resource training rebate;
    A reduced tax rate of 10% for the first ten years of operation for businesses that qualify under the Development Approval Order;
    The exemption from import duties of capital goods such as machinery and equipment, imported into Swaziland for productive investment;
    The repatriation of profits and dividends, including salaries for expatriate staff and capital repayments; and
    An exemption from import duties on imported raw materials for the manufacture of goods to be exported outside the Southern African Customs Union (SACU).
Operational risks to consider

While there are several opportunities worth tapping into in Swaziland, the country is not without its challenges, and smart investors and businesses should carefully consider and plan for these encounters before establishing a presence in the country.

Operational challenges include:

  • Swaziland has an underdeveloped, unreliable, and unpredictable legal and regulatory environment. It does not have an approved trade, investment, or industrial policy. This absence of governance fosters a deficiency in transparency and accountability, which encourages corruption and undermines the rule of law.
  • The government’s official policy is to encourage foreign investment so as to drive economic growth. However, the pace of reforming the country’s investment policies is slow, and it has not kept up with other countries in the region.
  • Foreign investors could be confused by the country’s dual system of governance. Approval is often required by traditional authorities as well as the various government ministries.
  • Public sector and royal family involvement in the economy discourages private investment and encourages monopolistic behaviour. This is driving up prices and reducing the competitiveness of the country. The country’s electricity supply is unreliable and it is dependent on South Africa and Mozambique for its energy. Early in December 2015, the Swaziland Electricity Company warned that power outages would increase due to growing industrial demand and its limited energy generating capacity.
  • There are no laws that discriminate against foreign investors. However, if you want to be successful, foreign investors require local partners to navigate the complex bureaucracy of the country. These local partners are often the government or the royal family.
  • The country has a land tenure system where the majority of usable land remains the property of the King ‘in trust for the Swazi nation’. This can be confusing for foreign investors and can discourage long-term investment in mining, commercial real estate and agriculture, in particular. If foreign investors need large portions of land for business, they must negotiate directly with the monarchy for a lease.
  • Swaziland’s poor human rights and labour rights record has jeopardised its access to export markets and to donor support.
Business challenges
  • Swaziland has an underdeveloped, unreliable, and unpredictable legal and regulatory environment. It does not have an approved trade, investment, or industrial policy.
  • The government’s official policy is to encourage foreign investment so as to drive economic growth. However, the pace of reforming the country's investment policies is slow, and it has not kept up with other countries in the region.
  • Foreign investors could be confused by the country’s dual system of governance. Approval is often required by traditional authorities as well as the various government ministries.
  • Public sector and royal family involvement in the economy discourages private investment and encourages monopolistic behaviour. This is driving up prices and reducing the competitiveness of the country.
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