Lonely Planet recently rated Eswatini as one of the Top 5 destinations in the world to visit in 2020. The organization noted the Kingdom’s unique cultural heritage, which remains untouched by modernity. More than that, Eswatini presents limitless opportunities for investors looking for a consistent economy with access to surrounding markets in the Southern Africa region. In this exclusive interview with African Leadership Magazine UK, the Honourable Minister of Commerce, Industry and Trade, Senator Manqoba Khumalo, shares Government’s efforts towards creating a conducive investment climate for ready investors. Excerpts.
The mainstay of the Eswatini economy has been sugar exports. Recognizing the risks of running a largely monolithic economy, are there plans to diversify? If yes, in what sectors do you believe Eswatini has a comparative advantage, or can easily create one?
Our Strategic Roadmap speaks to five sectors that we have identified to address the same concern that you have just mentioned. We have looked at mining and energy as a sector, under the Ministry of Natural Resources and Energy. We have a number of mineral resources that are not currently being exploited for a number of reasons. We are trying to fix some of their underlying issues to be able to beneficiate mines and some of those minerals. Secondly, is tourism. This is a beautiful country, and I think it is an untold story and a beautiful culture with peace and stability and we believe we can sell that. I am quite excited that there is an organization called Lonely Planet that has rated Eswatini as one of the top five destinations to visit in the world in 2020 and it has really given us a lot of mileage even internationally. This has been covered in media like CNN. Thirdly is the area of manufacturing and agricultural processing. This one is extremely important because again to create jobs you need industry and industry sort of mops up a lot of jobs in a short space of time; so we are looking at especially economic zones. We have actually established a couple of Special Economic Zones, and we are in the process of developing the infrastructure around the second one. The first one is already fully developed, and we are starting to see foreign companies coming into those Special Economic Zones. We are also building factory shells and encouraging companies to come in; we are looking at our tax code to make sure it will be one of the most competitive in the region and other issues. But we really want to focus on agricultural processing, that is to say, whatever we are producing, how do we do second level beneficiation for those agricultural products with the view of exporting internationally. We have a great company called Rhodes Foods, and they are already exporting to the likes of TESCO and other international Britain chains, and we want to replicate that as well. Agriculture is huge because we have good agricultural land and good rainfall. Versus most countries in the region, our rainfall is a little bit better; I am not sure why, but we thank God for that. We still import a lot of what we eat from South Africa, so we want to scale up. We already have a number of key projects that we have identified. For example, in maize, we want to be self-sufficient in the next three years. That is how aggressive we are, and this applies to a host of other crops that we believe should be exported. The last sector is ICT; we want to digitize the economy because we see a business opportunity. We have been fortunate as a country to be one of those that will host the digital platform to operationalize the AfCFTA. The way it will be done is that there will be an e-commerce platform through a group that has signed an MoU with the African Union called the AeTrade Group and Eswatini will be one of the regional hubs for AeTrade. That makes us really happy because we understand that it is a knowledge-based economy, not a traditional economy that is going to drive the economy forward. So, we look at ICT as a competitive advantage for us. Whether you want to do finance, Eswatini has set up an international finance centre or want to do e-commerce. We are already talking to big companies looking to have some of their data in the region and have picked Eswatini as a point of interest. We are developing a data centre right now in our Technology Park, housed inside one of our Special Economic Zones. We are trying to diversify the economy from sugar by focusing on those five key sectors; Mining and Energy, Tourism, Manufacturing and Agro-processing, Agriculture and ICT.
As Interim Minister of Information Communications and Technology, do you anticipate that upskilling youths with digital skills can be a step towards positioning Eswatini as a regional outsourcing hub for global tech companies?
There is definitely planning in place that is still at the infancy stage because one of the disadvantages we have found as a new government administration is that our infrastructure is still lagging behind. We are working on fixing our backbone infrastructure so that we can have the best-in-class infrastructure. And on top of that, we will look at penetration. When His Majesty was opening Parliament, we call that the Speech from the Throne, one of the things he said was that he wants us to provide free Wi-Fi access to remote areas, particularly for our youth. He has commissioned me the mandate, and I am already working on a plan to make that happen. We are then looking at PPPs to actually make that happen because many private sector entities have a huge interest in occupying that space, working with the Government, and making sure that maybe we can then get the infrastructure, software, and investments we want. We believe strongly that ICT education is key, so we are also introducing ICT-based education in our schools. We just launched a programme where we now have 28 schools already on that programme. We are working on getting all schools in the country in three years to have an ICT-based education framework that will ensure that by the time kids get out of school, they have the requisite skills for the future economy. Our Royal Science and Technology Park has the whole curriculum on ICT skills, digital skills, and digital innovation skills. We have got clusters of children that are being trained on each of these skills. We are focusing quite a bit on technical and vocational institutions because what happens is that kids come out of high school and want to go to one of the traditional university structures. We want to get more vocational education with a very strong emphasis on ICT education because jobs of the future include robotics, software engineering, etc. We cannot be churning out graduates that are untrained in that.
The bulk of Eswatini’s trade has predominantly been with the Southern African region. What efforts are you making as Minister of Commerce, Industry and Trade to acquire strategic development partners outside your regional bloc?
We have many trade agreements that we have entered into as a country, but the problem is that these are really muted at this particular point in time other than the regional one. So, my challenge and our challenge as a government is how to utilize these trade agreements. There are some specific actions that we are embarking on. We have AGOA; the Africa Growth Opportunity Act, and right now, we are using that primarily for textile. The textile industry employs about 35,000 people in Eswatini, but we have looked at how we can be the preferred manufacturers for textile in the region. People say it is not a high paying job, but when you look at the economic impact of textile mopping up youth and employment, it is something that makes sense to do. In fact, the latest statistics show that Eswatini is the second importer of textile into South Africa after China, which is pretty significant. But I have been asking myself why we cannot be the first because we have started the landscape and we understand that the rest of the countries who have been supplying to South Africa actually get textiles from China. South Africa is now saying we need things that are actually made in those countries, and Eswatini is becoming more preferred. There is a company that is going to be set up here, and it will create 3,000 jobs next year. I visited another one in the south of the country earlier this year, and it will be creating 6,000 jobs. So that is the value of textile, but AGOA will allow us to expand into the American market because we can trade their duty-free once we are able to distinguish ourselves as the preferred supplier of textiles in the region, which is one of our key strategies. We have also entered an agreement with the local American embassy to get the services of something called the Trade House in South Africa. It is an American entity based in South Africa helping private businesses that are supplying to the US on an AGOA optimization strategy so they will be here in March. We will then do a baseline survey and a sort of opportunity assessment and then put together an action plan to optimize it.
You have been at the forefront of enhancing trade between Eswatini and Taiwan which have led to meeting with officials from the Taiwan Economic Trade Development Council (TAITRA) as well as the Chairperson of the Taiwan Sugar Corporation. What has been the outcome so far? Are there positive updates?
We have an agreement that we call ECA, Economic Cooperation Agreement, with Taiwan. The country has chosen Taiwan as its strategic partner; it’s a historical thing. His Majesty King Sobhuza II started our relationship with Taiwan – the King’s father said that our friends are Taiwanese and the current King His Majesty King Mswati III has maintained and strengthened our relationship with Taiwan. It is a very great relationship and I think it is mutually beneficial. We have also identified about 151 product lines that we can trade with each other. I was in Taiwan in June 2019 and we have formulated a cross-functional team that is going meet annually to look at our priorities.
Right now we have prioritized honey. We supply honey and beef to Taiwan. They love our beef. They have visited our beef industry and have looked at our health certificates approval and they have given us the go-ahead and we have begun to supply. Also, there are private businesses that have off-take agreements to supply beef into Taiwan. And they are also looking at sugar. We also have an agreement with a Latin American company called MERCUSSOR. It is a circle agreement which we are part of and we are looking to see how we can supply to the likes of Brazil, Argentina, and so on. There is nothing happening with that at the moment, but I have a team now, actually, the director of trade and I are now looking at how we can start supplying to those markets and how we can diversify from sugar in particular. But it is really about having a concerted effort at specific markets and saying, you know, what makes sense to supply to this particular country so that we are diversified as an economy.
I love the Ae-Trade concept because it is a concept that is yet to be proven, is that it is really grassroots centric. In other words, if you are a handcrafter, for example, and you are doing lovely crafts, how do you find markets for your product? And they have made a commitment, by the way, they have said that they will create through their SME program, 2000 jobs in Eswatini. They would do that by first connecting SMEs to markets because that is a problem in Africa. You know better than I do that Intra-Africa trade is said to be about 15%, which is quite shameful. But on the flip side of that, it is amazing because it speaks to the size of the economy, which is why the AfCTA makes sense. So the way Ae-Trade is going to connect SMEs is to identify the SMEs that are sort of export-ready, so to speak, and secondly training and educating them on how to make sure that they provide a sustained level of exports. Because another thing with SMEs, using the example I gave about exporting honey to Taiwan, you get an SME, you place an order saying give us a hundred tons in a year, but this SME can only supply four tons in a year. So Ae-Trade Group is going to then help in capacitating orders. They have a financial model that will also help finance them scale up where they need to scale up quickly. And then they have the mentoring model as well, where they will make sure they partner with SMEs even if it is remotely with someone who has gone to the coast and can help them through their paces. But most importantly, they would remove the non-tariff barriers too, because the biggest problem to trade across Africa is the barriers to trade are just enormous. I was once exposed to that situation working for my previous employer, we were to take goods from Eswatini to Nigeria and we had to fill out 72 pieces of documentation. With digital information, everything is linked to one source of entry, and you know the rates, you know the duty, you know who is going to pay you and how. Because another thing is some of these SMEs are quite shy to export what they have. And then once the person receives the goods, you go to the website and the website does not exist anymore. So Ae-Trade really eliminates all of these artificial barriers to trade that we see.
However, the most important thing for me is the youth and women. I have spoken to the Ae-Trade director, and he has said he is going to have a bias towards youth and women. Once we focus on youth and women, we are very comfortable that the economy is going to change quite drastically, particularly women as they tend to create a better impact on the economy and society.
Increased access to affordable Internet has been shown to have positive impacts on economic, education, health, and development outcomes. Is there one area that you believe Internet access has the greatest potential to improve? How has Eswatini fared in the areas of communication, information and technology over the years?
We are making fair progress. Currently, some people say that our internet speed is a bit on the slow side and that is a bit costly, but that has been rectified as we recently had data prices reduced by up to 70% our mobile companies. I count myself a bit fortunate that I will have a fair level of its influence in terms of shaping how this goes in the next few months. We just feel strongly that the telecommunications industry needs to be liberalized and that way you know you will be paying the value for money. We are working towards fast-tracking the unbundling strategy so that the players can be separated and play competitively in the mobile space.
They will have an infrastructure company but that will eliminate the exclusivity on infrastructure. So we will open up infrastructure so that the companies can come in and compete. For example, if Orange wants to come in and give us an infrastructure solution or MTN wants to give us a telecommunication solution, both can be considered. And of course, we also have a postal service which should help to decentralize our services. We want people to not have to walk or rather travel more than 20 kilometres to get a service. Right now we need to digitize our postal service. We believe that is going to achieve a few things;
It is going to allow free-market economies.
It is going to give us the penetration that we need.
It is going to drive down the cost.
Then Eswatini will be a much better place to do business for both SMEs and private sector because we would have those fundamentals in place. We need to do that in the next two years, although it is a very aggressive timeline I think we will get it done because we have the will.
Is there a strategy for attracting African Americans to return and settle in Eswatini similar to Ghana’s year of the return?
I have to be honest; we do not have such a strategy yet. But I think it will be great to get to understand how the likes of Ghana have achieved that and we need to build that into our strategy. It is very clear that there is so much latent potential that we are not tapping into.
I think another thing is exposure, I come from the private sector as you know, and I have only started working for the Government. Having a broader view of things, we are a culture that is always open to ideas, and particularly new ideas. We believe strongly that it will be great for us to get such suggestions like the diaspora suggestions. We have set goals, and we will be opening a new Informal Traders Hub in Manzini. We have built this up with the help of COMESA; where handcrafters will come in and have a storage facility and be able to spend the night. It is a 300bed facility with showers. What we have to do is that whenever we have visitors, we will let it be intentionally part of the agenda.
Considering you spoke about exposure, what is your take on letting the information known across other continents like the Middle East and beyond, in terms of investment and in terms of profiling Eswatini on its own, putting it together on a platform and getting it across to educate them on what is happening?
The Minister of ICT has been working on a new branding strategy because we have reverted to our original name, Eswatini. We believe the tagline we will come up with will be all-encompassing whether it is talking about tourism or you talk about business or whatever.
How do you manage to combine the two strategic portfolios you handle, the ICT and Commerce Industry?
I am able to manage it. The substantive Minister for ICT is Her Royal Highness, Princess Sikhanyiso. She is indisposed for a while, and I am acting ICT Minister in the interim. I just find natural synergies to combine what the Ministry of Commerce and Ministry of ICT are doing. I will make a few examples, starting with our Revenue Services. For example, if you want to have a trading licence, you come to the Ministry of Commerce and apply, but, you have to go to the Revenue Service when you have to pay taxes. Once you have made your payments, you come back to finish the process; which is awful from an ease of doing business points of view. So now the Ministry of ICT is working with the Ministry of Commerce to ensure that you do everything you need to do in one place. That is an example. There are many synergies that I see. Businesses are complaining about the cost of the speed of the Internet and the accessibility, both small and huge and I feel I can fast track some of those actions, but the workload itself is quite enormous, and you rely on people. We are blessed with really talented people. So that makes it easy.