Mbabane- Micro, Small and Medium Enterprises (MSMEs) in Eswatini are facing mounting pressure from rising fuel, electricity and transport costs, with industry leaders warning that many businesses may not survive unless urgent measures are taken.
Chief Executive Officer of the Federation of Eswatini Business Community (FESBC), Benjamin Simelane, speaking during an interview with the host of Eswatini Tv Market View host Sifiso Dlamini says the impact of escalating costs is already being felt across the sector, particularly among smaller businesses that lack financial reserves.
“The impact is significant, especially to MSMEs. Unlike large businesses that may have reserves to cushion them during difficult times, MSMEs operate largely hand-to-mouth. Once they are hit by cost increases, it becomes a question of survival,” he said.
Eswatini is home to an estimated 68,000 to 70,000 MSMEs, employing over 90,000 people and contributing roughly 50 percent to the country’s Gross Domestic Product (GDP). However, this critical sector is now under strain from both rising operational costs and weakening consumer demand.
Simelane noted that increasing fuel and energy prices are driving up production costs, making it difficult for many businesses to break even. At the same time, reduced consumer spending is compounding the problem.
“When consumers have less disposable income, they prioritise essential purchases. This affects MSMEs directly because their products may not move, which in turn disrupts cash flow and business operations,” he explained.
He warned that the current environment could lead to business closures and downsizing, with some operators potentially shifting into the informal sector to stay afloat.
Adding to the challenge, MSMEs are finding it difficult to pass increased costs onto consumers, as the market is already under financial strain.
“There is a limit to how much you can increase prices. Businesses are at the mercy of consumers, and this means profit margins are being squeezed to unsustainable levels,” Simelane said.
Sectors such as transport and agribusiness are among the hardest hit. The transport industry is heavily reliant on fuel, while agriculture faces rising input costs, including fertilisers, which could lead to reduced yields and broader food security concerns.
“If agricultural production drops due to high input costs, the effects will be far-reaching – from food shortages to job losses, especially in a country where many depend on agribusiness,” he added.
Despite the challenges, Simelane urged MSMEs to adopt practical strategies to navigate the crisis. These include improving operational efficiencies, focusing on controllable costs, and embracing digital solutions to enhance productivity.
He also encouraged small businesses to form cooperatives and buy inputs in bulk as a way to reduce costs and improve sustainability.
“Working together allows MSMEs to leverage economies of scale. Bulk purchasing can help stabilise input costs and ensure continuity in production,” he said.
Simelane further highlighted the importance of adopting technology, particularly in sectors like agriculture, where digital tools can help monitor production, identify inefficiencies and anticipate challenges before they arise.
However, he cautioned that increased automation must be balanced with employment considerations in a country already grappling with high unemployment levels.
“There must be a balance. While technology improves efficiency, we must ensure it does not come at the expense of jobs, especially where livelihoods are at stake,” he said.
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