Mbabane: In the midst of the COVID-19 outbreak Eswatini is looking ahead to a post-pandemic world, putting plans in place to position itself as aitself as a top investment destination in Africa.
The Prime Minister Ambrose Mandvulo Dlamini has said the country is looking for transforming its corporate environment to make it easier for businesses to operate and as government they are gunning for the lead position on ease of doing business in Africa post pandemic.
In an article drafted to the Financial Mail the PM said though the country is currently in a coronavirus-induced lockdown, they are confident that, when the dust settles, they will use every opportunity to bring business into the country.
He said they are ready to increase their competitive advantage in Africa and improve the conditions conducive to doing business. Trading across Eswatini’s borders will become easier for investors as government will work to fulfil the goals of government’s Strategic Roadmap 2019-2022, which was initially crafted to push the kingdom into double-digit growth and attract further foreign direct investment. However, said the PM, with the Covid-19 pandemic significantly affecting the global economy, government is now bracing for lower-than-anticipated growth and preparing for recovery.As it stands, government has acknowledged the complaints of potential investors — including procedures that affect and prolong the launch of businesses, delays in securing permits and trading licences, and the high corporate tax rate.
“We have also noted that investors sometimes don’t recognise the vast value that each country on the continent can offer — Africa is treated as a single entity, leading to major setbacks in investment by multinationals.To remedy this, we are re-educating the world on what Eswatini can offer. We want to use this as an opportunity to show the world that the kingdom is open for business,” said the prime minister.
“We plan to reduce corporate tax from 27.5% to 12.5%, making ours the lowest corporate tax-rated nation in Africa he said.Eswatini will now have reduced registration times for businesses, as well as quick turnaround times for trading licences, among many other interventions,” said the PM.
The PM said government recognises that the corporate tax rate has a significant influence on investors, both local and foreign, as it affects the cost of their projects, adding that investors are already reacting positively to the upcoming reduction in corporate tax. He said they are receiving a slew of inquiries, and investment leads are coming to consider Eswatini an ideal location.
He said furthermore, existing companies may now consider retaining their investments and expanding their operations locally instead of repatriating profits to their home countries or to lower-tax jurisdictions.
“The government is committed to paving the way for businesses to come into the country and we will implement this in phases,” said the PM.He added that the country has the potential to attract a diverse range of investments, from large multinationals to regional franchise brands and they also see potential in domestic investors, who may be encouraged to expand their businesses or venture into new start-ups.
Eswatini has already established foreign direct investment leads worth E1.39bn (R1.4bn) with conditions as they stand and government expects this value to increase to E2bn when business conditions are loosened. The PM said this bodes well for the Emaswati communities who will benefit the most from these measures.
Currently, Eswatini has an unemployment rate of 23%, with young people most affected, however, the government is committed to reducing high youth unemployment and creating an environment that will retain the technical talent we have, said the head of government.
“While we recognise that the ease-of-doing-business measures will not be the silver bullet to address all our challenges, we are encouraged by the progress we are making in becoming a top business destination. We remain committed to the advancement of our kingdom through efforts that will drive growth and jobs for all Emaswati,” he said.
Government Acting Spokesperson said the PM’s statement to the Financial Mail incorporates well with his recent report on the relaxation of the extended lockdown regulations during a press briefing at the Cabinet offices.