Consolidating the nation’s financial sector through the improvement of its business climate and the proliferation of opportunities for private sector-led growth.
Economies grow due to the implementation of good fiscal and financial policy and Minister of Finance, Hon. Neal Rijkenberg’s, turn-around strategy is proof of this, even calling attention to the likes of the African Development Bank (AfDB) which recently expressed its utmost confidence in Eswatini’s GDP growth. “There is an element of the government crowding out the private sector,” states Hon. Neal Rijkenberg. “We are on a privatisation drive which will offer great opportunities for European companies.”
The government’s focus upon improving its ease of doing business also comes into play, with new legislations set up to ensure rapid company registration and trading licences through e-platforms, among others.
Indeed, founded upon an export-orientated economy, Eswatini’s strong and stable finance sector is increasingly becoming highly attractive to new investors to the country. “We have the basic economic infrastructure needed to attract international investment,” explains Dumisani J. Msibi, Group Managing Director of Fincorp. “Eswatini also has access to global markets, such as SACU, SADC, COMESA, as well as other economic partnership agreements.”
According to Mvuselelo Fakudze, CEO of Standard Bank, exportation is Eswatini’s ticket to progress and opportunity. “We have a balance of payments surplus, because we export more than we import,” he affirms. “The real opportunities lie in the export sector and exportation requires a lot of funding if you really want to grow in scale.”
In order to speed up Eswatini’s economic growth, while channelling its excellent relations with neighbouring countries, Special Economic Zones (SEZs) have been established, such as the King Mswati III International Airport and the Royal Science and Technology Park. Investors who establish their businesses here will benefit from a bevy of tax incentives such as: 20-year exemption from all corporate taxation (after while taxation will be 5%); full refunds of customs duties, value-added tax, and all other taxes payable in respect of goods purchased for use as raw material, equipment, machinery, and manufacturing; unrestricted repatriation of profits; and full exemption from foreign exchange controls for all operations within the SEZ.
With US$300 million invested in projects during the 2017/18 financial year alone, infrastructure remains the prime sector for future bank investments in the country. “The private sector prioritises efficiency,” declares Sandile Dlamini, CEO of Financial Services Regulator Authority (FSRA). “Fifty percent of the assets under our supervision are going to provide the environment to attract FDI.”
While the financial sector is the nation’s economic backbone, its robust, regulated and stable banking sector is intent on providing the opportunities. Nedbank’s MD, Fikile Nkosi, claims, “it is well capitalised, with sufficient liquidity and it is very transparent, the banking sector is a catalyst and big contributor to the GDP.” Under the regulation of Eswatini’s Central Bank, the banking sector is actually “one of the winning cards the country flags to attract investors to come to the country,” according to its Governor, Majozi V. Sithole. Its bank’s commitment to fintech plays an important role in this. “There is a very strong social need for financial solutions that can be deployed through mobile and digital platforms,” explains Dennis Mbingo, CEO of FNB Eswatini.
Its ability to provide solutions for every sector of the economy, facilitating payments and penetrating the unbanked sector results in liberalising the banking sector in order for it to be sustainable and aligned to international standards. Timothy Nhleko, MD of Swaziland Building Society elaborates: ‘fintech development is important in the sense that it is a venue where skills can be grown. If the country wants to remain part of the global village, it has got to up its game when it comes to technology.” An enabler to business and industrialisation, the banking sector are partnering with fintechs in order to upgrade its expertise and innovation.
In 2018, Eswatini’s Central Bank, in collaboration with The Royal Science and Technology Park, the Eswatini Communications Commission and the Financial Services Regulatory Authority launched its successful Fintech Challenge in an attempt to support local technologies, promote innovation and endorse MSMEs.
Indeed, the banking sectors’ focus on assisting and providing SMEs with funding is considered a priority to the expansion of the nation’s economic base, as well as its call to engage with value addition, which would reduce imports and increase job creation. Standard Bank’s commitment in the SME sector in order to assist the growth in the economy, for example, has resulted in the funding of at least 7,000 SMEs.
The private sector in Eswatini is playing a huge role in turning the economy around, instead of looking towards the government for business, the view is being reverted outwards and beyond, where business opportunities are finally having the chance to thrive and flourish.
