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Business Overview

Although a small, landlocked country, Swaziland possesses a number of strategic advantages making it ine of the most strategic investment locations and trading partners on the African continent.

Swaziland is located in the south eastern portion of Sothern Africa and shares borders with the Republic of South Africa to the west and north west, and with the Republic of Mozambique to the east. This startegic position places Swaziland in close proximity to major air, road and rail networks in the Southern African region, giving her easy access to international transport and communications networks. This strategic position brings 265 million individuals from the wider SADC region and 416 million individuals from the COMESA region right to your doorstep!

Language

The official languages are Siswati and English, with a mojority of the population being bi-lingual. The official business language is English, with official notices being published in English.  

Infrastructure

The industrial hub of Swaziland is some 600km from the seaport of Durban, 350km from the port of Richards Bay and 200km from the seaport of Maputo. Swaziland has invested substantially in a highly sophisticated road transport network.

Competition Law

Competitve practices in Swaziland are regulated by the Competiton Act of 2007 and is admiistered by the Competion Commission of Swaziland. The main objective of the Act is to provide a legal fframework for the encouragement of competition in the economy by controlling anti-competitive trade practices, mergers and acquisitions, protecting consumer welfare and providing for an institutinal mechanism for implementing the objectives of the Act and other matters incidental thereto.

Trading Partners

Cognizant of the small domestic economy, the Swaziland Government has since independence, adopted a liberal trade policy regime. Swaziland’s economy is very open, with the ratio of imports to GDP being 102% and that of exports 105% for 2002 Balance Payments statistics. Access to the world’s lucrative markets makes Swaziland an ideal investment location.

• Southern Africa Customs Union (SACU) - the SACU agreement dates back to 1910 rendering the customs union the oldest in the world. This is an agreement that allows for the free movement of goods between member states(Swaziland, South Africa, Botswana, Lesotho and Namibia), enabling each to receive its due share of the customs pool generated by commodities imported from non-member countries. A new SACU Agreement was signed in November 2002, which has established a common negotiating mechanism for dealing with third parties. Since then, a series of negotiations have ensued and these include the SACU/USA FTA, SACU/MECORSUR FTA, SACU/EFTA, among others. It is anticipated that these negotiations will create a much greater market for Swaziland.
• Southern African Development Community (SADC) - an association of 11 Southern African States, whose objective is to sustain regional collaboration in order to promote economic growth and improve general conditions for the various populations. Members of SADC include: Swaziland, South Africa, Namibia, Botswana, Lesotho, Malawi, Angola, Mozambique, Zambia and Zimbabwe. The SADC Trade Protocol was signed in 1996 and committed signatories to the establishment of a Free Trade Area by 2008.
• African Growth and Opportunities Act (AGOA) - Swaziland is among the sub-Saharan African countries which currently benefit from AGOA. These enables products from qualifying countries to be imported to the US duty-free.
• COMESA - represents 19 countries from the north-east of Africa, providing for preferential trading terms between member states. Swaziland is a member of COMESA, a Regional Economic Group comprising of 18 member states with a market of 340 million consumers.
• European Union/South Africa Trade Agreement - this provides for reduced tariffs on goods exported from Europe into South Africa. Swaziland has an indirect impact through SACU as she would also benefit from lower priced imports
• The European Union
• World Trade Organisation (WTO)
• The Cotonou Agreement - Signed in June 2000 (replacing the Lom' Convention), as an agreement between the European Union (EU) countries and the African, Caribbean and Pacific (ACP) countries, and provides for export commodities originating from ACP states to enter EU countries free of customs and other duties. Swaziland has joined the ACP countries in negotiating an Economic Partnership Agreement with the EU.
• Generalised System of Preference (GSP) - trade relations with the European Union dates back to more than 50 years and provides for goods that originate from developping coutries to be imported into many industrialised countries at reduced customs levies. These include EU member states, USA, Canada, Japan and Australia.
• New Partnership for Africa's Development (NEPAD) - established to enhance the attractiveness of African staes in terms of foreign direct investment. The common goal is that these countries must eradicate poverty, based on sustainable growth and development, while paricipating in the world economy.
• AGOA -
  • AGOA was signed into law on May 18, 2000 as Title 1 of The Trade and Development Act of 2000. The Act (known as AGOA I) offers tangible incentives for African countries to continue their efforts to open their economies and build free markets.
  • AGOA provides eligible sub-Saharan countries with the most liberal access to the U.S. Market accorded to any country or region that has not negotiated a free trade agreement with the U.S.
  • On August 6, 2002 as Sec. 3108 of the Trade Act of 2002, AGOA II amended AGOA 1 to substantially expand preferential access for imports from beneficiary Sub-Saharan African countries was signed by President Bush.
  • By modifying certain provisions of the AGOA II, the AGOA Acceleration Act of 2004 (AGOA III) now accords duty-free and quota-free treatment to almost all products exported by the beneficiary sub-Saharan countries to the US until September 30, 2015.
  • AGOA III extends the third country fabric provision until September 30, 2007, including a phase down in year three. The cap would remain at the full current level available until the third year when it would be phased down by 50 percent.
  • AGOA benefits are currently extended to 37 countries, including Swaziland, and to over 6400 tariff line items, which includes at least 1800 tariff line items more than the 4600 items already in enjoying duty-free status under the U.S. Generalized System of Preferences (GSP) program.
  • AGOA has expanded the list of products enjoying duty-free treatment in the U. S. to include several major import-sensitive items such as apparel, footwear, luggage, handbags and watches.

What is AGOA?
• AGOA benefits?
  • AGOA promotes increased trade and investment between the US and beneficiary countries
  • It provides for sub-Saharan countries to achieve political and economic reform
  • AGOA promotes export diversification in the beneficiary countries
  • It provides additional security for both sub-Saharan exporters and potential U.S. investors by ensuring AGOA benefits until 2015 and third country fabric benefits until September 30, 2007
  • It promotes expanded regional integration and product diversification sharing among AGOA countries, and provides job creation and economic growth within those countries

Eligibility Requirements: General

• Sub-Saharan countries must meet specific U.S. government criteria to qualify for AGOA benefits, including that they are establishing a market –based economy, have a sound rule of law, eliminating trade and investment barriers, and have practical poverty reduction, worker rights protection and corruption elimination policies
• General eligibility for AGOA benefits does not guarantee beneficiary countries AGOA eligibility specifically for their apparel exports to the U.S. For the apparel exports the beneficiary countries must also adopt a U.S. government approved visa system and domestic laws and enforcement measures to prevent illegal transshipment of the apparel and use of the counterfeit documents.
• Products must be grown, produced or manufactured by a beneficiary country through more than a simple combining or packaging operation, and they must be exported directly to the U.S.
• A beneficiary country must provide at least 35 percent value added to an exported product in the course of the manufacturing process.
• Agricultural products exported by AGOA countries to the U.S. must comply with regulations established by the U.S. Agriculture Department to protect the health of the American public.

The U.S. Bioterrorism Act, a bill that seeks to protect the American public, requires that companies exporting products to the U.S. (with the exception of meat, poultry, and egg products) must provide the Food and Drug Administration (FDA) with advanced notice of each shipment entering the U.S. In addition, firms that manufacture, process, pack or hold food for export to the U.S. must register with the FDA.

Eligibility Requirements: Textiles and Apparel

The beneficiary countries must: -

• Ensure that unlawful transshipment does not occur and that the benefits accrue only to the beneficiary country
Implement an effective visa system and have laws, regulations and administrative procedures that prevent transshipment and use of counterfeit documents. This includes the requirement that the original commercial invoices for each shipment be stamped with an official government visa Also have implemented and follow, or be making substantial progress towards implementing and following certain customs procedures intended to assist the U.S. Bureau of Customs and Border Protection in verifying the origin of the product they are exporting to the U.S. Agree to permit verification visits to their factories and maintain detailed records relating to the production and/or exportation of the eligible goods for five years

Eligibility Requirements: Agriculture


• The products must be grown, produced and manufactured by the beneficiary country through a more than simple combining or packaging operation; and they must be exported directly to the U.S.
• At least 35 percent of value addition must be contained in the processing of the exported good
• In order to prevent entry and spread of diseases, the U.S. government enforces specific food safety regulations and countries exporting under AGOA fully meet these requirements

Foreign Direct Investment

In order to promote the creation of employment opportunities, the Swaziland Investment Promotion Authority(SIPA) promotes Swaziland as an "Investment Location of Choice" to Investment Markets abroad such as Taiwan, Malaysia, Mauritius, the Republic of South Africa, Europe, United States of America and the United Kingdom. In this process, investment opportunities in Swaziland are presented to companies in seminars in groups or to individual companies on "one-on-one" basis based on direct targeting of companies.

Over the past eighteen months, SIPA has made Investment Seminar Presentations to groups of potential investors in Taiwan, The Chinese Chamber of Commerce in Johannesburg and Newcastle (South Africa), The American Chamber of Commerce in South Africa, The Japanese External Trade Organisation in South Africa (JETRO), Berlin and Hamburg (Germany), Brussels, Paris, and Luxembourg. Direct investment marketing has been conducted in Taiwan and South Africa (Johannesburg, Durban, Newcastle and Pinetown). Some companies have made site visits to Swaziland to assess the investment opportunities. Companies who have been interested in joint-venture partners have been referred to the major Investment companies such as Tibiyo Taka Ngwane and the Swaziland Industrial Development Company (SIDC) as well as other smaller individual companies. Liaison with SIDC has also been maintained on the availability of ready-made factory shells.

For more information on the Swaziland Investment Promotion Authority please visit http://www.sipa.org.sz

Business and Investment Entities

• Swaziland Investment Promotion Authorirty
• Small Enterprise Development Company
• Swaziland Industrial Development Corporation 
• The Hotel and Tourism Association of Swaziland
• Swaziland Association of Architects, Engineers and Surveyors
• Swaziland Institute of Accountants
• Swaziland Law Society
• Swaziland Medical and Dental Council
• The Building Constructors Association of Swaziland