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FOREIGNERS MAY SOON BUY LAND

13/01/2020 07:53:00 Stanley Khumalo

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MBABANE – With projections on economic growth set at 2.9 per cent this year, it is predicated on improving investor confidence and robust growth among several exporters of agricultural commodities.

To this projection of Sub-Saharan Africa by the World Bank, the Minister of Commerce, Industry and Trade, Manqoba Khumalo, said his ministry was already working on instilling confidence among investors. One challenge that has derailed the means to attract foreign direct investment (FDI) into the country has been the ban on foreign nationals procuring title deed land in the country.

Decelerating

This saw the real estate sector decelerating by 1.5 per cent and to deal with this, Khumalo said in December they were hosted by the Prime Minister, Ambrose Mandvulo Dlamini, to discuss this very issue. “Four key ministries were represented at ministerial and principal secretary (PS) level: Commerce, Finance, Housing and Natural Resources. The Attorney General’s office was also present. We came up with a number of action plans to try and resolve this issue within the confines of existing legislation. We’ll be further engaging the private sector and the banking sector to discuss the potential solutions and thereafter announce a way forward.”

Khumalo said an option of capping the retail price of the property investors were to buy was part of the options discussed during the meeting. “Such an option is definitely best practice in most advanced economies. Our current legislation may not provide for that, but as the issue is discussed further in the course of the year it will be tabled as a potential solution. However, from the meeting I referenced above we have a proposal that would solve the problem in the immediate term if all parties involved align on the correct interpretation of the law and its application.”

The minister said the law did allow foreigners to purchase property under certain stringent conditions and that was what government needed to validate and test before it pronounced a formal government position. He said they were dedicated to solving this challenge due to the fact that it worked against the ministry’s quest to attract as much FDI as possible. Meanwhile, another critical sector that has prospects of alleviating the country from its fiscal crisis is mining.

Negative

Mining in the last quarter had a negative growth of one per cent. In dealing with this challenge, Khumalo said his ministry working closely with the Ministry of Natural Resources and Energy and through the Eswatini Investment Promotion Authority (EIPA) had identified and lured a number of investors in the last year. He said the investors were waiting to engage with the Mining Board once it was fully constituted. “There are potential investors from India, Indonesia, Dubai and South Africa. His Majesty initiated relationships with most of these investors as he engaged with the international community and world leaders in the last year.

They are interested in a variety of projects; namely gold, coal and iron ore. We are encouraging these investors to also focus on beneficiation. One of these investors will soon start setting up a precious stones refinery in Eswatini, a good example of how we want investors to also focus on beneficiation. Khumalo said the Ministry of Natural Resources was working to properly reconstitute the Mining Board through the standard process and he anticipated that this shall be achieved in the early months of this year so that his ministry facilitated requisite approvals for all mining investors.

Prospecting

“For example, a Russian Company will be here in February looking to start prospecting for precious minerals. They’re already in the process of registering their company. We need the Mining Board to approve their prospecting license before they start. If the Mining Board is not in place in good time then it will be a missed opportunity as an example.” These initiatives come at a backdrop of growth projections in Sub-Saharan Africa having moderated to a slower-than-expected 2.4 per cent in 2019. The World Bank’s Global Prospect report released last Wednesday stated activity was dampened by softening external demand, heightened global policy uncertainty, and falling commodity prices. Growth in the region, according to the World Bank, is expected to firm to 2.9 per cent in 2020, and accelerate further to an average of 3.2 per cent in 2021-22.