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ESWATINI RANKED 12TH FROM BOTTOM IN INVESTMENT ATTRACTIVENESS

04/10/2020 06:41:00 BY SABELO MAJOLA

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MBABANE – Eswatini is ranked 12th from the bottom in 54 African countries who have investment attractiveness in the continent.

Dubbed ‘Where to invest in Africa 2020’, Rand Merchant Bank (RMB) has released a report that ranked African countries according to their ease of doing business and their investment attractiveness.

RMB is the gateway to corporate and investment banking in Africa and part of one of the largest financial services groups (by market capitalisation) in Africa – FirstRand Bank Limited.

The country was ranked 42 out of 54 countries and RMB cited inefficient government bureaucracy as the most problematic factor for doing business in Eswatini. On selected global competitiveness pillars, out of a 100, Eswatini scored 22.71 on innovation and 24.94 on technological readiness.

However, the scores were fair on labour market efficiency and financial market development where the scores were 57.45 per cent and 51.90 per cent respectively. The country also scored fairly on business sophistication (business dynamics) with a score of 50.68 per cent.

On inputs into the composite operating environment scores, Eswatini was low on corruption perception index where out of 10, the country scored 3.8. Corruption is one of the elements that the country has prioritised in the list of items to combat.

Out of 198 countries globally, Eswatini was ranked 117 in the ease of doing business index. The Ease of Doing Business index is a ranking system established by the World Bank Group and in the index; higher rankings (a lower numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.

RMB firmly believes that Africa is home to vast business opportunities despite the many challenges facing our continent.

“What we need most to unlock Africa’s potential is partnerships that can transform these challenges into opportunities.”

On Africa’s regional growth rates between 2019 and 2024, it is projected that in Southern Africa, economic growth is expected to remain relatively subdued over the next few years mainly due to the economic slowdown in South Africa, the largest regional economy, which has a ripple effect on neighbouring countries.

IT’S NOT TRUE REFLECTION - MANQOBA

Minister of Commerce, Industry and Trade Manqoba Khumalo said government did not believe that this ranking was a true reflection of what was currently obtaining on the ground.

He said the Government of the Kingdom of Eswatini had introduced a number of reforms to improve ease of doing business and continues to make significant strides in terms of improving the business environment.

“It is important to note that rankings are generally affected by the different methodologies used by the different evaluating companies. And as much as these rankings create a negative perception about the country, we still invite investors to visit the kingdom to experience what we offer; which may not have been considered when determining the rankings,” he said.

On what the country could do to improve the ranking and make the ground more conducive for investors to be attracted to investing in the Kingdom of Eswatini, the minister said one of it was continuous improvement of the business environment.

He said another one was ensuring that the reforms undertaken in the country were communicated and marketed to ensure the public and investors are aware of what is happening in the country than relying on third parties.

“The media can also play a crucial role in disseminating positive information about the country. Engage the compilers of the reports to ensure that the data used in these reports is reliable and not biased,” he said.

we can learn - FESBC

Echoing the Minister was Federation of Eswatini Business Community (FESBC) Vice President Hezekiel Mabuza who stated that the country had done a lot in terms of levelling the ground for investors and that was magnified by the recently launched post-COVID-19 recovery plan which was a private sector led plan.

Mabuza said the private sector led recovery plan was a step in the right direction by government in addressing the challenges of unemployment, sustainable development goals (SDGs), poverty and many other aspects that have a great potential of turning things around for the country. “Through this initiative, government is trying to get small and medium enterprises (SMEs) participating meaningfully in the economy and that is one significant aspect to speedily resuscitate the economy,” he said.

However, Mabuza was cognisant of the dynamics unearthed by the study and how they were contributing to the country’s snail pace in reviving the economy, which was already on its knees even before the outbreak of COVID-19.

He zoomed in on the aspect of technological readiness where out of 100, Eswatini scored 24.94 per cent. Mabuza said the country should emulate other states which have done away with irrelevant tools and approaches of doing business and adopted the fourth industrial revolution, which has become the new mostly adopted model in this era.

“We should also look into our policies and determine whether they are still relevant and taking us forward or 10 steps back. Review those that need reviewing and do away with those that have irrelevancy in the era that has been widely informed by the outbreak of the pandemic,” he said.

However, Mabuza was cognisant that the country was seen to be vigilant on the issue relevancy, making an example on the policy change by government on the age restriction on import cars from 15 years to 7 years where government is trying to increase its intra-SACU performance and boost its revenue from the union.

On corruption, Mabuza said the country could not run away from this challenge because the compilers of reports of this nature are vigilant in terms of projects implemented and progress on it and their conclusions on corruption are drawn from the results on the implemented projects which most of the times are informed by findings by committees like the Public Accounts Committee (PAC).