MATSAPHA – The textile and apparel industry is warning of imminent retrenchments as operating costs spiral beyond sustainability.
This sector employs more than 22 000 emaSwati and contributes about 7.6 per cent to gross domestic product (GDP).
Factory owners claim a convergence of pressures, a 15 per cent value-added tax (VAT) on water introduced on February 1, 2026, steep electricity tariff increases effective April 1 and a proposed 66.67 per cent salary increment over three years, have pushed the sector to the edge.
On Tuesday, the Eswatini Energy Regulatory Authority (ESERA) approved an average electricity tariff increase of 13.61 per cent for 2026/27. While this is lower than the 20.67 per cent sought by the Eswatini Electricity Company (EEC), the structure of the hike has rattled manufacturers.
Corporate energy charges and demand charges will each rise by 17 per cent. For textile factories, where electricity accounts for roughly 40 per cent of total expenditure, the textile industry players say the increase strikes at the core of production costs.
The employers argue that the VAT on water further compounds their burden. They claim VAT refunds are only claimable if a business accrues over E900 000 in profits, a threshold many say is now unattainable amid declining orders.
“The cost of doing business is no longer predictable. We are absorbing costs from utilities, rentals, transport and raw materials, yet our selling prices are dictated by buyers outside our borders,” said one industry insider.
South Africa remains the primary market for Eswatini’s garments. However, textile firms report declining orders from major retailers such as TFG Group and Woolworths.
While South Africa’s October retail data showed a 5.8 per cent year-on-year increase in textiles, clothing and footwear sales, industry sources say this growth is largely promotion-driven, with retailers discounting heavily. That, in turn, pushes them to procure at the lowest possible cost.
It is worth noting that South Africa lost 194 000 jobs in retail and trade in 2025, the highest among all industries, based on Statistics South Africa’s report, reflecting constrained consumer spending.
The textile employers said when retailers struggle, they inevitably feel the shock.
Local manufacturers said the impact is visible. Drake Clothing closed last year, leaving about 350 workers jobless. Golden Jubilee Textiles ceased operations, affecting roughly 650 employees, though it has pledged to reopen. In 2023, Kasumi Apparels Textiles closed, costing 1 782 jobs before eventually resuming operations.
Against this backdrop, the Amalgamated Trade Union of Swaziland (ATUSWA) has tabled a wage proposal. Secretary General Wander Mkhonza confirmed the union would push for a three-year increment that would raise average monthly wages from E2 400 to about E3 900.
The union is also seeking cost-of-living adjustments (CoLA), pension coverage and funeral benefits. While acknowledging improvements by some firms that raised hourly rates from E15 to E18, Mkhonza insists workers deserve dignity and security.
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