Eswatini rolls out welcome mat for Singapore firms to invest in the African nation

SINGAPORE-BASED Tolaram’s latest investment in Africa - an injection of US$34 million to set up a noodle manufacturing facility in Eswatini last year in partnership with US multinational Kellogg’s - was possible because of the strong backing of the Eswatini government, said Tolaram’s managing director Haresh Awani.

“The support we received from the government was fantastic. Their frameworks are easy to navigate, and generous incentives are provided to encourage investments into the country,” he said during a seminar organised by the Singapore Business Federation (SBF) and Enterprise Singapore on Tuesday (June 28).

This joint venture (JV) between Tolaram and Kellogg’s reinforces the relationship between Eswatini and Singapore, and the African country wants to extend more of such opportunities to Singapore companies, said Eswatini’s King Mswati III at the event.

“This development forms part of our objectives to encourage the expansion of existing businesses and increase the rate of new investment projects, while we actively exchange business and development programmes between our 2 countries,” he said.

Tolaram’s Eswatini factory is its second in Africa and employs 220 staff. Its other project in the continent is in Egypt, also done in partnership with Kellogg’s.

The Tolaram-Kellogg’s JV made up a significant chunk of the total of US$44 million worth of foreign direct investment that Eswatini received in 2021, said Sibani Mngomezulu, chief executive officer of Eswatini’s Investment Promotion Authority.

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“There is huge competition for investments of that nature. We do get expansions from companies in adjacent territories looking to expand, and they consider Eswatini,” he said.

Eswatini - a landlocked country formerly known as Swaziland and has a population of about 1.1 million - is constantly shaping its investment climate to ensure the operating environment is favourable to businesses, said King Mswati III.

Speaking to reporters, Eswatini’s Minister of Commerce, Industry and Trade Manquoba Khumalo shared that the country imports about 65 per cent of its total energy needs from South Africa through an agreement that is set to expire in 2025. Eswatini produces the remaining 35 per cent using hydropower.

Khumalo shared that Eswatini is eager to work with Singapore companies to help the country develop a US$1.2 billion integrated power project. This project will both substitute the energy the country imports and will have the capability to sell excess energy, if any, to South Africa, which itself is facing a shortage of energy.

At the briefing, the audience was told that Eswatini’s economy is home to about 60,000 small and medium-sized enterprises (SMEs) - about 37 per cent of them are in the manufacturing sector, 17 per cent in agriculture, and 5 per cent in tourism.

“There are more than 100 Singaporean companies operating in Africa,” said Mngomezulu. “There’s an opportunity for SMEs across the supply chain.”

Khumalo noted that one major obstacle that Eswatini faces is the assumption that the country is a small market.

“We see ourselves as a launchpad for businesses that are seeking to supply either goods or services to the region,” he said, adding that companies could make use of the African Continent Free Trade Area that Eswatini is part of.