30 APRIL 2019

INSIGHTS FOR INVESTING AND TRADING IN ESWATINI

PRESENTED BY MARTIN MASILELAMANAGER INVESTMENT PROMOTION masilelam@sipa.org.sz+26878023486

PRESENTATION OUTLINE

1• ECONOMIC OVERVIEW

2• WHY INVEST IN ESWATINI?

3• PRIORITY SECTORS

4• GAME CHANGING INCENTIVES

5• MAJOR COMPANIES IN ESWATINI

6• TRADE PERSPECTIVES

7• OUR SERVICES

8• CONTACTS

1. ECONOMIC OVERVIEW

• Population - 1,185,429 (2016)

• Land Area - 17,364 km²

• GDP - US$4,818 Billion (2017)

• GDP growth rate - 1.9% 2017

• GDP per capita - US$4,264 (2017)

• Average Inflation – 5.2% ( Dec. 2018)

• Prime lending rate – 10.25% (February 2019)

GROWTH PROJECTIONS

GDP COMPOSITION

WHY INVEST IN ESWATINI?

• PRICELESS DIVIDEND OF PEACE AND STABILITY

• GOOD EMPLOYER-EMPLOYEE RELATIONS WITH EFFICIENT DISPUTE RESOLUTION MECHANISMS

• HUMAN CAPITAL – HIGH LITERACY RATE 89% - NO 11 IN AFRICA

• EXTENDED MARKET ACCESS

• FRAMEWORK FOR INVESTOR PROTECTION UNDER MIGA, ICSID

• COMPETITIVE INCENTIVES

ENABLING BUSINESS ENVIRONMENT

EDU

CA

TIO

N &

ICT

ENER

GY

& M

ININ

G

TOU

RIS

M

MA

NU

FAC

TUR

ING

AG

RIC

ULT

UR

E

FIN

AN

CE

VISION 2022 ECONOMIC GROWTH & JOB CREATION

3. PRIORITY SECTORS FROM GOVERNMENT STRATEGY AND ROADMAP 2018/2023

4. GAME CHANGING INCENTIVES

1. Special Economic Zones Package

20 year tax Holiday for investors, thereafter 5% tax

Research and development allowance

Exemption from training levy

Green technology allowance

2. Non Special Economic Zone

10 % for 10 years

Exemption on with holding tax on dividends for 10 years

Several Allowances:

- Industrial building

- Accelerated depreciation

5. SOME MAJOR COMPANIES IN ESWATINICOMPANY YEARS ORIGIN REMARKS

Conco Limited (Concentrates)

33 YEARS USA sells to over 20 countries in Southern, East, Central North And West Africa

YKK (Zips, fasteners)

43 YEARS JAPAN Sells into various African markets

Air Liquide(Industrial gases)

10 YEARS FRANCE Expanding into gas filling

Texray Industrial (textiles)

16 YEARS TAIWAN Sells into various markets and considering diversification

Illovo(sugar)

22 YEARS + RSA Also co-generating power and exploring expansion

5. SOME MAJOR COMPANIES IN ESWATINICOMPANY YEARS ORIGIN REMARKS

SWEDEN TYRES 3 Years SWEDEN Expanding its value chain

MONDELEZ INTERNATIONAL 30 YEARS USA About 5% sold in the local market and the rest exported

RHODES FOOD GROUP 65 years RSA Vertically integrated company, farming and processing of citrus. One of the biggest in Southern Africa

Bidvest(PPE Clothing )

10 Years RSA Operates in various sectors including hygiene ( Bidvest Steiner and protective Textiles)

5. SOME MAJOR COMPANIES IN ESWATINICOMPANY YEARS ORIGIN REMARKS

HILTON GARDEN INN GUESS! USA To launch in May/June 2019

DD Williamson(Caramel)

20 years USA Supplies Africa, the Middle East, South Asia, and Australia

Al Saddeem Kuwait (Construction)

8 Years Kuwait Joint Venture with Local company in construction

Artemis Life Sciences (Pharmaceticals)

2 years UAE Processing nutritional supplements & Pharmaceuticals

Lomati Gold Mine (Gold Mining)

3 Years Australia/USA

Mining gold since 2015

ESWATINI RAIL MAP

ESWATINI

ESWATINI RAILWAY

HOW ABOUT BRINGING INPUTS INTO THE COUNTRY AND TAKING OUT FINISHED GOODS TO MARKETS?

DEVELOPMENTS IN SCIENCE, R & D AND ICT

1. Service Centre2. Agric. Biotech Industrial

Zone3. Innovation –related Biotech

Industrial Zone4. Cultural Village5. Detention pond

6. Experiment Area and Nursery7. R&D8. Business area

Residential area

1

2

3

4

5

6

7

8

Biotechnology Park

The completed Royal Innovation Park

Opportunities in the Innovation Park

TRADE PERSPECTIVES

Other Products

Soft Drink Concentrates

Sugar

Textiles

Refrigerators

Canned Fruit

Citrus

Beef

32.5%

32.2%

18.8%

8.0%

5.1%

1.8%

1.1%

0.5%

AVERAGE EXPORTS: US$ 1.8 BILLION

Machinery &Equipment

Petroleum products

Electrical appliances

Food & Live animals

Chemicals & chemical products

Vegetable oil & Fat

Other Products

18.9%

2.0%

0.5%

17.5%

13.1%

0.6%

47.4%

AVERAGE IMPORTS: US$1.98 BILLION

South Africa 70%

Rest of the World 30%

IMPORTS

South Africa 79%

Rest of the World 21%

EXPORTS

Source: Ministry of Economic Planning, Company Survey Report 2018

TRADE: INPUTS ORIGIN AND DESTINATION MARKETS

• Generalized System of Preferences (GSPs) - accessing Australia, Canada, Japan, New Zealand, US, EU and the Russian Federation

SACU – 60m pple

COMESA – 360m pple

SADC FTA– 250m pple

SADC - EPA (EU) - 508 Million

SACU- MERCOSUR

EFTA - 75 Million

AGOA – 320 Million

TAIWAN (ECA) - 25 Million

INDIA 1.2 Billion

COMESA+SADC+EAC (Tripartite)

ACFTA

• Expanding to other trade blocs: Asia, Middle East, etc

EXTENDED MARKET ACCESS

ESWATINI

THE COMESA ADVANTAGE

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

361

1203

1952

44126 180

Eswatini Trade with COMESA Countries

Exports Imports

2015 2016 2017

TRADE WITH EUROPE TOP 4

2017 2016

Italy Portugal

Spain Romania

United Kingdom

Finland

Romania United Kingdom

2017 2016

United Kingdom

Ireland

Germany Germany

Netherlands Italy

Belgium United Kingdom

DESTINATION FOR EXPORTS SOURCE OF IMPORTS

ESWATINI INVESTMENT PROMOTION AUTHORITY (EIPA)

Business Set-Up

Registration and Licensing

Due DiligenceTaxation and

IncentivesProperty and

Facilities

Statutory Rights

Statutory Compliance

Finance and Central Bank

Approvals

LAUNCHINVESTMENT

& TRADE PROMOTION

A NEXUS OF APPROVAL FORMALITIES AND COMPLIANCE REQUIREMENTS

END

CONTACT

Martin Masilela

Manager Investment

Email: masilelam@sipa.org.sz

Tel: (+268) 2404 0470/2/3

Mobile: (+268) 7802 3486

Website: www.sipa.org.sz

ESWATINI