Wits Business School Director, Professor Paul Alagidede says small and medium-sized enterprises (SMEs) need to get into the business of transforming what is produced in order to realise more economic benefits.

This was during a public lecture on ‘SMEs and Industrialisation: Materialising SDGs 8 & 9 in Eswatini’ hosted by the Eswatini Economic Policy Analysis and Research Centre (ESEPARC) last Thursday (January 17) at Happy Valley Hotel. ESEPARC partnered with the Ministry of Commerce, Industry and Trade’s SME Unit to host the lecture, which also received support from the United Nations Development Programme (UNDP) in Eswatini.

“We need businesses that bring real solutions to the myriads of problems that bedevil society. We need enterprises that create opportunities and industries that will help us distribute the nation’s resources. We need industries that honour the planet and our common humanity. For too long we have been taught how to take from the planet and not putting back in; this has to change,” he said.

He noted that Eswatini has unique advantages that must be taken advantage of, such as the fact that agriculture remains the backbone of the country’s economy as it accounts for 9% of gross domestic product (GDP) and 70% employment. Also, he noted that about 75.8% of Eswatini is rural, and the country has a very youthful and agile population, which is a comparative advantage on its own.

ESEPARC Research Economist Mangaliso Mohammed lamented the fact that Emaswati are not engaging in the painful activity of starting up new businesses in Eswatini, where they can focus on producing their own products, but instead it seems they are content with supporting the businesses found outside the country’s borders, at the detriment of Eswatini’s GDP.

He said reigniting growth in Eswatini requires expanding the economic base, which is essentially the people who are actively engaged in economic activities by ensuring that Emaswati produce goods and services that can be flooded into the market.

He also noted that Eswatini has a youthful population so it is important to engage them in the economy as they are the future, particularly in the SME sector. Also, he emphasised that the private sector needs to play a huge role in turning the economy around instead of looking towards government for business.

“Currently, we are happy to be middlemen; we go into retail and import goods we have not produced yet the money (or value creation) is in the production of these goods. We need a new stock of entrepreneurs to produce goods and services in Eswatini; we need to support local value chains that focus on goods made in Eswatini so that we can increase the number of times our currency circulates within our economy before it leaves to other countries,” he said

A young local entrepreneur, Mbali Nxumalo who runs a clothing company based in Johannesburg, said while they appreciate government’s efforts in encouraging youth entrepreneurship, they still faced difficulties in acquiring information relating to operating a business in Eswatini.

She said currently, government departments seem to work in silos and yet it would be much easier for entrepreneurs if there was an information centre or one-stop shop for business people to get all the assistance they need in terms of services such as company registration, taxation, and others. Adding, she said the bureaucracy is exhausting for an upcoming entrepreneur who is just starting out in business.

Another attendee said while part of government’s attraction to foreign investors is tax holidays, domestic businesses are not afforded similar incentives to help them grow. He further wanted to know how SMEs can benefit from such incentives as the current tax regime hinders their growth.

In response, SME Unit Director Mluleki Dlamini said the Ministry of Commerce, Industry and Trade would engage the Eswatini Revenue Authority to try and find solutions to such issues as government remains committed to ensuring that the SME sector develops and grows exponentially.

Meanwhile, on capacity building initiatives for SMEs, the director noted that government has partnered with a number of institutions, such as Junior Achievement Eswatini and Enactus on entrepreneurship programmes and business management training.

“I think the same can happen on innovation as well as research and development. If a partner comes forward we can have a similar arrangement in terms of funding such a programme. We now also have an institution that provides information technology training and we do refer entrepreneurs to utilise this facility,” he added.

Adding to the conversation, Research Economist Mangaliso noted that public-private partnerships are very important for economic growth. However, he emphasised that the private sector must also think through the type of industry they want to set up and have a proper plan in terms of what they want to do so that when they go to government for assistance, they know exactly what kind of assistance they need.

“Government is not in the business of creating jobs, it is the private sector that is able to do that, hence it is the private sector that must take the lead to transform industries,” he added.