The retail sector in Eswatini is poised for a significant transformation with the introduction of new draft regulations aimed at promoting citizen ownership. According to Lincoln Motsa, Chairperson of the Citizens Economic Empowerment Council (CEEC), qualified locals are equipped to lead the sector, particularly in businesses with an annual turnover below E8 million. Motsa, also the businessman behind OK Foods retail outlets, expressed confidence in the ability of Emaswati to take over the retail sector.
Motsa cited the experience of employees in his OK Foods supermarket chains who have worked as managers for years and accumulated considerable operational experience. He noted that these individuals, along with educated students from tertiary institutions, possess the skills needed to operate businesses but lack access to capital. Motsa emphasized that with the right support, such as financing from banks, locals can successfully manage businesses and drive economic growth.
The proposed Citizens Economic Empowerment (CEE) Regulations seek to increase citizen ownership and broaden economic participation through procurement, strategic partnerships, and community-level benefits. Under the final draft, retail businesses with an annual turnover below E8 million will be reserved for targeted citizens, while larger businesses in specified strategic sectors can accommodate non-citizen participation through joint ventures with at least 50.1% ownership by targeted citizens.
Commerce, Industry and Trade Minister Manqoba Khumalo expressed support for the transition, citing the need for confidence in the ability of Emaswati to participate meaningfully in the economy. He acknowledged that the transition may not be seamless but emphasized the importance of trusting Emaswati to drive economic growth. Khumalo also highlighted the need for transitional clauses and other mechanisms to prevent disruptions as businesses adjust to the new framework.
The regulations are also expected to provide for communities hosting major capital projects to benefit directly, particularly where natural resources are involved. Traditional authorities may be incorporated into such arrangements, ensuring that local communities reap the benefits of economic activities. This approach aims to promote broader economic participation and spread the benefits to communities.
Motsa drew inspiration from Botswana's experience, where deliberate policies to promote local production resulted in broader economic participation. He noted that initial public concern over restrictions on imported vegetables eventually gave way to partnerships between foreign-operated businesses and local farmers, improving production and spreading benefits to communities. Motsa believes that Eswatini can adopt a similar approach to drive economic growth.
The implementation of the CEE Regulations is expected to be a phased process, with safeguards in place to prevent supply chain interruptions during the operational handover. The CEEC and the Ministry of Commerce, Industry and Trade will work together to ensure a smooth transition and provide support to businesses and communities as they adjust to the new framework.
Key points
- The new regulations aim to reserve retail businesses with an annual turnover below E8 million for targeted Eswatini citizens.
