The government of Eswatini has proposed new regulations aimed at empowering citizens in the economy. The draft Citizens Economic Empowerment (CEE) Regulations, 2026, outline a two-tier system for participation in certain sectors of the economy. The regulations reserve retail businesses with an annual turnover below E8 million for targeted citizens. This includes general dealers, supermarkets, groceries, pharmacies, hardware shops, and liquor outlets. The proposed regulations were presented at the Hilton Garden Inn in Mbabane.
For businesses with an annual turnover above E8 million, the regulations require approved joint ventures (JV) with a minimum 50.1% ownership by targeted citizens. This category includes larger supermarkets, wholesaling, petrol stations, and cross-border transport. The regulations aim to promote citizen ownership and control in strategic businesses. Minister of Commerce, Industry and Trade Manqoba Khumalo, and Director of Micro, Small, and Medium Enterprises (MSME) Mluleki Dlamini attended the review of the final draft meeting.
The proposed regulations also introduce a procurement provision, which sets aside at least 50% of the total annual procurement value for targeted citizen-owned companies. Within this set-aside, 25% is allocated for women, 25% for youth, and 15% for people with disabilities. This provision aims to create new market opportunities for citizen-owned businesses, particularly those seeking government contracts. If qualifying public-sector procurement for the year amounts to E1 billion, at least E500 million would be set aside for targeted citizen-owned companies.
The regulations have been vetted by the attorney general's office and approved by Cabinet for tabling in Parliament. Existing businesses will be given 12 months to align with the new requirements once the regulations come into force. Existing empowerment programs must also be aligned with the regulations during this period. This transitional period aims to give companies time to adjust to the new empowerment requirements.
The regulations introduce significant changes to economic participation, including the reservation of retail operations with annual turnover below E8 million for targeted citizens. Larger and strategic activities require approved joint ventures with a minimum 50.1% targeted-citizen ownership. The draft regulations also propose heavy penalties for fronting, including fines of up to E500 000 or 10% of turnover, imprisonment of up to five years, or both.
The anti-fronting provisions aim to ensure that empowerment benefits reach the intended citizens. Companies found misrepresenting ownership could face separate penalties, including a fine of E500 000 plus 10% of turnover, and blacklisting from public procurement for up to 10 years. The regulations seek to link access to new economic opportunities with genuine ownership and control.
The proposed regulations have significant implications for businesses operating in Eswatini. The new framework could make turnover and ownership increasingly important considerations when planning expansion, investment, and corporate structures. The regulations aim to promote economic empowerment for targeted citizens, while also providing opportunities for foreign investors to participate in strategic businesses through joint ventures.
Key points
- The regulations propose a two-tier system for participation in certain sectors of the economy.
- The regulations reserve retail businesses with an annual turnover below E8 million for targeted citizens.
- Existing businesses will be given 12 months to align with the new requirements once the regulations come into force.
