Mbabane: There is increasing global competition for investments yet countries are increasingly positioning themselves to win more investments. The share, however, that goes to developing countries, especially Africa, remains low. Nonetheless, there is renewed interest in investing in the region.
The global economic meltdown and the financial woes in Europe and the United States have seen dampening economic prospects, especially for export reliant economies. This has led to the emergence of new sources of investment. Not only have we seen new sources of investment from countries like India, Brazil, China, Russia and various others sources in Africa, but various sources of financing have come to the fore, including sovereign wealth funds and private equity funds.
Against this background, countries have to continuously increase their attractiveness to both local and foreign investors. The Investor Road Map 2012 (IRM 2012) was developed in collaboration with a United States Agency for International Development (USAID) funded institution, the Southern Africa Trade Hub (SATH) based in Botswana. It is an analytical synopsis of the legislative, procedural and regulatory challenges that impact on Doing Business in Swaziland, for both local and foreign investors.
IRM STRATEGIC OBJECTIVES
Objective 1: Efficient Trading Across Borders
Objective 2: Expedite Commercial Cases - More courtrooms and judges - Electronic Case Management Systems
Objective 3: Company Registration
Objective 4: Registering Property
Objective 5: Investor Protection - Improving Corporate Accountability
Objective 6: Paying Taxes - Systems, Time, Cost and Incentives
Objective 7: Closing a Business
Objective 8: Capital Markets
Objective 9: Mining Sector Procedures - Improve on Application Processing
Objective 10: Health & Labour Inspections
Objective 11: Industry Skills - Human Capital Development
Objective 12: Local Empowerment & Finance
Objective 13: Quality & Standards - Exporting more Swazi products
Objective 14: Public-Private Collaboration
Objective 15: Utility Costs & Response Time - Fast-Track Thermal Power Station - Fast-Track Communications Bill - Expand Water Treatment plants & Water Harvesting
Objective 16: Improved Public Service Delivery - Improved Productivity & Efficiency - Advocacy Campaign - Public Service Awards - Name Tags - Customer Service Toll Free Line - Ministries Service Charters
Objective 17: Information Dissemination on Swaziland - Development of Government Communication Strategy - Media Exposure and marketing of Swaziland -Training of Swazi Embassies Abroad
Over the coming weeks, we shall be focusing on individual objectives as we try to get our business community and readers informed about the improvements, both planned and those already delivered. We also do look forward to securing your inputs on some of the areas covered, as you experience first hand the improvements and/or challenges of doing business in Swaziland.
In this article, over and above detailing the key objectives, we shall also look at Objective 1 of the Investor Road Map 2012; being Efficient Trading Across Borders, with the aim of understanding what the objective means and what it seeks to achieve.
TRADING ACROSS BORDERS
The issue of efficiently trading across borders cannot be underestimated for any economy, as countries seek to maximise exports and foreign exchange earnings. Companies within the domestic economy produce products which are destined to markets beyond Swaziland’s borders. Limited resources and raw material availability further increase reliance of companies on imported inputs.
The issue of Trading Across Borders is, however, a difficult one for nations to handle, as one cannot change the geography nor improve the efficiency and cooperation of the neighbours. The above applies even more to Swaziland, being a landlocked country, which relies on external ports and borders for exporting products out of its territory into regional and international markets.
This scenario is further exacerbated by a limited domestic market, which forces Swaziland to seek external markets for its producers and focus on the attraction of labour intensive industries. These investments and investors are seeking for efficiencies and tend to be highly fleeting, never committing to any single location but always seeking advantages like low cost production and labour costs.
Nevertheless, countries have policy instruments at hand to maximise on the benefits of these investments. Thus, our first objective under the Investor Road Map 2012 is to make sure that Swaziland improves on the key issues relating to trading across borders. If we are to be truly a location for manufacturing and other value added investments, we must be a location that allows producers to bring in raw materials efficiently, convert them to finished products and get them to market efficiently.
Under this main objective are a number of targets and action plans;
1.1 Number of Imports and Export documents reduced from 11 and nine to six and five respectively by Dec 2012 - Situation analysis report and action plan produced
1.2 Length of time for Export and Import reduced from 21 and 33 to 10 and 15 days respectively by Dec 2012 - One Stop Declaration Point Introduced - VAT refund system operational - Fully operational ASYCUDA, and electronic trade data interchange with neighbouring countries’ border systems - Action plan produced for business customs forum to engage regularly - Electronic declarations fully operational
1.3 Export and Import cost reduced from US$1855 and US$2030 (per container) to US$927 and $1015 respectively by Dec 2012
1.4 Sixty Percent (60%) cross border traders confirm reduction in other non-tariff barriers by Dec 2012 - Conduct one national awareness campaigns on the online reporting & monitoring systems for Non-Tariff Barriers for TFTA covering the four regions - Conduct two radio programmes on NTBS - National Trade Policy drafted and submitted to Cabinet - All certificates of origin issued by SRA
As part of the improvement processes, the Swaziland Revenue Authority (SRA), in collaboration with the World Bank, has finished the Time Release Study that was focusing on some of our main borders, including Ngwenya, Lavumisa and Lomahasha, with the aim of understanding the time and processes at our borders to help improve cross border times and processes.
The outcome of the study will inform further improvements and already some positive developments have been witnessed like the introduction of an express counter at the Ngwenya border post for clients with fewer documents. With these actions, it is expected that traders, exporters and importers will benefit through improved turnaround times and costs at the points of entry.