Industrial Policy Ambition Paper for Swaziland

Topics: Industry, International trade, Economics Pages: 9 (2252 words) Published: June 21, 2011
Swaziland Industrial Development Policy -An Ambition Paper Submitted to the Southern African Customs Union (SACU) for development of SACU Industrial Policy Framework


The growth of the Swaziland economy is to a large extent dependant on the performance of the manufacturing sector which accounts for approximately more than 35 per cent percent of Gross Domestic Product. It is a commonly shared view that industrial development is an engine for economic growth and development. In Swaziland industrial production is heavily concentrated in a few and the bulk of exports are controlled by a handful of companies.

Developments in the international arena have posed a serious challenge to our ability to develop the industrial sector due to increase in competition for investments, trade liberalization and the global economic crisis. Several initiatives undertaken to support the industrial development have been undermined largely by lack of a policy that will provide a planned guiding framework. Therefore, to meet the challenges presented by the developments in the international arena, there is urgent need to formulate an appropriate and effective National Industrial Development Policy and Strategy whose objective will be to set the course for diversification and reinvigorated growth of the industrial sector of Swaziland.


Swaziland’s goal of industrialization is derived from the National Development Strategy (NDS). The NDS recognizes the significance to diversify away from agriculture into industry and services, as well as from the narrow range of non-agricultural activities into broader spectrum, in order to improve and reduce the overall economic risk, raise the degree of resilience in the economy and raise the capability of the economy to sustain its operations. Identifying feasible areas for industrial development is viewed imperative. Maximization of value added on agricultural and mining products, promoting services sector and promoting sectors with strong backward and forward linkages are viewed as significant elements.

The Government of Swaziland seeks to create a dynamic export oriented industrial sector characterized by technological innovation, value addition, diversification and strong external competitiveness with backward and forward linkages complemented by import substitution in small scale operations. Swaziland envisages a fully integrated industrial sector that can effectively compete in the international markets. Swaziland recognizes the role played by the private sector in its economic development particularly the productive sectors hence the Government only assumes the facilitator role.

Swaziland seeks to pursue and achieve external competitiveness through the promotion of industrialization in conformity with the country’s comparative advantage. Since Swaziland’s economy is agriculture based, its competitiveness is anchored on industries that have strong agricultural and local resources linkages. Hence it is Swaziland’s desire to promote diversification and commercialization of the agricultural sector thus encouraging further processing and value addition. In this regard, Swaziland’s industrial development objective focuses on the promotion of labour-intensive, natural resource-based, export oriented and high value added industries.

Swaziland has a small domestic market in terms of both population size and purchasing power. Consequently, development efforts have to be concentrated on export oriented activities with emphasis on agro-based activities and other manufacturing sectors on which Swaziland has both comparative and competitive advantages. Given the low levels of Foreign Direct Investment (FDI), constraints in accessing credit and capital and stiff competition in the world markets, restructuring and protection of certain industries is inevitable. Swaziland views protection as a supportive measure to nurture and grow infant...
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