1998 SOUTHERN AFRICA ECONOMIC ... - National Treasury

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S WA Z I L A N D The Lubombo Spatial Development Initiative The Lubombo Spatial Development Initiative (SDI),adjoining the M aputo development corr i d o r, is a partnership of the G overnments of Swaziland,South Africa and Mozambique and is expected to provide the necessary growth stimulus to the Lubombo are a . The main focal points include areas such as the Maputo Prov i n c e in Mozambique, the north-eastern parts of Kwa-Zulu Natal in South Africa and eastern Swaziland.The development initiative will open up unique opportunities to vast stretches of coastline (about 350km), w i l d l i fe covering over 300,000 ha of game re s e rves and significant agricultural deve l o p m e n t .The Lubombo SDI is viewed as complementing the Maputo corr i d o r, t h e re by c reating an exceptional investment zone. T h e re are plans to upgrade roads joining Richards Bay in South Africa and Map u t o ; and on the other hand, to improve the current N2 linking R i c h a rds Bay and Lavumisa/Namacha/Goba in Swaziland to accommodate future traffic vo l u m e. A number of transitional tourism projects offering integrated w i l d l i fe experiences are curre n t ly being developed in areas such as Nduma (joining Te m b e, F u t h i , Usuthu George and cove r i n g w i l d l i fe in all three countries), L av u m i s a - Po n gola project with o p p o rtunities for re c reation and leisure activities, Ko s i B ay / Ponto Do Ouro project offering opportunities for beach re s o rts and marina, and Hlane/Mlawula W i l d l i fe Zone. A l s o, various national projects have been deve l o p e d .T h e s e include the Greater St Lucia Wetland Park (South A f r i c a ) ,L a ke S i b ayi (South Africa) and nu m e rous others involving Swaziland and Mozambique. G overnments from all three countries have created SDI s t r u c t u res to co-ordinate overall activities pertaining to the Lubombo SDI. In order to accelerate participation by private i nvestors and the forging of strategic links with the public sector, priority has been given to an improved investment climate and the streamlining of investment pro c e d u re s . P r i v a t i s a t i o n The task of privatisation in Swaziland seems less daunting than in other SADC countries, due to the modest size of public ow n e r s h i p. In total, some 25 enterprises are either fully or m a j o r i t y - owned by gove r n m e n t , with a minority interest in some smaller companies. The process has been commenced by the commercialisation of Swaziland Railw ay s , and the restructuring of the Swaziland D evelopment and Savings Bank.The monopoly status granted to the Swaziland Royal Insurance Corporation will also be lifted, and the process of acquiring a strategic partner for the national a i r l i n e, R oyal Swazi A i r w ays has been ongoing for some time. F u rt h e r m o re, the restructuring of the Swaziland Post and Te l e c o m munications Corporation, a parastatal established in 1 9 8 6 ,is on the card s .It is believed that the company will be split into a holding company with rights over the entire netwo r k s y s t e m ,and an operating company, which should be re s p o n s i b l e for providing serv i c e s .A dd i t i o n a l ly, p rovision will be made for a strategic partner to acquire a minority stake, including possibly the issue of a cellular license. The government has created a special monitoring unit, k n ow n as the Public Enterprises Unit, to evaluate the performance of specific enterprises, and to pre p a re them for commerc i a l i s a t i o n or privatisation.The stipulated enterprises are re q u i red by law to submit quart e r ly financial re p o rts to the unit, w i t h recommendation sent for sanctioning by the Cabinet. I N V E S T M E N T C L I M A T E I nvestment incentive s Highlights of the incentives include: The five - year tax exemption for new manufacturing companies i nvo l ved in exports has since been phased out. N ew tax re fo r m s ,to be implemented soon, a re aimed at reducing the l evel of corporate tax from 37.5 percent to 30 percent leading to 25 percent in the medium term. F u rther tax incentives are p re s e n t ly being considere d . An employee training programme allows for expenses incurre d in training personnel to be deducted for tax purposes. Assessed losses may be carried fo r w a rd and offset against future p ro f i t s . An initial depreciation allowance of up to 50 percent on plant and machinery may be claimed in the first year or spread ove r s everal ye a r s . A 10 percent local pre fe rence on public tenders is allowe d . An allowance is granted for the cost of building houses fo r e m p l oye e s . Business sites for industrial operations are available from the M i n i s t ry of Enterprise and Employment and Swaziland Industrial D evelopment Company (SIDC). O n going expansion of the M a t s apha Industrial and other sites is being carried out along with the upgrading of the country ’s infrastructure. E x p o rt In c e n t i ve s The Central Bank operates an Export Credit Guarantee Scheme established in 1991.The scheme includes pre- and postshipment loans granted by commercial banks, which re c e i ve guarantee bonds from the scheme as risk cove r. Swaziland has decided not to adopt the export processing zones concept. As a Lomé Convention signatory Swaziland enjoys pre fe re n t i a l access to the EU for a wide range of pro d u c t s . Under the GSP, Swaziland also has access to other major markets such as USA, C a n a d a ,Australia and Jap a n . Swaziland is a member of SAC U, which provides for the fre e m ovement of goods between the member countries (Botsw a n a , L e s o t h o, N a m i b i a , South Africa and Swaziland). It is also a member of the regional organisations SADC and COMESA. Ta x a t i o n Corporate tax rate is 37.5 percent (will be reduced to 30 p e rcent during 1999). M a x i mum rate for individual tax is 39 perc e n t . Withholding tax is at 15 percent (12.5 percent within SAC U ) . Double taxation agreements exist with South A f r i c a ,M a u r i t i u s and the United Kingdom. Institutions Invo l ved in Investment Pro m o t i o n Swaziland Industrial Development Corporation (SIDC), a j o i n t ly - owned by the government of Swaziland and five international development finance institutions, is the principal d evelopment finance institution. Its chief activities, t h e re fo re, i nvo l ve the provision of long-term loans, equity financing, a s s e t l e a s i n g ,acquisition of industrial land and buildings, and prov i d i n g technical advice and guidance to both local and international i nve s t o r s . Some of the projects that are like ly to re c e i ve s u p p o rt from the institution include the manu f a c t u r i n g ,m i n i n g , a g ro - i n d u s t ry, t o u r i s m ,c o m m e rce and service sector. 88
S WA Z I L A N D The Ministry of Enterprise and Employ m e n t , launched SIPA (Swaziland Investment Promotion Authority) in April this ye a r. This is to be a one-stop facility and its primary functions include the promotion of tourism-related inve s t m e n t s ,m i n i n g ,e x p o rt - oriented and labour- i n t e n s i ve industries, and re s o u rc e - b a s e d s e c t o r s . It should also serve as a gatew ay to investors seeking to establish businesses in the country. T i b i yo is an investment promising entity established by the late King Sobhuza 11 for the Swazi Nation, which has interests in v i rt u a l ly all sectors of the ecomony. I nvestment Co d e An Investment Code, consisting of revised inve s t m e n t i n c e n t i ve s ,was developed and adopted during 1997. The code outlines investment regulations and incentive s . E x c h a n ge Co n t rols No restrictions are applied to payments within CMA. Dividends and profits are fre e ly repatriated from Swaziland subject to a 15 percent withholding tax. O u t w a rd transfers of c apital re q u i re Central Bank ap p rov a l . I n w a rd transfers should be re g i s t e red with the Central Bank, to facilitate possible future repatriation of cap i t a l . Companies that are more than 25 percent owned or contro l l e d outside the CMA re q u i re Central Bank ap p roval befo re taking up loans locally. Legal Protection of Inve s t m e n t As a signatory to MIGA, Swaziland guarantees against nationalisation and expropriation of private enterprise. I N V E S TM E N T O P P O R T U N I T I E S A N D P R O J E C T S O p p o rt u n i t i e s I nvestment opportunities in Swaziland are mainly found in the p rocessing of the country ’s natural re s o u rc e s ,both agricultural and mineral. Sugar is produced from the vast sugar cane p l a n t a t i o n s ,but it could also be used to manu f a c t u re sweets and c o n fe c t i o n a r i e s .To b a c c o, p i n e apple and vegetables are curre n t ly g rown and canned, but there is scope for further processing of these go o d s . Kaolin and limestone may be used to pro d u c e ceramic ware, p ap e r, pharmaceuticals and glass. Coal could be p rocessed to make chemicals, cement and fe rt i l i s e r s .T h e re are also favourable opportunities to further develop the country ’s tourism potential. P rojects for Potential Inve s t m e n t Ty p e P ro j e c t D e s c r i p t i o n A g r i c u l t u re Cattle farming (other live s t o c k :go a t s , Fe e d l o t i n g ,hides and skins, re n d e red fats, s h e e p, pigs have great potential) t a l l ow, m e a l ,h o r n . C o n s t r u c t i o n Electrical power systems Power grid “ i n t e rconnect” between Swaziland and Mozambique and also a fo u rt h feeder line from South Africa to complete an important link-up in the southern African regional power grid. Upgrading of the Matsapha airport A i r p o rt / G round Support Equipment wo u l d h ave to be supplied. M a nu f a c t u r i n g Various value added pro d u c t s P roduction of such products as sugar, citrus f r u i t ,and wo o d - p u l p. Various agro - related pro d u c t s Medical equipment S u g a r, animal fe e d ,cotton ginning, yarn and f a b r i c s ,p aper processing and pulp pro d u c t s and wood pro d u c t s . Tenders for supply of goods such as wheel chairs and physical therapy equipment S e rv i c e s Te l e c o m munication equipment and serv i c e s Establishing a Swaziland base station for cellular phones. Fo re s t ry A f fo restation and charc o a l R e s o u rce-based project aimed at producing an alternative source of energy utilizing the abundant wattle fo re s t . To u r i s m Hotel complex D evelop a prime plot located in the heart of M b a b a n e, and to incorporate shopping f a c i l i t i e s ,office and parking space. D evelop hotel in the Low veld for ecotourism, w a t e r s p o rts and game. Road netwo r k s M b a b a n e - N g we nya/Oshoek bord e r M a n k ay a n e - S i c u nu s a S o u rc e : SIDC (Swaziland Industrial Development Company ),<strong>1998</strong>. 89
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1998 SOUTHERN AFRICA ECONOMIC SUMMI
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CONTENTS I N D E X Abbreviations 2
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THE SADC FINANCE AND INVESTMENT SEC
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c u rre n t ly exists in SADC gover
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REGIONAL MAC RO-ECONOMIC HIGHLIGHTS
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Southern Africa and Competitive n e
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had agreed to accept the general fr
Page 15 and 16:
A NG OL A of GDP in 1996. E x p o r
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A NG OL A Projects for Possible Inv
Page 19 and 20:
A recent event in the political sce
Page 21 and 22: B O T S WA N A B OT S WANA STOCK MA
Page 23 and 24: B O T S WA N A P rotection of Inve
Page 25 and 26: scheduled for 23 May 1998. Eight po
Page 27 and 28: L E S O T H O The money market is d
Page 29 and 30: L E S O T H O L E S OT H O :P ROJEC
Page 31 and 32: p a r l i a m e n t a ry elections,
Page 33 and 34: M a l awi Stock Exchange The stock
Page 35 and 36: M A L AW I I nvestment Code The Inv
Page 37 and 38: M A L AW I S TAT I S T I C S(USDm u
Page 39 and 40: M au r i t i u s c o u n t ry is se
Page 41 and 42: M au r i t i u s Mauritian Investme
Page 43 and 44: M au r i t i u s Ta x a t i o n Tax
Page 45 and 46: c u rre n t ly holds 129 seats in P
Page 47 and 48: M O Z A M B IQ U E combined with a
Page 49 and 50: The current status of the project i
Page 51 and 52: M O Z A M B IQ U E dermersal fish f
Page 53 and 54: After talks between the South Afric
Page 55 and 56: N A M I B I A Namibia does not impo
Page 57 and 58: N A M I B I A I nvestment Code A c
Page 59 and 60: Johannesburg Stock Exchange. G E N
Page 61 and 62: S O U T H A F RI C A that some East
Page 63 and 64: S O U TH A F R I C A cities of Joha
Page 65 and 66: S O U TH A F R I C A INDUSTRIAL FIN
Page 67 and 68: S O U T H A F R I C A * M a c h i n
Page 69 and 70: p rocessing industries,t e x t i l
Page 71: S WA Z I L A N D Swaziland Stock Ma
Page 75 and 76: Snow capped peaks of Kilimanjaro. G
Page 77 and 78: TA N Z A N I A exchange rate, the s
Page 79 and 80: TA N Z A N I A S TATISTICS (USDm, u
Page 81 and 82: Z A M B I A the supply of water for
Page 83 and 84: Z A M B I A Fo reign Tr a d e Zambi
Page 85 and 86: Z A M B I A Other institutions incl
Page 87 and 88: Victoria Falls. G E N E R A L I N F
Page 89 and 90: Z I M BA BW E Z i m b a b we Stock
Page 91 and 92: Z I M BA BW E - No restrictions on
Page 93 and 94: LIST OF SOURCES S o u rces containi
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1998 SOUTHERN AFRICA ECONOMIC ... - National Treasury

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