The sugar industry remains key to the Eswatini economy, accounting for approximately 6% of the country’s gross domestic product (GDP). Former CEO of the regulatory body, Dr. Phil Mnisi notes that the sugar industry is the largest non-government employer in Eswatini.
By Ntokozo Nkambule
The Eswatini Sugar Association (ESA) has recorded revenue of E5, 76 billion for the financial year ended 31 March 2022. This is a decline considering that the association had reported revenue of E6, 10 billion the previous financial year.
The group in its Integrated Annual Report, 2021/22 notes that the reason behind the decrease in group revenue is due to a drop in sales volumes and foreign exchange rates. “The decrease in revenue is mainly attributable to a decrease in sales volumes and foreign exchange rates, even though the selling prices were better compared with the previous year. The cost of sales decreased from E5, 92 billion to E5, 66 billion in line with the decrease in distributable proceeds”
ESA former Chief Executive Officer (CEO), Dr. Phil Mnisi who was at the helm during the financial reporting period states that all profits generated are distributed in full to the millers and growers and form part of the cost of sales. Distribution costs incurred during the year were E17, 2 million (2021: E13, 8 million), increasing marginally compared with the previous year.
ESA is the regulatory body for the sugar industry in the Kingdom of Eswatini (Eswatini) and brings together 493 sugarcane growers and three millers. The association is mandated by the Eswatini Sugar Act of 1967, to develop and regulate the industry, ii) market and sell sugar and its by-products (currently molasses), and iii) ensure the sustainability of the country’s sugar industry and contribute to the national economy.
Furthermore, the Integrated Report notes that foreign exchange gains of E64, 1 million were realized, compared to a gain of E26, 3 million the previous year. The regulatory organization observes that this is due to the cover with a better rate than was taken in the previous year. On the other hand, Interest paid decreased from E87, 2 million to E75, 4 million due to decreased production levels, as well as good capital management compared with the previous year.
According to Mnisi, the sugar industry is pivotal for the local economy. “The sugar industry remains key to the Eswatini economy, accounting for approximately 6% of the country’s gross domestic product (GDP) with the cane growing and sugar milling components contributing substantially to the agriculture and manufacturing sectors, respectively. The sugar industry is also the largest non-government employer in Eswatini” he asserts.
The ESA operates in a number of markets which include, the USA, COMESA, SADC, EU, UK, SACU, and other World Markets. SACU remains the Association’s primary market, comprising Botswana, Eswatini, Lesotho, Namibia, and South Africa.