A report by the International Finance Corporation notes that the formal sector only employs 1 000 per year, yet 25 000 youths enter the labour market every year in Eswatini. The report suggests that an export-led growth model can help create jobs in the country.
By Avite Mbabazi
An export-led growth model to boost local Micro Small Medium Enterprises (MSMEs) and create much-needed private sector jobs is critical in alleviating unemployment in the country. This is according to a report titled Creating Markets in Eswatini compiled by the International Finance Corporation (IFC).
The IFC suggests that there is great potential to innovate and create more jobs in the private sector for the 25 000 young people who vie for only 1 000 jobs annually.
The IFC has stated that Swati entrepreneurs, if well supported, can play a crucial role in export-led private sector growth by capitalizing on the capacity to develop new goods and services brought by new technologies.
The IFC is a member of the World Bank and the World Bank Group and is the largest global development institution focused on the private sector in emerging markets.
Entrepreneurship is said to be an important driver of the domestic economy as jobs in the formal sector country are currently insufficient. According to the report by IFC published in September 2022, formal job creation in the country stands at just 1 000 jobs per year, yet 25,000 youths enter the labor market annually. This mismatch has therefore resulted in the country’s working-age population being largely employed either formally or informally in micro, small and medium enterprises (MSMEs).
Opportunities for export lie in a number of sectors including forestry where local producers can take advantage of the projected 52% growth in round wood demand in South Africa by 2030 as well as quality packaging to meet rising e-commerce shopping.
Moreover, with Eswatini Meat Industries Limited (EMI) being the only licensed exporter of beef, an opportunity to enter the market is afforded as Swazi beef exports still fall below the export quota to the European Union (EU) market where the country enjoys tariff-free access.
Eswatini, therefore, has a lot to gain in creating policies to address the specific constraints in managerial capabilities and access to finance that entrepreneurs face, particularly women and young people, as this would generate more jobs and increase productivity and wages.
For the success of the private sector, the IFC states that the reforms currently undertaken by the government must be completed and that the ongoing efforts to unbundle the Eswatini Postal & Telecommunications Corporation (EPTC) will allow increased private investment in the digital sector.
These reforms include the cabinet-approved state-owned enterprises(SOEs) restructuring to separate commercial activities from regulatory functions and close some SOEs to decrease their financial burden and improve operational performance.