In a significant move towards equitable economic development, stakeholders in the construction industry of Eswatini have made a strong call for increased transparency and local participation in the country’s construction industry.
This transpired during the Construction Industry Council (CIC) Stakeholders Forum at Hilton Garden Inn yesterday. The forum brought together various stakeholders, including lawmakers and industry representatives who highlighted the challenges faced by local construction firms, which are often sidelined by larger, foreign-owned companies—a situation colloquially referred to as the “construction mafia.” This term was used to describe the alleged monopolistic practices that prevent smaller, emerging companies from entering the industry and thriving.
The event had a panel discussion whose panelists were, Thulani Mkhaliphi, the Principal Secretary in the Ministry of Public Works and Transport, Sandile Makhubu, the Board Chairperson of the CIC, and Maqhawe Mnisi, the CEO of CIC. Making her submission during the panel discussion, the Senate President, Lindiwe Dlamini, expressed concerns over the prevailing dominance of foreign companies in major construction projects and the potential negative impact this has on local businesses and the broader economy.
Dlamini’s speech underscored the necessity for joint ventures that would facilitate skill transfer and bolster the local economy, thereby ensuring that the benefits of large-scale construction projects are more widely distributed among emaSwati.
She also questioned the restrictive conditions often attached to international loans, which tend to favour foreign entities over local companies, suggesting that such terms undermine the value addition that these projects could bring to the local populace.
Echoing the President, a local contractor, Maselenkhundleni, raised concerns about the terms of the International loans for large construction projects, which specified that contractors and materials would come from abroad, raising questions about the fairness and long-term benefits for the citizens of Eswatini, who are ultimately responsible for repaying these loans through taxes. He made an example of two major ongoing projects in Eswatini—the construction of the new Parliament building and the Mpakeni Dam, stating that the terms of the loans secured for these projects sideline local contractors.
“Currently, the country has two major projects in the pipeline – the construction of the new parliament and the Mpakeni Dam. The terms of the loans taken for these projects specifically state that the contractors cannot be locals. This means emaSwati will have to repay the loan with interest through taxes, even though they are sidelined. This is unfair because emaSwati should be seeing value added from projects funded by their taxes. A portion of the taxes paid should be ploughed back into the nation to benefit emaSwati. With these projects, you ask yourself where is the value added, because at the end of the day, emaSwati are paying taxes without seeing the value added,” Maselenkhundleni said.
The call for action was clear: stakeholders urged the implementation of measures to level the playing field and foster an environment where Emaswati-owned businesses can compete effectively and thrive.
In response, the CIC CEO assured that they are working tirelessly as a council to meet the demands of the stakeholders. He said that they are currently in the process of engaging the Eswatini Competition Commission to try and work out working conditions that will favour local contractors, both large and small, to ensure that they all benefit from the local projects and contribute to the economy.
The Minister of Public Works and Transport, Chief Ndlaluhlaza Ndwandwe, emphasized the importance of open dialogue and collaboration within the industry to address these issues and find solutions that promote the growth and development of the local construction sector. He further encouraged stakeholders to participate in the review of statutes that affect their sector to ensure their grievances are attended to.
This collective stance represents a pivotal moment for Eswatini’s construction industry, as it seeks to empower local businesses and ensure that the nation’s economic growth is inclusive and beneficial to all Emaswati.