Why investing in Swaziland is too risky?



BY : ZWELI MARTIN DLAMINI

JOHANNESBURG: Political stability and the rule of law are some of the major factors that attract Foreign Direct Investment (FDI), but why Swaziland struggles to attract FDIs with its government claiming the country is peaceful with an independent Judiciary. Despite the known challenges in the Ease of Doing Business, the country is faced with a huge challenge, the royal family’s ambitions to own shares in major companies in the Kingdom of eSwatini.

It is worth noting that the country is ruled by an absolute Monarch whose word is final and the government can decide to shut down any company as the per the instruction of the King thus compromising major investments. We have seen major companies closing down due to serious disagreements between the investors and the King and this include the now defunct Salgaoga Ngwenya Mine whose Director Shanmuga Rethenam was just told to stop operating. At first the investor was treated like a King, escorted by State police and the intention was to make him felt confortable while strategies were being considered to con him his millions.

It is my observation that the investor was treated unfairly and the subsequent revelations that the King was loaned R10million by the company that he later refused to pay should be an eye opener to those who want to invest in the country. The country is governed like an individual’s farm where the owner commands absolute authority over anything within the premises. It was wrong for the King, whose integrity should be beyond reproach, to borrow R10million from the investor and later abuse his powers to frustrate him by closing his company. The investor was later slapped with questionable criminal charges after he demanded his money back and one wonders if serious investors will ever trust this country. Reports subsequently emerged that the investor who, at first thought he was dealing with credible people was tricked into buying a jet for the King and later, he was pushed out of the country. This is the same jet that government told the public it was donated to the King as a birthday gift by an unknown donor and one wonders why the country operates like a “mafia” and expect international community to take it seriously.

The much-publicized lawsuit involving the investor and the King over the jet exposed that actually, it is too risky for international investors to consider Swaziland (now eSwatini) for major investments as their companies might be closed anytime. The unfortunate situation in the country has been promoted by the lack of democracy hence the Judiciary cannot independently preside over cases of this nature especially where the King is involved. As the situation stands, the King appoints Judges and they will always do anything not to upset him to serve their jobs. On the other hand, the King wants to own shares in almost all the major companies yet according to the Constitution he cannot be sued, this comprise the independence of the judiciary thus becoming a hindrance to the promotion of FDIs. In a normal democratic dispensation, even the President can be taken to court to justify his decisions, however in the Kingdom of eSwatini, the King’s word is final and no court can review or set his decisions. In this regard, investors should understand that under the current political system, their investments are not safe because the Head of State can just wake up in the morning and show them the exist door.

Then the question is, how can the country attract meaningful investments with the King having absolute powers to close any company? Many investors have become victims of the political system in the Kingdom of eSwatini and its high time we warn them of what is happening there so that they can invest in their own risk. What befell the Malaysian investor who was conned his money and made to buy a jet for King Mswati only to be dumped like a used condom should be a lesson for those who wants to invest their money in Swaziland. The fact of the matter is that Swazis are desperate for jobs and investors could come with solutions to the challenges of high unemployment but at least they should know the facts before investing their money in that tiny Kingdom. It’s true, no political instability in the country but this cannot be interpreted as peace, its silence influenced by dictatorship where those who challenge the government are arrested, tortured or even killed. The media is not allowed to report anything that might upset the King or portray government in bad light hence it’s hard for investors to get a true picture of what is happening in that country.

Now more companies are closing down and the media is only focusing on other factors like the unavailability of markets, we are not told about how the political system that gives absolute powers to the King undermine FDI. The Swaziland Investment and Promotion Authority (SIPA) might have good strategies to attract FDI but the question is, what will happen once those investors arrive in the country. Apart from the fact that the royal family demands shares from investors, reports suggests that once they cross the line of the Monarch their companies risk being closed. Furthermore, the country has a documented history of undermining workers rights and establishing laws that seeks to suppress the working class; most investors want to operate in a country with a clean human rights record. The Swazi media has been reporting that the King secured investors almost every time he went on a trip abroad and one wonders what happened to those investors. When will the propaganda stop so that we can start focusing on the real issues that affect this country thus undermining development? It will take years for the country to attract meaningful investments because the political system undermines the rule of law, human rights and it lacks a legal framework that promotes transparency, openness and good governance.