Senator Obed Dlamini
The sugar Industry plays a crucial in the Swazi economy because its size and performance
have a significant impact, both directly and indirectly, on the rest of the economy. As
background to understanding its importance and relationship to the rest of the economy,
its historical development and current profile will be outlined. At the same time, events
occurring elsewhere in the economy, particular national socio-economic process, have an
impact on the Sugar Industry. It will therefore, be useful to highlight theses events in
Because the Swazi economy is very open, it is subject to influences emanating from the
rest of the world. Thus, to place the performance of the Sugar Industry in a fuller
perspective, it is necessary to highlight these influences.
HISTORY AND PROFILE
The history of the sugar Industry dates back to the mid-fifties when commercial sugarcane
growing resulted in the establishment of a small mill at Big Bend (in the south-eastern
part of the country). This was replaced by a larger mill in 1960. That year also saw the
establishment of a second mill at Mhlume in the northern lowveld. At that time, total
sugar production was approximately 57 000 tonnes.
In 1980, a third mill was established at Simunye (approximately 30 Kilometers south of
Mhlume). This pushed total sugar production to above 300 000 tonnes. By the end of the
1997/98 season, total sugar production stood at 475 727 tonnes. The mills at Big Bend,
Mhlume and Simunye have developed sugar growing estates to ensure adequate throughput.
The year 1962 saw the entry of small scale Swazi growers at Vuvulane through the
assistance of the Commonwealth Development Corporation. They now number about 270 and
deliver their cane to the Mhlume mill. Other small scale sugar growing schemes have
developed in recent years as opportunities for generating better incomes becomes more
apparent. The Industry has encouraged the small growers by creating special sucrose quotas
and has considerable technical and financial assistance provided by the three mills.
As the Industry expanded over the years, so did its contribution and influence on economic
activities elsewhere in the country. These contributions will be discussed in terms of two
topics - namely, output and employment, and then social services and corporate
OUTPUT AND EMPLOYMENT
The Sugar Industry comprises sugarcane growing and sugarcane manufacturing. In terms of
national income accounting, the former is classified as an agricultural activity whereas
the latter is classified as an industrial activity. These classifieds can be used as a
framework for assessing the size of the sugar industry in relation to the rest of the
Over the period 1995-96, sugarcane growing contributed 53% to total agricultural output
and 34% to total agricultural wage employment. During the same period, sugarcane milling
contributed 37% to total manufacturing output and 22% to total manufacturing wage
employment. In addition to these direct contributions, the Sugar Industry has promoted
indirectly other activities in both the formal and informal sectors. The formal activities
span all sectors of the economy. The informal activities include sugar sales, fruit and
vegetable retailing, sewing and knitting household utensil repairs, woodwork, metal work,
general trading, etc.
Industry contributions to total exports and tax revenues are a direct result of the
generated output and employment. Over the period 1990-96, sugar exports comprised 22% of
total exports. Contributions to public revenues in the form of company tax, sugar levy,
sales tax and personal income tax from employees makes the Sugar Industry by far the
largest contributor to the fiscus. When this is taken together with the savings associated
with those social services provided by the industry which would otherwise have had to be
provided by government, it makes the total contributions enormously important for the
country. The corollary to this is that an adverse change in any aspect of the Industry
will have significant negative impact on the rest of the economy.
SOCIAL SERVICES AND CORPORATE RESPONSIBILITY
The Industry is actively involved in the provision of social services - namely, medical
care, education, housing, water and recreation. Medical care is provided through clinics
and hospitals at heavily subsidised prices. Education is provided not only through
pre-schools, primary schools and secondary schools, but also through scholarships tenable
at the tertiary level. This raises the actual direct output and employment contributions
of the sugar industry beyond those indicated above.
The industry always responds quickly and significantly to normal disasters. This was
demonstrated by enormous contributions to help local communities in the wake of the
devastation by Cyclone Domoina in 1984 and the debilitating drought experienced in
1992-94. The sugar industry also contributed to the rebuilding of some of the schools
whose roof-tops were blown away by storms during the early part of 1998.
Scholarships for training Swazis mainly at the tertiary level of education amounted to
E254 000 during the year ended March 1998.
One important national process involves the Constitutional Review Commission (CRC) during
1977, the CRC completed its first phase which comprised the distribution of a booklet on
the current constitutional dispensation. It also started on its next phase which involves
The Economic and Social Reform Agenda (ESRA) was officially launched by the Prime Minister
in February 1997 and was implemented during the year. Its primary objective is to
revitalise the economy, which has shown little growth over the past few years. This is to
be achieved through the provision of an enabling environment (including good economic,
management, improved infrastructure and rule of law) within which the private sector is
expected to act as the engine of growth. One of the important components of ESRA is the
Public Sector Management Programme (PSMP). A number of management audits and workshops
were held in 1997/98 under the PSMP.
The process of compiling the National Development Strategy (NDS) was completed in August
1997. This was marked by the production of a document which had the support of all the
national stakeholders involved in its compilation. The stakeholders came from a wide cross
section of the Swazi economy and community. The NDS contains a vision for the country to
be achieved over the next twenty five years and the strategies for achieving that vision.
The vision (known as vision 2022) is stated as follows:
" By the year 2022 the Kingdom of Swaziland will be in the top 10% of the medium
human development group of countries founded on sustainable economic development, social
justice and political Stability".
INTERNATIONAL AND REGIONAL EVENTS
World output is estimated to have grown by an average of 4.5% in 1997 (with output growth
in Sub-Saharan African estimated to have grown by an average of 7.8%. These are the
strongest expansion rates recorded in a decade. The economic expansion was underpinned by
low inflation rates in more developed economies estimated at an average of 2.5% and
relatively high but declining inflation in less developed countries.
The South African economy (Swaziland's largest trading partner) performed less well than
expected in 1997. This has meant that demand for Swazi exports has been adversely
affected. The poor performance of the South African economy was partly due to the poor
performance of the gold industry and manufacturing particularly during the last quarter of
The membership of the South African Development Community (SADC) increased from twelve to
fourteen in 1997 as a result of the accession by the Democratic republic of Congo and
Seychelles. The ratification of the SADC Trade Protocol is, however, still awaited from
the required proportion of the members.
Negotiations between South Africa (SA) and the European Union (EU) on a trade and
development pact proceeded during 1997. The smaller partners in the Southern African
Customs Union (SACU) have been following these negotiations closely because their outcome
will have significant implications for their own economies. In these negotiations, sugar
is to be subject of special treatment because of the distortions existing in the various
markets. The SA-EU negotiations have, in turn, contributed to the delay in reaching
finality on negotiations among the SACU partners for a new agreement.
Discussions on the Lubombo Spatial Development (SDI) initiative continued during 1997. The
SDI is a corridor linking the kwaZulu/Natal Province of South Africa, Lubombo Region in
Swaziland, Southern Mozambique and Mpumalanga Province in South Africa. The Swazi Sugar
Industry forms a belt stretching from the south to the north of Swaziland through the
Lubombo SDI. As such, it is well positioned not only to contribute meaningfully to the
SDI, but also to benefit significantly from it. In March 1998 SASA and SSA signed an
important agreement which harmonies sugar trading between Swaziland and south Africa. We
welcome such a move.
I wish to record my appreciation for the cooperation I have received from the members of
Council during the year. In addition, I wish to express my appreciation for the good work
performed by the management of Swaziland Sugar Association. In particular I wish to thank
Mr. Andrew Clhoun for his contribution as a General Manager of the Association. Taking
over from Andy is Dr Mike Matsebula. He is the first Swazi to do this job. We look forward
to working with him and wish him success for the future.