Eswatini's Sugarcane Industry - A Taste of Opportunity

Updated: Jun 25

By Kenstonia Edende

Strategically located in Southern Africa but seemingly squeezed in between South Africa and Mozambique lies the nation called Eswatini - the last remaining monarchy in Africa. Ruled by an actual King and Queen Mother, the Kingdom of Eswatini (formerly known as Swaziland) is one of the smallest countries in Africa with a population of just over 1.2 million. Well known for its cultural spectacles and wildlife, it is more popular as a tourist attraction, with little focus on its economic potential. However, Eswatini is not only a land of royalty and culture - but it is also a land of...sugar.

Eswatini's sugar cane industry is the largest in the country, with raw sugar being its main export commodity. According to the Eswatini Sugar Association, the industry generates approximately $400 million a year in revenue, and Eswatini currently ranks as the 4th largest producer of sugar in Africa. In addition, a 2019 report highlighted that more than 20,000 workers are employed by the sugar industry, which accounts for over 50% of the Kingdom's total agricultural output. It goes without saying that the fear of sugar running out is non-existent in the Kingdom.

Sugarcane in Eswatini is traditionally grown in the rural landscape situated at a low altitude (elevation under 2,000 feet above sea level). Nonetheless, data from Knoema showed the industry has been growing at an annual rate of 3% with sugarcane production reaching 6 million tonnes in 2019 from 1.43 million tonnes in 1969. In 2019, the projected sugarcane production had to be revised upwards as cane yields were higher than expected. This is primarily due to factors such as adequate rainfall, as well as an increase in cane yields and growth area planted. Nonetheless, the room for improvement is large enough to accommodate significant investment.

Growth Prospects

Due to the country's small size, it is mainly dependent on trade with its neighbouring giants, with South Africa alone accounting for over 90% of its total imports and 75% of its total exports. It is generally able to reach regional markets without hassle, due to its strategic location. However, the government has been seeking foreign investment in the country to drive economic development. First, through the establishment of the Eswatini Investment Promotion Authority, which has primary objectives to promote and facilitate investment as well as provide information and support to investors. Then in 2015, King Mswati III introduced a project named Vision 2022, with aims to foster economic growth, drive investment in several sectors and make the country an industrial haven. These efforts are proving to be beneficial as FDI flow to the country increased from $36 million in 2018 to $130 million in 2019, a 261% increase according to the UNCTAD's World Investment Report 2020. As the sugar industry poses great potential for expansion, investment in sugar production is one of the most encouraged by the Eswatini Investment Promotion Authority.

As is typical with the agricultural sector, rainfall variations have a significant effect on production. Hence the growth in sugarcane production is directly correlated with the need for investment in more dams and irrigation systems. On the other hand, opportunities exist in sugar processing as the nation exports almost as much sugar as it produces. As a result, there are commercial opportunities for value-added products containing sugar, such as rum (made from fresh sugarcane juice) and candy. Therefore, with access to the more intricate details of this industry, exploring these opportunities can be profitable.

Undoubtedly, opportunities in the sugar industry in Eswatini abound and can be harnessed not only to yield profitable returns, but also to contribute to the country's economic development as a whole. And yes, clearly there is more to the land of Eswatini than royal weddings, fabulous festivals and rhinos.