After a decade studying and working in Australia, Swazi-born Roberto Russo had just been granted citizenship when he took a phone call from his father in Swaziland. The telephone conversation was to change his life’s trajectory overnight.
“I never thought of coming back to Swaziland. I was happy in Perth. But when my old man said to me he was thinking about selling the business I thought ‘what is the worst that can happen?’ I can always go back to Australia. I have not looked back,” says the 35-year-old Russo.
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The lay of the land for entrepreneurs in Swaziland and Australia are poles apart. Australia is an open democratic society with a large middle class customer base, government support for emerging businesses, and perched on the doorstep of Asia’s huge and burgeoning economies.
Swaziland is an undemocratic feudal society ruled by sub-Saharan Africa’s last absolute monarch, King Mswati III. It has a population of 1.3 million, the majority living in poverty, unemployed or practising subsistence agriculture, and a government actively favoring international and local corporations at the expense of small and medium enterprises.
To compound its reputation as an entrepreneurial backwater, Swaziland’s tentative claim to being a stepping stone between the economies of South Africa and Mozambique is wishful thinking at best.
In reality, the construction of world class road infrastructure between the industrial and business hubs of Johannesburg and the port city of Maputo has left Swaziland out of the loop. The South African city of Mbombela boomed at Swaziland’s expense by servicing the trade route.
Swaziland’s national economy is habitually mismanaged for the benefit of Mswati and his expansive royal household and was one of the factors resulting in the country flirting with a financial meltdown in the wake of the global recession in 2008. A lifeline of a $335-million loan from neighboring South Africa was refused as the fine print included political reforms. Financial oblivion was only averted after the Southern African Customs Union (SACU), discovered that Swaziland, as a customs union member, was eligible for an $88 million windfall in 2012 and it came with no strings attached.
The financial crisis was caused by a drop of more than 50% in SACU receipts as a consequence of the recession and squeezed Swaziland’s public sector wage bill that accounts for about 18% of the approximately $4 billion GDP – the highest ratio on the continent.
Russo was clearly looking through a different lens at the business opportunities that existed when he decided to return home in the midst of the country’s financial crisis and swing for the entrepreneurial fences. In the eight years since buying out his father, his businesses have grown eightfold to record a $10 million annual turnover. Russo’s stable includes a paint manufacturer, tool supplier and advertising firm.
Swaziland’s proximity to Mozambique has proved an advantage against Russo’s South African competitors.
“We export seven to eight tons of paint daily to Mozambique. Purely on geography we are able to load two trucks in the morning and make delivery and they are back by 5PM,” he says.
Sandwiched between two countries allows for different business strategies for each, while also benefitting from lower water, electricity and labor costs. Mozambique provides for bulk paint sales, while the South African market offers a niche that sidesteps the competition from South Africa’s thousands of paint manufacturers.
The company supplies specialized paints to a Johannesburg-based architectural firm, including insect repellant paint for malarial areas and paint that can be applied in wet weather.
“We are small enough to be able to custom-make our product to fit client needs… the bigger guys would ask ‘look, how big is the project?’ and it would not be worth their while,” he says.
“One of the downsides of being such a small, isolated country is that you get comfortable at what you are doing, even though you do it well. It’s important to attend tradeshows and ensure we remain current, to give us a competitive advantage.”
Technical staff recruitment can also be difficult.
“There is only a small pool of paint chemists that you can get hold of in southern Africa… but people are quite naive. People in South Africa think that Swaziland is a small little farm town. People that do know the lifestyle we live in Swaziland would come at the drop of hat.”
Swaziland’s formal economy is dominated by corporates, from telecoms to sugar producers. At its center, and controlled by King Mswati III and his coterie, is the opaque Tibiyo TakaNgwane, meaning  wealth of the nation, fund that has shares in many foreign and local corporates operating across diverse sectors.
Tibiyo was envisioned as a national empowerment vehicle and was established by Mswati’s father King Sobhuza II after independence in 1968. From its small beginnings, where every Swazi man was required to donate to it, usually a cow, the fund has grown to an estimated $2 billion. Like Mswati, whose personal fortune was put at $200 million by FORBES in 2008, the fund is exempt from tax, as well as civil and criminal scrutiny.
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The fund’s rapid expansion is attributed to many factors, including eviction of small-scale farmers without compensation to grab some of the country’s best agricultural lands for the fund’s sugar interests and the government’s favoritism for contracts, tenders and beneficial regulations to foreign and local corporates the fund has stakes in.
Swaziland has the trappings of a democracy, but is not recognized as one. Mswati and his royal household, government and the state have become all but indivisible.
A small business owner based in Manzini with an annual turnover of R10 million ($770,000), who declined to be identified, says “If you fly too high, you are going to come short if you come up against businesses with government interests.”
“The main driver of business in Swaziland is the government. Pretty much everyone is dependent or indirectly dependent on government,” he says.
Lynette Fraser, Russo’s 38-year-old sister, established her own water bottling business, Viva Beverages, through purifying municipal water using reverse osmosis. She sells about 100,000 500ml bottles monthly and is able to compete with her South African competitors through lower transport costs. There was a business spike recently for sales of her five liter water bottles, after the capital Mbabane experienced debilitating water shortages, where Matsapha did not.
In recent years, she says there is a growing number of entrepreneurs opening businesses, where in the past “a lot of people would go to Johannesburg because the opportunities are just so vast.”
Excluding sugar production, about 90% of Swaziland’s economic activity occurs in the Mbabane, Matsapha, Manzini corridor and entrepreneurs recognize the benefits of businesses being concentrated within easy reach of each other.
But government business involvement remains a debilitating factor. Founder and Managing Director of the internet service provider Real Image, Ali Resting, has wrestled with government for deregulation of the sector, especially a legislative clause giving Swaziland Posts and Telecommunications Corporation (SPTC) exclusive rights for importing bandwidth, resulting in hugely inflated and uncompetitive internet costs stifling investment.
“The first question investors ask is if connectivity is reasonably priced? …It does deter investors if they are spending huge amounts of money towards connectivity, when they shouldn’t have to,” says Resting.
Deregulation would not only act as a lure for companies to invest in Swaziland, it would also benefit connectivity in the region.
“There is an opportunity for Swaziland to become a transit location between Johannesburg, Durban and Mozambique by using it as a conduit for fiber infrastructure. If you can position yourselves to have the shortest route, because the internet is distance sensitive, it makes more sense to go through Swaziland… it’s a huge opportunity,” says Resting.
For entrepreneurs in Swaziland, opportunities seem to be limited to the government.

The Call  Of The African Kingdom

Africa, there is a growing trend of prosecuting former presidents, which is stiffening resistance to democratic transitions. It creates dictators who cling to power and impede fresh ideas.
The list is long. Zimbabwe’s Robert Mugabe, Equatorial Guineas’ Teodoro Obiang Nguema Mbasogo, Angola’s Jose Eduardo Dos Santos, Congo Republic’s Denis Sassou Nguesso, Uganda’s Yoweri Museveni and Swaziland’s King Mswati III. All have ruled for more than a quarter of a century.
<div id="attachment_2209" style="width: 215px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-2209" class="size-medium wp-image-2209" src="/wp-content/uploads/2017/04/Par1766006-205x300.jpg" alt="" width="205" height="300" />Zambia&#8217;s former president Frederick Chiluba gives the thumbs up outside the Magistrates Courts on Febrauary 15, 2008 in Lusaka after the court ruled today that Chiluba should face a corruption trial in May. Chiluba would have to show cause why he should not be convicted on charges of theft of public funds and abuse of office, prosecutor Mutembo Nchito told AFP after the ruling by Lusaka Magistrate Jones Chinyama.</div>
Political commentators say that some leaders who come from poor backgrounds are tempted to hang onto power for fear that poverty awaits in the unknown.
Zambia appears to be a dangerous country in which to step down from power. It is also the only country on the continent where nearly all of its ex-presidents have been investigated and prosecuted. The only exception was Levy Mwanawasa, who died in office.
This is a precedent that is worrying both democratically and economically for Zambia and its people.
Weaknesses in Zambia’s institutions have resulted in abuse of power and malpractice. Lack of enforcement by these institutions to bring culprits to book has also resulted in the embezzlement of coffers.
“The Zambian legislation has major constraints but our leaders don’t care and continuously use immunity to abuse office. What should happen is that the use of immunity should be detected and whoever is involved should be prosecuted. They should not wait until leaders vacate the office for charges to be brought against them,” says economist, Oliver Saasa.
Zambia, like many African nations, has suffered a dearth of democracy since gaining statehood. Independence leader Kenneth Kaunda created a one-party state, which took 27 years to overturn.
Kaunda was voted out in 1991. His successor, former labor leader Frederick Chiluba, left office voluntarily, though under a cloud, after being accused of corruption and abusing the political process. The next two presidents were members of Chiluba’s Movement for Multiparty Democracy, but in 2011 Michael Sata of the Patriotic Front (PF) defeated incumbent Rupiah Banda.
All these leaders have ruled with immunity, accessing treasury funds and misusing the country’s resources. This has led to the investigation and prosecution of the leaders. Commentators see only one way out.
“The best thing for Zambia will be if a head of state commits a transgression that the constitution does not support, then they must be impeached. Parliamentarians must be of moral high ground and should protect the constitution and not act on political alignments and impeach corrupt leaders,” says Saasa.
<div id="attachment_2210" style="width: 239px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-2210" class="size-medium wp-image-2210" src="/wp-content/uploads/2017/04/000_Was1065479-229x300.jpg" alt="" width="229" height="300" />Zambia&#8217;s President Levy Patrick Mwanawasa addresses the 62nd UN General Assembly at the United Nations, 26 September 2007. AFP PHOTO/Emmanuel DUNAND</div>
Sources in Zambia say elected leaders should be above board. People seeking presidency must be able to translate the constitution and use it well in leading a nation instead of using it to quell opposition. They say Zambian leaders should remember that no one is above the law.
After leaving office, Kaunda clashed frequently with Chiluba’s government. He planned to run against Chiluba in the 1996 presidential election, but withdrew after constitutional amendments were passed, rendering him ineligible. In 1997, Kaunda was arrested on charges of inciting an attempted coup. He was released six days later, but placed under house arrest until a court case in June 1998 in which all charges were withdrawn. Famously, he grew a white beard in protest against his incarceration.
From 2003 onwards, after his departure from the presidency, Chiluba was arrested and charged with corruption. Subsequent long-running trials were dogged by adjournments and procedural problems. In March 2013, Rupiah Banda was charged with abuse of power shortly after being stripped of immunity.
But what does the future hold for Zambia’s leaders?
The Sata government is increasingly using its powers for ill, in the way previous heads of state did, with opposition leaders arrested, youth meetings banned, political rallies blocked by riot police, allegations of judicial interference and ministerial corruption, smear campaigns in government media and lawsuits against journalists.
Opposition figures complain that Zambia’s leadership is dragging the country back to a one-party system. Saasa says that Zambia is deteriorating by the day and being run like a dictatorship.
“Zambia’s previous governments have failed to respect the rule of law, which is very dangerous to citizens, and it is clear from recent conduct that officials of the PF government regard themselves as above the law, which may lead to investigating the president and his officials after their end of rule,” says Saasa.
It is difficult to judge the legitimacy of any particular legal charge but so far, the government’s effort to bring corrupt leaders to face the law has led to few trials and convictions. Simply claiming an offense can inflict political and economic damage and discourage further public involvement.
“In our case, a bad piece of legislation has contributed to bad governance. Investors will not want to come and invest in a country where leaders don’t adhere to the rule of law. Economic and political stability is key and if the head of state is questionable in his leadership and dealings, investors will be jittery about investing in such a country; and Zambia is such a country right now. With these weak institutions it means that you are at war with your own citizens, regional bodies and trading blocs, as well as an  international community that includes donor agencies. This is not good for Zambia and it is causing a lot of problems,” says Saasa.
There has always been existential threat to the rule of law and judicial independence in Zambia, resulting in ruling with immunity. Recently the PF pledged to fill the judiciary with its members and Sata suspended three judges hearing a case involving the Post’s owner and editor, Fred Mmembe.
Wynter Kabimba, the justice minister, complained of a dictatorship of the judiciary which needed to be nipped in the bud. He even threatened to dissolve the judiciary.
“Zambian leaders have been tasked and trusted by the electorate to look after their resources but the leaders have used impunity to misuse such resources and for that they must face the law. I think what Zambians want is a more present system of an oversight. An oversight that is strong regardless of political alignment, one that can detect current leaders’ abuse of office. They must be given power and authority by the constitution to charge a seating president with malpractice,” says another political commentator who asked not to be named.
Laws must give oversight institutions, like the anti-corruption authority, power to detect, arrest and charge leaders involved in abuse of office and corruption. Zambia should start thinking of doing away with impunity because it will be the only way to deal with corrupt leaders. We must have a transparent system that is open and follows the rule of law.
Ironically, while candidate Sata campaigned against claims of past MMD corruption, he has impeded investigations of its own members. He insists that the Anti-Corruption Commission receives his permission to investigate cabinet members.
“Given this government’s established pattern of using violence and ethnic hate speech as a political strategy, we should be very concerned over what could happen next,” says Saasa.
Zambia is no dictatorship, but the trend is worrisome and goes beyond the tendency of all politicians everywhere to manipulate power to their advantage. Zambia’s leaders should peer into the future and resist the authoritarian tendency. All sides should agree to circumscribe powers which can be abused by any party in power. Otherwise the future for Zambia could be very bleak indeed.

Tag: King Mswati III

FORBES AFRICA SOCIAL MEDIA

The Call Of The African Kingdom

Power Comes Before A Fall