New law allows ownership of businesses to be challenged

A new law passed by parliament gives Swazis the power to challenge foreign ownership of small and medium businesses. "The policy gives the SME [Small and Medium Enterprise] unit director the power not to allow foreign investors to set up small businesses that could otherwise by run by local SMEs," Enterprise and Employment Minister Lutfo Dlamini noted. Addressing a group of aspiring Swazi business owners, Dlamini said, "In the event of a complaint from the public, pertaining to foreign people running businesses, the [SME Unit] director has the power to ... [intervene] even if the business is in operation." Observers say the law seems at odds with the government's efforts to attract foreign direct investment in the face of rising unemployment and deepening poverty. However, Dlamini pointed out that only specific types of small businesses were targeted for Swazi ownership under the new law, such as grocery shops, mini-supermarkets, restaurants, small convenience stores, radio and cellular phone shops, and small clothing outlets. "There is no shortage of Swazis capable of running such businesses: the problem is a lack of capital for start-up operations," said a source with the Swaziland Chamber of Commerce. Swazis can now file a complaint with the government agency over foreign ownership of designated small businesses; the owner will be encouraged to go into partnership with a Swazi. "In the event that a Swazi business person wants to venture into partnership with a person from outside the country, this is allowed, because we cannot run away from the fact that many foreign business people are able to provide capital to start businesses," Dlamini said. One Indian national who runs a cellphone sales operation in the central commercial town of Manzini told IRIN he was not worried about the possibility of the new policy forcing him out of business. "Only if a Swazi can prove he can provide the service that I can provide, or can be a competent partner with me, can I be moved out," he said. "No Swazi has asked me about starting a business like mine or doing it with me."