Senator Manqoba Khumalo: “We only have one country and one Africa”
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Senator Manqoba Khumalo: “We only have one country and one Africa”
We caught Eswatini Minister of Commerce, Industry and Trade Senator Manqoba Khumalo between the fourth event he had just attended and the fifth one he was running to. He had a choice between having lunch and giving us an interview. He chose to skip lunch and be grilled instead.
We have been to the United Nations Economic Commission for Africa (UNECA) Intergovernmental Committee Senior Officials and Experts of Southern Africa which discussed the issue of micro, small and medium enterprises (MSMEs) and you have just sat through a meeting meant to reward small and medium entrepreneurs. Why is this so important for Eswatini and you as commerce minister?
This is important for us because we have just rolled out a strategic roadmap centered on the idea that we have to be an export-trading country for obvious reasons. We are a small market and we are not yet an affluent country. So, for us to be able to realise the dream of becoming a first world country, it is important for small and medium enterprises to be at the forefront of this export-driven philosophy. So we are trying to build their capacity, access to finance and market linkages. The role of government is to facilitate that process for ease of doing business, in terms of getting a trading licence, getting an account open, paying taxes and getting electricity, water, etc. We are working hard to create an environment where entrepreneurs feel appreciated and are satisfied that they are the ones who are going to drive the fortunes of the country to the next level. When Foreign Direct Investment comes in, that’s great but investors repatriate the profit to their own countries. On the other hand, when the investment is local, then the money stays and circulates within the economy so it flips the coin and suddenly you are more in charge of your destiny.
I heard you say in your speech with a lot of humility that you are ashamed of the budget that you are allocating to the MSMEs. If these are so important, why is this not reflected in the budget?
We are a new government. The current budget we have was not informed by prior knowledge and we are cash-strapped as a country. A lot of countries in the region are going through the same predicament. That has made it difficult for us to allocate a big budget to MSMEs and to those sectors that would drive the enabling environment. Having been at the job 10 months, I am wiser, so I know now that the money in the previous budget does not reflect our priorities. So now I have to make sure that the kind of support to our MSMEs is consistent with the destination that we want to reach. Also, we are working hard as a government to fix our fiscal challenges and budget according to the criteria we have set up. Right now our hands are tied a bit because we may not like the way that resources have been allocated but we are limited in what we can do because we are just trying to make sure that salaries are paid and the lights kept on. We don’t want to be captive to that situation for too long. That’s why in the next budgeting cycle, you will see improvements in our budget allocations.
When you talk about ‘paying salaries’ and ‘keeping the light on’, I can’t help but ask you why you’re in such a situation for a country with so many resources such as gold, diamonds, asbestos, coal etc.
We are in the process of reviving our mining sector. Step one is to do prospecting using modern methods so we have an updated database of what minerals we have, where and how much. The data we have now is decades old and has proved unreliable. Secondly, we are revising our mining act and regulations to align with best practice regionally and globally. Thirdly, we will drive an aggressive investment promotion campaign in the sector, focused on beneficiation because we don’t want to just export raw minerals. We see the mining sector as one of the sectors that will improve the economy.
You have been minister of commerce for 10 months. Prior to that, you were a successful businessman, living in Ireland and you decided to come to Eswatini. Why?
I am Swazi, my parents are Swazi and I did my education in Eswatini. I got employed by one of the biggest companies in the world that was here – the Coca Cola company. Though the opportunities I was given were great, when you are called to serve your country, you cannot put a price tag on that. It was not about a job; it’s a calling.
It was quite literally a calling: the king called you and here you are.
Yes. You try to make a difference. Taking all the things you have learned and pouring your soul into trying to make a difference to your country.
You were not expecting to land this position, were you?
Not at all. In our culture, when His Majesty pronounces something related to you, it’s the highest honour you can have as a Swazi citizen and hopefully it will inspire others. We have a lot to contribute to the success of the country. We only have one country and one Africa. If our people, who are exposed to best-in-class systems, thinking and working environments, come and contribute in a small way, the effect of that will be great for Africa. As we pronounce the African Free Trade Area, the big question that will be asked, and I heard this in the World Economic Forum, is can we pull this off?
One reason I believe we can is that Africa has the right talent.
Although not always in Africa.
My point exactly. Once we create the right environment, that talent will be attracted back and will make a big difference. The level of interest that the African diaspora has in the free trade area and the E-trade platform that’s being launched to support the African Continental Free Trade Area (ACFTA) is just amazing. It’s about creating the right environment to make sure that Africa moves away from the days of war and internal squabbling to where Africa has good systems of trade and economic production to ever-higher levels and that will change the conversation about Africa.
Isn’t your optimism tempered by what is happening in Africa right now, particularly in South Africa?
I think it’s a challenge that the government and people of South Africa need to put in context. When you are thinking only about your sphere of influence and not about the big picture, it will discourage efforts. I think what they will discover is that as the rest of Africa reacts to what they are doing, they will then realise that maybe some of their assumptions were not properly tested and they will recalibrate and move towards a more pan-Africanist thinking. As long as we are not one, we cannot win.
Won’t the customs duties stand in the way?
The harmonisation of duties across Africa should be a well thought-out choice. No country should be worse off than they are now. As we make offers to each other, in terms of trade rules, duties and concessions, the principle is that no country should be worse off. If a commodity is significant for a country but you ask them to adopt a duty that negatively affects or even kills that industry, then you are killing the country. So there needs to be a gradual process to make sure that those sticking points are managed. And when a country is forced to forfeit an advantage, there needs to be a compensating measure.
Is it currently well managed?
Absolutely, because as countries ratify the ACFTA, one of the elements that countries look at is the elements working for them and those that are not. Some countries have positions on certain things. That is their right and it should be respected.
Mauritius has preferential trade agreements with several African countries and Eswatini is not one of them. Is there something in the pipeline?
Absolutely. It’s an amazing coincidence that a businessman from Mauritius, who is based in Eswatini, has just reached out to me to organise a trade mission to Mauritius including me and the Eswatini Trade Authority to start talking about those possibilities and look at how we can start trading more. Why not have a trade agreement? We have so many commonalities, such as sugar…
Sugar going to Mauritius or from Mauritius? Because we have an excess of sugar.
So do we. My thinking is different. We can create value chains around sugar. Maybe have a distillery for ethanol, based in one of our countries, to export to other African countries. It’s not about competing but complementing each other.
Director of UNECA Said Adejumobi called out some governments for “feeding the overfed” instead of helping MSMEs. Do you think government should legislate so that big business lends a helping hands to MSMEs? Is there such legislation in Eswatini?
It does not currently exist.
Is it a good idea?
It’s a fantastic idea. I am aware that in some countries, there are certain incentives given to big business and foreign investors, but those are tied to certain obligations to MSMEs. If you can prove that X per cent of inputs is sourced locally, then you are entitled to certain incentives. Currently, we have no such incentives in Eswatini, but we are aware that we have to go in that direction. We know that there are big businesses that make billions and then they call their friends from their own countries to set up small businesses to supply them. Inevitably, all the profit flows out and the country will never be rich. In the sugar industry, for example, we have to make sure that fertilisers and irrigation equipment, for example, are not just locally sourced but owned by indigenous people unless businesses prove that local enterprises don’t have the capacity to supply what is required. But we have to encourage that.
By ‘encourage’, do you mean legislate so that big businesses have no choice?
Of course legislate. I am pro-business, I don’t want cumbersome legislation, but I want a situation where if those capacities exist and they are price competitive, there should be no reason why some of the incentives given to big businesses should not be tied to those things we mentioned.
Coming back to you, when the king called you to leave Ireland and come and head the Ministry of Commerce, in your tradition, that is called being ‘Bulawaed’, which roughly translate as ‘being shot’. How did you feel?
You have summarised it correctly. The indirect translation is exactly that; it means your will has stopped to exist and the will of His Majesty has taken over. I don’t want to translate it directly because it will sound bad, but it means that you have surrendered your will to the will of His Majesty.
Did that bother you?
Not at all! We grew up knowing that we may be called to serve our country at any time.
So you had no choice, did you?
No, but there is no higher honour for a man or woman than that. Your family name gets a higher honour in those circumstances when being called upon to serve one’s country.
Did you take time to decide if you wanted to leave your business and family and come back?
I thought about the implications but there is no doubt in my mind that I had to say yes.
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