BENEFITS OF MAKING BUSINESS IN SWAZILAND W W W. M E R G E R S C O R P. C O M
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BENEFITS OF MAKING BUSINESS IN SWAZILAND
W W W. M E R G E R S C O R P. C O M
Country Overview Swaziland, a small, landlocked monarchy in southern Africa, is known for its wilderness reserves and festivals showcasing traditional Swazi culture. Marking its northeastern border with Mozambique and stretching down to South Africa, the Lebombo Mountains are a backdrop for Mlawula Nature Reserve’s many hiking trails. Nearby Hlane Royal National Park is home to diverse wildlife including lions, hippos and elephants. A virtual guide to Swaziland, the small landlocked kingdom in southern Africa is bordered by South Africa and Mozambique. The country covers an area of 17,364 km², it is one of Africa's smallest countries, slightly larger than half the size of Belgium, or slightly smaller than the U.S. state of New Jersey.The country is known for its game reserves, the Mlawula Nature Reserve and the Hlane Royal National Park with diverse wildlife including lions, hippos and elephants. Swaziland has a population of 1.4 million people, national capitals are Mbabane, and Lobamba.
Executive Summary Swaziland is a little-known country of 1.2 million people where the government has popularized photos of beautiful girls performing traitional dances for the king. These images both attract tourists and distract outsiders from Swaziland’s shocking realities of oppression, abject poverty, hunger and disease. In actuality, Swaziland is a country in crisis where even the traditional culture risks extinction due to the absolute monarch’s malfeasance. The Swazi, Swati or siSwati language (Swazi: siSwati) (pronounced [siswatʼi]) is a Bantu ... KaNgwane areas. Swazi is an official language of Eswatini (along with English), and is also one of the eleven official languages of South Africa. The Swazis are people who are predominantly Nguni in language and culture. However some of the Swazi people originate from Sotho clans that were also inhabitants of Eswatini which is why the surname Maseko as the original Royal rulers in Eswatini is similar to Maseho in Lesotho.
Introduction – Doing business in Swaziland Manufacturing is the main driver of the Swazi economy. The sector consists primarily of four export-oriented industries: wood pulp production, drink processing, fruit canning, and sugar processing. Swaziland’s textile and apparel sector became eligible for the African Growth and Opportunity Act in 2000 and qualified for the apparel provision in 2001.
Subsequently, over 30,000 jobs, mostly for women, were created in the sub-sector. However, even before the ongoing global crisis, the industry experienced major setbacks in 2005-06, due to both increased global competition as a result of the end of the Agreement on Textiles and Clothing in early 2005, and the then strong lilangeni which reduced exports. New agricultural policy focusing on achieving greater food security, increasing farm tools, crop yields and storage facilities, diversifying food and commercial crops via agribusiness, and lastly, supporting price stabilisation and better market access programmes.
Conducting business in Swaziland Swaziland has a relatively diverse economy which is dominated by Agriculture and manufacturing Sectors. Due to its small population size Swaziland has positioned itself as an export oriented economy tapping into several free trade blocks and customs unions, Export oriented industries drive the economy and provide 80 percent of GDP. Swaziland is currently a member state of the Common Market for Eastern and Southern Africa, the Southern Africa Development Community, and the Southern African Customs Union. Swaziland was declared a non-beneficiary of the African Growth and Opportunity Act, with loss of benefits effective, due to an accumulation of concerns around legislation and government practices that effectively restricted the freedoms of peaceful assembly, association, and expression. The Government of the Kingdom of Swaziland moved relatively quickly to enact needed changes in labor legislation and establish a code of practice on industrial action, but progress on changes to the Suppression of Terrorism Act and the Public Order Bill was halting.
Taxation in Swaziland All businesses are required to make provisional tax payments twice annually; these advance payments are due on the 31st December and 30th June for each tax year. A third payment is due when there is a short-fall after the provisional taxpayer has submitted a tax return and has been assessed.
Swaziland personal Income Tax. Swaziland personal income tax rates are progressive to 33%. Individuals are taxed on income from a source within or deemed to be within Swaziland. They are for farming income, rent receivable and other income which has been accrued to a farmer during the year. Tax returns for Companies which have an approved variation from the year ending 30 June are due 120 days after the approved financial year end.
Trade Swaziland's trade is highly dependent on South Africa (80 percent of total imports and 60 percent of exports). Swaziland main exports include: sugar, wood pulp, beef and drink concentrates. Swaziland is a net importer of food, fuel and machinery. Main trading partners are South Africa, Mozambique, Botswana and Namibia. Swaziland main exports are: sugar, wood pulp, cotton, beef and soft drink concentrates. Main export partner is South Africa (60 percent of total exports) followed by Mozambique, Botswana, Namibia and Norway.
Swaziland is a net importer of goods and services. Net imports accounted for 4% of GDP in 2005. The main exports are softdrink concentrates, confectionery, canned fruit and other food products, especially those based on sugar and fruit; clothing and textiles; and wood pulp, timber and paper/board products.
Banking in Swaziland The well-established commercial banking system in Swaziland comprises Nedbank (Swaziland), Standard Bank Swaziland and First National Bank Swaziland, all of which are affiliated to South African banks.
First National Bank and Standard Bank Swaziland offer online banking alongside traditional banking services. Nedbank (Swaziland) is alone in offering microfinance services (2012). It is listed on the national stock exchange and is partly owned by the government; the Swazi Government also has a minority holding in Standard Bank Swaziland. Other banking institutions include the Swaziland Development and Savings Bank and Swaziland Building Society which is the main long-term mortgage provider.
Our M&A Process TARGET APPRAISAL
APPROACH
DUE DILIGENCE
NEGOTIATION & CLOSE
POST MERGER INTEGRATION (PMI)
Revisit indicative valuation & prepare detailed valuation based on due diligence findings; SPA negotiations with the seller; Development of final structure (share/asset deal) and final valuation; Approvals; Signing of SPA & Close.
Consider the extent of integration; Development of 100 Day PMI Plan; Consider short & long term objectives; Estimate requirements to capture synergies; Determine resource needs & optimal allocation.
Company general counsel; Lawyers; Senior management.
Company general counsel; Lawyers; Senior management/HR.
Key Areas Target & market analysis; Initial assessment of synergies & value drivers; Indicative valuation; Go or No-Go decision; Preparation of transaction documents (NDA – Nondisclosure Agreement/LOILetter of Intent); Select Transaction team; Appoint advisors; Consider funding ability.
Initial approach letter; Signing of NDA; Prepare & share initial information requests; Formulation of LOI (Letter of Intent) & possible negotiations; Initial meeting and Q&A; Circulate information on the Target to the Transaction team.
Set scope of due diligence; Set up VDR (virtual data room); Coordinating of due diligence, further meetings and Q&A sessions; Consider points relevant to the Post-Merger (PMI) phase;
Parties Involved CFO; Head of M&A; Accountants; Corporate finance advisors; Consultants.
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