MBABANE: Eswatini is moving to reshape who controls parts of its economy, but a parliamentary debate over foreign-owned shops has exposed a difficult question facing governments across Africa: how do you create opportunities for citizens without destroying the businesses, jobs and economic activity that already exist?
Members of Eswatini’s House of Assembly have backed 12 months for foreign-owned businesses found to be operating in violation of the country’s laws and regulations to regularise their operations or close.
The recommendation followed a debate on the Ministry of Commerce, Industry and Trade’s second-quarter performance report, during which MPs questioned the way authorities were implementing inspections and closing businesses, particularly those owned by Asian nationals operating on Swazi Nation Land.
The decision comes amid a broader government drive to increase economic ownership and participation by emaSwati, as citizens of the kingdom are known.
However, the parliamentary discussion revealed that there is no consensus on how the transition should happen, who should qualify to take over the businesses or whether local entrepreneurs are sufficiently equipped to replace established operators.
Some MPs argued that foreign traders should be given as long as three years to prepare local successors. Others wanted a much shorter period, arguing that citizens who are struggling economically should not have to wait any longer for access to business opportunities.
The eventual 12-month recommendation attempts to find middle ground, but it does not resolve the more fundamental questions surrounding the policy.
Economic empowerment or economic displacement?
Eswatini’s Citizen Economic Empowerment Act, which came into effect on 1 July 2024, provides the legislative foundation for increasing citizen participation in the economy.
The government established the Citizen Economic Empowerment Council to help implement the legislation, which seeks to promote citizen-owned businesses, expand local participation in procurement and reserve certain economic activities for companies owned by emaSwati.
The regulations being implemented under the framework are particularly significant for the retail sector.
In September, the Ministry of Commerce tabled the 2026 Citizens Economic Empowerment Regulations in Parliament. Among their provisions is a proposal to reserve retail businesses with annual turnover below E8 million for targeted citizen-owned companies.
The threshold covers a broad range of everyday businesses, including general dealers, supermarkets, grocery shops, pharmacies, hardware stores, automotive spares outlets, liquor shops, laundries and convenience stores.
The proposed framework also provides for different ownership arrangements in businesses above the threshold, including partnerships with citizen-owned companies.
The policy is intended to address complaints from local traders who argue that foreign operators have become dominant in markets that should provide opportunities for local entrepreneurs.
There is a legitimate economic argument behind that concern.
If citizens are unable to participate meaningfully in sectors of their own economy, the benefits of commercial activity may not be distributed as widely as they could be. Local ownership can create opportunities for wealth accumulation, entrepreneurship, employment and reinvestment within communities.
But economic empowerment is not achieved simply by changing the nationality of a business owner.
The more difficult question is whether the people expected to take over these businesses have access to finance, business skills, supply chains, infrastructure and the managerial capacity to operate them sustainably.
A shop does not become successful simply because its ownership changes.
MPs question who will take over the businesses
The parliamentary debate highlighted the practical difficulties of implementing the policy.
Mbabane East MP Welcome Dlamini questioned the manner in which the Ministry of Commerce was conducting inspections and closing foreign-owned shops.
He warned that goods were being left inside closed businesses and that emaSwati employed by the affected traders were losing their jobs.
Dlamini also questioned whether government had a clear plan for identifying and preparing local entrepreneurs to take over the businesses.
He argued that foreign operators should be allowed sufficient time to train potential successors and proposed a three-year transition.
Other MPs disagreed.
Some argued that extending the period would unnecessarily delay opportunities for local traders, many of whom were themselves struggling to survive.
Lobamba Lomdzala MP Marwick Khumalo also raised concerns about the impact on consumers, particularly in communities that rely on foreign-owned shops for access to everyday goods.
He questioned whether government had adequately considered the possibility that closing these businesses could leave some communities without convenient access to essential products.
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The Ministry of Commerce maintained that the inspections were intended to enforce existing laws and regulations rather than remove all foreign-owned businesses.
It also indicated that businesses with valid authorisations would be assessed according to their individual circumstances.
That distinction is important.
There is a difference between enforcing licensing, immigration, tax and land-use requirements and forcing businesses to close simply because their owners are foreign nationals.
The credibility of the entire exercise will depend on whether authorities apply the rules consistently and transparently.
The economic cost of getting the transition wrong
Eswatini cannot afford to ignore the economic consequences of a poorly managed transition.
The World Bank’s latest country information shows that poverty remains deeply entrenched. Its 2026 country overview reports that 54% of the population lived below the lower-middle-income poverty line of US$4.20 a day in 2025.
Youth unemployment is also a major concern, with 52.2% of people aged 15 to 24 unemployed in 2025.
These figures explain why the government is under pressure to expand economic opportunities for citizens.
But they also demonstrate why employment and business continuity must be considered when implementing the empowerment programme.
A foreign-owned shop may employ local workers, pay rent, purchase goods from suppliers, pay taxes and provide services to a community. Closing it without a viable replacement could remove several sources of economic activity at once.
The impact is not limited to the business owner.
Employees may lose their incomes. Landlords may lose rental revenue. Suppliers may lose customers. Consumers may have to travel further or pay more for goods if competition and availability decline.
This does not mean that businesses operating unlawfully should be allowed to continue trading. It means that enforcement should be accompanied by a credible transition plan.
The government must also explain how citizens who are expected to take over these businesses will access the financing required to do so.
Without affordable credit, training and support, economic empowerment risks becoming a transfer of business opportunities on paper rather than a sustainable expansion of local entrepreneurship.
A regional shift towards protecting local businesses
Eswatini’s approach is part of a wider debate across Africa about the role of foreign nationals in domestic economies.
Kenya has also taken steps to restrict foreign participation in parts of its small-business and informal retail sectors.
In September, President William Ruto directed authorities to act against foreign nationals operating businesses in sectors intended to be reserved for Kenyan citizens.
The government subsequently introduced a 90-day regularisation exercise requiring foreign traders to update their immigration, work permit, business registration and licensing documents.
Kenyan officials later clarified that the exercise was not intended as a blanket ban on foreign nationals operating businesses.
The distinction between enforcing compliance and excluding foreign nationals altogether has become central to the debate.
The Associated Press reported that the Kenyan directive had caused anxiety among immigrant communities, particularly Burundian and Congolese traders. Some foreign business owners feared losing their livelihoods, while others sought assistance from their embassies.
Kenya’s experience illustrates how quickly economic protection policies can generate uncertainty when the scope and implementation of the rules are not clearly communicated.
South Africa has experienced an even more volatile version of the debate.
Anti-immigration campaigns have increasingly targeted foreign-owned informal businesses, with protests and enforcement actions sometimes accompanied by looting, intimidation and violence.
The Armed Conflict Location & Event Data Project (ACLED), which monitors political violence and demonstrations, reported an increase in violence associated with anti-migrant mobilisation in South Africa during July 2026.
Ghana’s Foreign Minister Samuel Okudzeto Ablakwa also reported in September that four Ghanaian nationals had been killed in South Africa between April and July amid renewed xenophobic violence.
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These developments demonstrate the danger of allowing legitimate economic and immigration policy concerns to become hostility directed at people because of their nationality.
Eswatini’s parliamentary debate provides an opportunity to distinguish between the two.
Governments have the right to regulate economic activity, determine which sectors should be reserved for citizens and enforce their immigration and business laws. But those powers must be exercised within a clear legal framework, with fair procedures and protection against discrimination and arbitrary enforcement.
The investment question
There is another consideration that cannot be ignored: the effect on investment confidence.
Foreign investment can bring capital, technical skills, access to international supply chains, employment and competition. For a relatively small economy such as Eswatini, the ability to attract investment while developing domestic businesses is an important part of its economic strategy.
The World Bank identifies a weak business climate, limited formal job creation and constrained economic opportunities among the factors contributing to persistent poverty in Eswatini.
A policy that increases citizen ownership but creates uncertainty about business licences, property rights and the treatment of existing investors could complicate efforts to improve that business environment.
The challenge is not to choose between foreign investment and citizen empowerment.
It is to establish a framework in which foreign investors understand the conditions under which they can operate, local entrepreneurs have a realistic route into the market, and workers and consumers are not left carrying the cost of policy uncertainty.
The government will need to demonstrate that the rules are predictable, that enforcement is consistent and that investors who comply with the law are treated fairly.
Otherwise, a policy designed to expand economic participation could discourage the very investment needed to grow the economy and create more opportunities.
Ownership must come with the ability to build businesses
One of the most important issues emerging from the Eswatini debate is whether economic empowerment is being treated primarily as a question of ownership or as a broader programme of economic development.
Changing ownership is only one part of building a stronger domestic business sector.
Local entrepreneurs need access to affordable finance, business development support, reliable infrastructure, market information and opportunities to participate in public and private procurement.
They also need the skills to manage stock, negotiate with suppliers, understand cash flow, comply with tax requirements and compete in markets where customers have choices.
If the government wants emaSwati to take over businesses previously operated by foreign nationals, it must ensure that those entrepreneurs are equipped to succeed.
The Citizen Economic Empowerment Council will therefore have an important role beyond identifying economic activities for reservation. It must help build the capacity and financing mechanisms that make local ownership sustainable.
There is also a need to guard against fronting, where businesses appear to be citizen-owned but remain controlled by other interests. Genuine empowerment requires real ownership, decision-making power and the ability to retain the economic benefits of the business.
The test will not be how many foreign-owned shops close. It will be how many viable citizen-owned businesses emerge, how many jobs are created or retained and whether communities are better served.
A test of economic policy and governance
Eswatini’s 12-month transition recommendation is more than a dispute over the future of foreign-owned shops. It is a test of how the country intends to balance economic empowerment, regulatory enforcement, investment and social stability.
The government has a legitimate responsibility to ensure that its citizens are not permanently excluded from economic opportunities. It also has a responsibility to ensure that the rules governing businesses are applied fairly, that workers are protected and that consumers are not unnecessarily disadvantaged.
The 12 months must therefore be accompanied by clarity on which businesses are affected, the specific legal requirements they have breached, the process for regularising their operations and the support available to citizens who want to take over.
It must also be clear whether the parliamentary recommendation has been formally incorporated into the applicable regulations or legislation. A parliamentary recommendation should not automatically be treated as an amendment to an existing law.
Ultimately, economic empowerment should be measured by the economic opportunities it creates, not simply by the businesses it removes.
If Eswatini succeeds in building a stronger class of local entrepreneurs, expanding employment and retaining a predictable environment for investment, the policy could contribute to a more inclusive economy.
But if the process results in closed shops, lost jobs, disrupted supply chains and uncertainty for businesses that have complied with the law, the country may find that it has changed who owns some of its businesses without addressing the deeper economic problems that made the intervention necessary.
The real question is not whether emaSwati should have a greater stake in their economy. It is how to make that participation meaningful, sustainable and beneficial to the wider population.
