Africa-Press – Eswatini. The Eswatini Sugar Association (ESA) is taking proactive steps to navigate a changing global sugar market, according to CEO Banele Nyamane.
While ESA currently enjoys success in preferential markets, Nyamane acknowledges the potential for saturation in these markets in the near future.
“We anticipate that preferential markets will become overcrowded soon,” Nyamane stated during the Eswatini Exporters Awards handover ceremony organised by Eswatini Investment Promotion Authority at ESA headquarters yesterday.
“When that happens, ESA needs to have perfected its knowledge and skills to explore logistics for other markets,” he said.
This underscored the importance of ESA preparing its members for success in non-preferential markets.
Nyamane emphasised the need for the association to enhance its members’ knowledge and expertise in logistics and navigating non-preferential trade channels.
Despite generating significant revenue from preferential markets, with 99 per cent of exports coming from these, ESA recognised the need for diversification. Nyamane highlighted the association’s initiative to explore limited exports to non-preferential markets.
“We are embarking on the process of exporting limited quantities of sugar to non-preferential markets,” he said.
This strategic move allowed ESA to test the waters and gain valuable experience in these new territories.
“The current financial year’s focus is on Weber-developed specialty sugars,” Nyamane revealed.
He explained that ESA’s commercial department is actively marketing these specialty sugars globally, aiming to add value for its members.
“The commercial department is tasked with marketing these specialty sugars globally to increase the value we deliver to our members,” said Nyamane, explaining that this diversification into specialty sugars offered ESA a competitive edge and opens doors to new markets.
Looking beyond immediate diversification efforts, Nyamane disclosed that ESA is in discussions with potential partners.
These discussions aimed at identifying mutually beneficial agreements that allow ESA to fully leverage the advantages of the African Continental Free Trade Area (AfCFTA).
By establishing strategic partnerships within the AfCFTA framework, ESA can potentially expand its reach and access new markets across the continent.
“We are in talks with other partners to see what agreements we can enter into to fully take advantage of the benefits offered by AFCFTA,” Nyamane said.
He said by forging strategic partnerships within the African continent, ESA can leverage AFCFTA to expand its reach and solidify its position in the global sugar market.
Nyamane indicated that by preparing for potential market saturation, exploring new revenue streams, and capitalising on regional trade agreements, ESA was well-positioned to navigate the evolving global sugar landscape and ensure continued success for its members.
EIPA shines light on trade finance challenges for SMEs
Eswatini Investment Promotion Authority (EIPA) External Trade Promotion Manager, Sibusiso Mnisi, has highlighted the critical issue of trade finance and the challenges faced by the small and medium-sized enterprises (SMEs) in accessing it.
He pinpointed the lack of easy access to finance, particularly for SMEs, as a major obstacle hindering the country’s ambition of becoming an export-driven economy.
While acknowledging Eswatini’s positive performance in global trade, Mnisi said there was room for significant improvement.
“EIPA recognises that Eswatini is performing well in global trade. However, reports indicate that we have the potential to achieve even greater success,” emphasised Mnisi.
He identified the lack of easy access to finance, particularly for SMEs, as a major roadblock hindering this potential.
Mnisi elaborated on the challenges faced by SMEs, highlighting the risk-averse nature of financial institutions.
“Development finance institutions, private financial institutions, and commercial banks often prioritise risk management,” he explained.
“Even when an SME secures a significant export order, these institutions may be hesitant to provide financing due to the perceived risk.”
These large orders, according to Mnisi typically require substantial working capital upfront for raw materials, branding, and transportation, with payments often delayed for up to four months.
He further highlighted the characteristic nature of export orders, saying, “It’s important to understand that exporter orders are frequently substantial, requiring significant upfront investment.”
This reality, coupled with the extended payment timelines, according to Mnisi creates a significant hurdle for SMEs seeking traditional financing.
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