AT the Hilton Garden Inn yesterday, government laid out proposed rules that could redraw how citizens and foreign investors participate in the country’s retail market.
The final draft Citizens Economic Empowerment (CEE) Regulations, 2026 effectively creates a two-tier system for participation in parts of the economy, with ownership requirements changing once a business crosses the E8 million annual turnover threshold.
The draft regulations state that “all retail with annual turnover below E8 million” is reserved for targeted citizens. The provision covers general dealers, supermarkets, groceries, pharmacies, hardware shops, spares and liquor outlets, among other retail activities.
But above E8 million, the rules take a different approach. Larger and strategic businesses would not necessarily be closed to non-citizens. Instead, their participation would be subject to approved joint ventures (JV) in which targeted citizens hold at least 50.1% ownership.
This category includes supermarkets and wholesaling above E8 million, petrol stations, large agricultural-input businesses and cross-border transport.
The result is a clear dividing line in the proposed framework: below E8 million, businesses in the specified retail categories are reserved; above E8 million, non-citizen participation is possible, but through a citizen-majority partnership.
For businesses, the distinction could make turnover and ownership increasingly important considerations when planning expansion, investment and corporate structures.
The retail provisions form part of a much wider empowerment framework presented during the review of ECC final draft meeting yesterday, which was attended by Minister of Commerce, Industry and Trade Manqoba Khumalo, Director of Micro, Small, and Medium Enterprises (MSME) Mluleki Dlamini, the ministry portfolio committee in the House of Assembly and representatives of Business Federation of Eswatini (BUFE).
The draft also proposes that a minimum 50% of total annual procurement value, including common-use items, be set aside for targeted citizen-owned companies.
Within that set-aside, the proposed indicative distribution is 25% for women, 25% for youth and 15% for people with disabilities. What this means exactly is that the regulations propose that at least half of the money government spends on procurement each year should go to companies owned by ‘targeted citizens.’
For example, if qualifying public-sector procurement for the year amounted to E1 billion, at least E500 million would be set aside for targeted citizen-owned companies.
The procurement provision could create a significant new market for citizen-owned businesses, particularly those seeking government contracts.
At the same time, existing businesses will be given time to comply with the new requirements, while existing empowerment programmes would also have to be aligned with the regulations.
The regulations have been vetted by the attorney general’s office and approved by Cabinet for tabling in Parliament.
For the private sector, the proposed regulations go beyond protecting smaller retail businesses. They seek to establish a new framework in which citizen ownership becomes a condition for accessing certain markets, while foreign participation in larger strategic businesses is tied to majority citizen ownership.
FRONTING COULD COST E500 000
BUSINESSES and individuals found misrepresenting ownership under the proposed CEE regulations could face heavy financial and criminal penalties.
The draft Citizens Economic Empowerment Regulations, 2026 introduces stringent consequences for fronting, as government seeks to ensure that empowerment benefits reach the citizens they are intended for.
An individual convicted of fronting could face a fine of up to E500 000 or 10% of turnover, imprisonment of up to five years, or both.
Companies face separate penalties, including a fine of E500 000 plus 10% of turnover.
They could also be blacklisted from public procurement for up to 10 years, while incentives or licences may be cancelled.
The draft also targets benefits already obtained through misrepresented ownership. Where a tender or incentive was awarded on the basis of false ownership information, the award may be cancelled, while any improper benefit may be refunded or recovered.
The provisions were highlighted during yesterday’s review of the final draft regulations at the Hilton Garden Inn, Mbabane.
The anti-fronting provisions are significant because the proposed regulations create new economic opportunities specifically for targeted citizen-owned businesses.
Government’s approach is to link access to those opportunities with genuine ownership and control, rather than arrangements that merely place citizens on paper while effective control remains elsewhere.
The regulations have been vetted by the attorney general’s office and approved by Cabinet for tabling in Parliament.
If adopted, the enforcement provisions would give government a range of sanctions, extending from financial penalties to imprisonment and exclusion from government procurement.
12-month clock starts ticking
EXISTING businesses will get 12 months to align with the proposed Citizens Economic Empowerment Regulations once they come into force.
The transitional period is one of the key provisions aimed at giving companies time to adjust to the new empowerment requirements.
Under the draft regulations, existing companies have 12 months from commencement to comply, while existing empowerment programmes must also be aligned with the regulations during the same period. The provision could give businesses operating in reserved sectors time to review their ownership structures, operations and compliance requirements.
The regulations introduce significant changes to economic participation, including the reservation of retail operations with annual turnover below E8 million for targeted citizens.
Larger and strategic activities, meanwhile, would require approved joint ventures with a minimum 50.1% targeted-citizen ownership.
The draft also proposes that at least 50% of annual procurement value be set aside for targeted citizen-owned companies. The transition period is therefore likely to be particularly important for companies that may be affected by the new procurement, ownership or reservation requirements.
