MUFTI Feroz Ismail, who speaks on behalf of the Islamic community in Eswatini, has cautioned that the proposed Citizens’ Economic Empowerment (CEE) Act regulations could disrupt affected business sectors.
Ismail acknowledged the kingdom’s authorities to introduce economic legislation and said citizens would have to comply with the law.
However, he warned that the implementation process could create deficiencies in affected sectors, potentially triggering shifts in activity elsewhere in the market.
“Of my own opinion, yes, it’s a kingdom and whatever the law is, we have to oblige and agree to and we have to move ahead with that,” he said.
He added, “But I’m sure that there will be a disarray or deficiency in that sector. It’s inevitable that there will be a deficiency and could lead to a collapse which will create a surge in another end of the market.”
Ismail said the issue was delicate, suggesting that the potential consequences were understood by those involved in shaping the legislation.
Worth to note is that many members of the Islamic community operate businesses in the country.
His remarks place the spotlight on the economic implications of implementing the CEE framework, particularly how business operations will be sustained as ownership opportunities shift towards targeted Emaswati.
Ismail, about three months ago during an interview, had urged caution over the proposed empowerment framework, questioning how the law would define indigenous citizens in a society shaped by mixed cultures and marriages.
He argued that these considerations required careful attention as government finalised the regulations.
The proposed regulations seek to reserve selected business sectors, commercial premises and procurement opportunities for eligible citizens.
Under the final draft previously discussed with senators, retail businesses with annual turnover below E8 million would be reserved for targeted citizens, while larger businesses in specified strategic sectors could accommodate non-citizen participation through joint ventures with at least 50.1% ownership by targeted citizens.
The proposed transition period for these changes is 12 months.
The changes are intended to broaden local participation in the economy.
However, Ismail’s latest comments raises questions about whether the transition could leave gaps in affected markets and how such disruptions might influence activity in other parts of the economy.
Citizens Economic Empowerment Council (CEEC) Chairperson Lincoln Motsa, recently expressed confidence in the ability of locals to take advantage of the opportunities expected to emerge under the regulations.
Speaking during discussions with senators on the final draft of the CEE Regulations at the Hilton Garden Inn in Mbabane, Motsa said the country had educated graduates and experienced workers capable of operating businesses successfully.
Motsa, who is behind the OK Foods supermarket chain, argued that access to finance remained a major obstacle for potential entrepreneurs.
He cited employees who had worked as supermarket managers for years, accumulating the operational experience needed to run businesses, but who required bank financing to take over retail outlets. He was confident that Emaswati are ready to take over retail sector.
Motsa also pointed to Botswana’s efforts to promote local agricultural production as an example of how policies favouring domestic participation could encourage partnerships between foreign-operated businesses and local producers.
He acknowledged that such transitions could initially bring discomfort but maintained that the long term economic benefits for citizens could outweigh the difficulties.
Commerce, Industry and Trade Minister Manqoba Khumalo has also maintained that the transition would require confidence in Emaswati’s ability to participate meaningfully in the economy.
He also indicated that transitional provisions would be necessary to prevent disruptions as businesses adjust to the new framework.
| Element / Stakeholder | Core Position & Regulatory Parameters |
|---|---|
| Small Retail Threshold | Retail businesses with an annual turnover below E8 million to be reserved exclusively for targeted citizens. |
| Joint-Venture Quotas | Larger strategic businesses may accommodate non-citizen participation strictly through joint ventures with at least 50.1% ownership held by targeted citizens. |
| Implementation Timeline | Proposed 12-month transition window for non-compliant businesses to restructure equity or divest. |
| Mufti Feroz Ismail (Islamic Community) | Warns that deficiencies or collapses in affected retail niches are inevitable, potentially unsettling the wider market; questions how indigenous status is defined in mixed-marriage households. |
| Lincoln Motsa (CEEC Chairperson) | Expresses confidence that local managers and graduates have the operational experience to run stores; cites bank financing as the chief hurdle; references Botswana’s agricultural protection model. |
| Manqoba Khumalo (Minister of Commerce) | Affirms belief in Emaswati enterprise while emphasizing that transitional provisions are necessary to prevent economic fallout. |
Comparative summary of regulatory drafts and perspectives on the Citizens’ Economic Empowerment Act.
