The Covid-19 pandemic laid bare economic vulnerabilities around the world, and in Eswatini and the Seychelles it highlighted the risks of overdependence on a few sectors to generate growth. More than that, it brought home the imperative of building diverse economies that help reduce inequalities, enhance environmental sustainability and create better employment opportunities for women and young people.
As part of their respective efforts to address these imbalances, these two countries have each developed new industrial policies which aim to foster economic diversification, higher value-added activities and inclusive growth. These policies are evidence-based, aligned to national development objectives and were developed through consultative approaches to reflect local needs, capacities and objectives. It’s an approach which has helped facilitate inter-institutional and multistakeholder dialogue and secure national support. In both cases, the policy development process was led by the relevant ministries with technical assistance from the ICR Facility, and it included the use of the “Enhancing the Quality of Industrial Polices” (EQuIP) methodology, an analytical toolkit developed by the United Nations Industrial Development Organization (UNIDO) and GIZ.
Eswatini’s consultative, data-driven approach
Eswatini is a landlocked kingdom of 1.17m people bordering South Africa and Mozambique which has been experiencing sluggish growth and has high levels of unemployment and poverty. Manufacturing is a major economic engine, but it is highly concentrated in five low tech sectors – beverages, sugar, textiles, cocoa/chocolate, and wood products – which account for 91% of all manufacturing value added. Likewise, three types of products – chemicals, food products and apparel – comprise 89% of the country’s manufactured exports, making Eswatini highly susceptible to commodity price volatility and global demand fluctuations, as happened during Covid-19. To address these vulnerabilities, the new Industrial Policy for Eswatini 2023-33 seeks to promote a diversified and sustainable industrial sector that produces more high value-added products and creates decent jobs, enhances economic resilience and promotes equal opportunities.
In a plenary on gender-sensitive industrial policies at the Investment Climate Reforms for Women’s Economic Empowerment (ICR4WEE) Conference, held in Kigali, Rwanda on 5-6 June, Siphiwangubani Sikhondze, the deputy director at the Ministry of Commerce, Industry and Trade in Eswatini, outlined how this policy was developed. The initial phase involved collecting national and international data and conducting industrial diagnostics. It also involved assembling an Industrial Policy Review Team, which included representatives from across ministries as well as from the private sector, “to understand where we are as a country in order to develop the intended interventions in our policy design”, she said.
A key consideration was to establish how the new Industrial Policy would contribute to the country’s overarching National Development Goals. And in this case, it was determined that the policy would support three of these goals, namely economic recovery, sustainable and inclusive growth, and well managed natural resources and environmental sustainability. Aligning to the National Development Goals not only created a clear rationale for the policy, but it also secured buy-in nationally.
Another crucial priority in the policy design process was adopting a consultative, participatory approach. Since this policy has a strong commitment to promoting women’s economic empowerment to help reduce the gender gap in Eswatini, women’s organisations were consulted throughout the policy development process, from identifying objectives and intervention areas to validating the results and proposed policy instruments.
What did the consultations and number crunching reveal?
The data analysis underscored the lack of economic participation by women in the economy. For instance, it showed that 54% of young women are unemployed and 41% are not in education, employment or training (NEET) compared with 30% of young men. It also found that while the manufacturing sector accounts for 20% of employment in Eswatini and employs more women than men, women earn 11% less than their male counterparts and occupy only 42% of managerial positions. Moreover, wages in the sector are low, averaging $200 per month, or about half the median salary of a public sector employee.
The consultations with women groups yielded recommendations to help empower women and enhance their participation in manufacturing. These included providing training and mentorship programmes to improve skills, supporting access to funding with clear preferences for women, and raising awareness of the benefits that women in the manufacturing sector can access.
According to Zamanyambose B Mtetwa, director of industry at the Ministry of Commerce, Industry and Trade, the new policy would seek to address inequalities by, for example, “promoting the creation of other manufacturing sectors that can offer better quality of jobs and benefits to society, promoting sectors and jobs that could bring higher women participation and trigger women’s economic empowerment; and promoting laws, regulation and incentives.”
Beyond tourism: Seychelles targets diversification and opportunity for all
In the Seychelles, a tropical archipelago of 105,000 people, tourism is a main driver of the economy. When the pandemic hit, the flow of tourists came to a halt, illustrating the danger of overreliance on that single sector. And while tourism has since bounced back, it offers relatively few well-paid jobs, and its future growth potential is limited. Covid-19 also had a hard impact on smaller businesses, which are often run by women. Another significant Seychellois industry, and key source of export income, is processed fish, in particular canned tuna, but this is vulnerable to climate change and global competition. What’s more, cannery work is unappealing to the local population, so it’s mainly carried out by migrant labourers.
The new draft industrial policy seeks to address these challenges and to advance two of the government’s broader objectives enshrined in the National Development Strategy: diversification and inclusive growth. The policy’s development was led by the Ministry of Investment, Entrepreneurship and Industry. It conducted a comprehensive industrial diagnosis and held extensive stakeholder consultations with representatives from civil society, the private sector and public institutions.
One conclusion from these activities is that the Seychelles must diversify and leverage other engines of growth to ensure economic resilience. Another takeaway is the need to promote manufacturing activities that ensure quality, decent and safe work, especially for women and youth, as well as giving value to local resources and local production, and reducing reliance on imports. Stakeholders stressed the need to focus on green industrialisation to avoid jeopardising the tourism industry in the country.
The policy calls for a shift from low value-added activities – notably canned fish – towards a wider array of manufacturing activities with higher value addition, such as the tech and knowledge industries, marine biotechnology, and high-end toiletry, cosmetics and spa products, to name a few. This would create higher skilled jobs offering better salaries and working conditions that would be more attractive to women and young people than cannery work, for instance. And a high value manufacturing sector would also curb reliance on imported goods and foreign workers.
From gender-sensitive industrial policies to government-wide approaches
Reflecting on the Seychelles’ new Industrial Policy, Rosemary Elizabeth, the chair of Women in Action and Solidarity, said: “Through this policy we can improve the employment opportunities of women and build the capacities for them to do more compared with what they are doing now which is still focused in traditional sectors.” She added: “Many of the challenges that we face in the Seychelles can be solved through the empowerment of women.”
This view is echoed at global level in a report by consultancy McKinsey which finds that if women were to participate in the economy on equal terms with men, global GDP would grow by 26%. Designing industrial policies in an evidence-based, participatory and gender-sensitive manner, can help in this endeavour.
This publication is part of an intervention supported by the Investment Climate Reform (ICR) Facility. The ICR Facility is co-funded by the European Union (EU), the Organisation of African, Caribbean and Pacific States (OACPS) under the 11th European Development Fund (EDF), the German Federal Ministry for Economic Cooperation and Development (BMZ) and the British Council. The ICR Facility is implemented by GIZ, the British Council, Expertise France, and SNV. The contents of this publication are the sole responsibility of the author and do not necessarily reflect the views of the donors or the implementing partners
