According to the eSwatini Sugar Association (ESA), the tax hike announced by South African Finance Minister Tito Mboweni in his budget speech last week is expected to put further pressure eSwatini’s sales revenue.
The bad news for the eSwatini sugar industry is that the tax hike by South Africa coincides with the influx of cheap imports into the Southern African Customs Union (SACU) market.
eSwatini sells about 230,000 tonnes of refined sugar per year within SACU, with South Africa being the major buyer.
“The tax hike is a fresh threat to the already struggling sugar industry. Any refined sugar that cannot be sold into SACU would have to be sold into the low-priced world sugar market which does not allow local refineries to recover their costs of production,” ESA spokesperson Thabile Maripe said.
Sugar production contributes about US$285 million to eSwatini’s gross domestic product while the industry employs more than 20,000 workers.