In the early 1960s the Commonwealth Development Corporation (CDC) built Mhlume Sugar Mill and guaranteed to buy around half the country’s sugar crop for way above world market prices. When Britain later entered the European Union (EU) sugar subsidies were taken over by the organisation.
The result has been that for atleast 40 years now, half the national sugar crop was sold at around two and a half times the world price. This flooded the entire sugar industry with money, and hugely boosted the national economy.
However, this subsidy agreement ended in 2017 and will not be replaced. Many EU countries now have severe economic problems of their own, including high unemployment.
For this reason, foreign subsidies are increasingly unpopular with their electorates, particularly given the rise of the New Right in Europe and many countries in the West. Aid in general is either severely cut or just ended.
In the case of Swaziland, and way before the end of the subsidies, the EU tried to broaden the industry for well over 10 years to make it more efficient. In fact, the EU spent E1.6 billion on 60 different sugar related projects in the country.
Part of this money was spent on new tar roads and a large bridge across the Usutu river. The aim was to lower transport costs between growers and the mills, as well as develop new sugar related products.
Most of the money, however, went to large agricultural poverty alleviation schemes in the lowveld. These involved finding (and funding) farmers and chiefs on Swazi Nation Land who were prepared to release their farms into co-operatives and community companies.
Together with the government, LUSIP and other developmental banks, the EU funded the construction of large dams, canals and irrigation schemes. It then provided 80 percent of the cash needed to kick start the farmers as new cane growers.
It is important to note that these projects have been a major success as most small holder Farmer Projects are now debt free. They have excellent infrastructure and improved standards of living.
The communities were encouraged to diversify their crops from the start, hence they now enjoy fertile irrigated land and have access to global markets.
To put all of this into proper context, we need to appreciate that the sugar industry plays a significant role in the country’s economy.
Sugar cultivation and milling accounts for around 12 percent of the country’s GDP. It employs around 12 000 people. Sugar is big business in Swaziland. Sales receipts from the Eswatini Sugar Association were estimated at E5.1 billion in the 2018/2019 year and that is just for the raw sugar products (including ethanol) alone.
There is a whole service industry built around sugar in the country; transportation (trucks), railways, sugar packing, engineering, sweet factories, insurance, distilleries, ethanol plants and banking.
This also includes small business where individual small farms supply the industry with cane. In fact, Eswatini Sugar Association estimates that forty percent or more of the economy comes directly from sugar.
However, this is only the base of the industry, there is much more. For example, Coca Cola syrup, with its secret ingredients, is shipped from Atlanta to Swaziland where sugar is added in their refinery in Matsapha.
The resulting concentrate is then shipped to the rest of Africa and parts of the Middle East where water and bubbles are added. From there it is canned and sold. There are only seven factories like Coca Cola’s factory in Matsapha. The business, therefore, is hugely profitable hence is the largest tax payer in the country.
It is worth noting that around 50 percent of government income is derived from Southern African Customs Union (SACU) receipts which are administered from Pretoria. This is calculated in South Africa and therefore out of the control of the Swazi government.
In practical terms, sugar is the one big industry that can be a source for political change in Swaziland. That’s why the EU has focused on it for decades. Therefore, if you want to hurt the Swazi government or force it into any significant political change, then sugar is your best bet.
Now, the EU embassy itself has two divisions; political and development aid (known as cooperation). The ambassador sends reports back to Brussels on what is happening in the country.
Policy is then set according to these reports plus the general EU policies. This means, to a large degree, the personal and political attitudes of the ambassador affects EU policy towards Swaziland.
The previous Ambassador, Nichola Bellomo, was a liberal who was prepared to impose EU ‘sanctions’ on Swaziland if human rights did not improve. When his contract was up in 2017, he was replaced by Esmeralda Hernandez Aragones from Spain.
The change to a conservative approach was instant. Bellomo’s staff used his first name in meetings while Hernandez Aragones insists on being called ‘Your Excellency’ even by her EU associates. When she presented her credentials at Lozitha Palace she praised the king for “his wise and stable leadership” of SADC.
While Hernandez Aragones praised the recent enactment of the Sexual Offenses Domestic Violence (SODV) Act and the expanding rights for gays and women in the country, all talk of sanctions because of serious persecution of political opponents to the government has evaporated.
Perhaps, the greatest show of her attitude in the country has to be seen by her choice of place of residence. Ambassador Hernandez Aragones decided that the official ambassadorial residence, used by numerous ambassadors with families, was too small.
She has moved to a ‘mansion’ that she claims is suitable for ‘entertainment’. It is worth noting that she is single and therefore lives alone in this spacious building.
Another challenge the EU in the country now faces is the quality of their staff. The EU runs around 65 development projects in Swaziland, some large and some small.
The Head of Cooperation, Ariane Labat, is on her first posting outside Europe with little to no experience of running development projects or working in the so called third world. The two most senior EU Program Managers, Philip de Loof and Umberto Ambrosi, recently left the country.
Reliable sources allege that Labat is attempting to micromanage all 65 projects herself. The result has at best been chaotic. For example, it is alleged that her emails go unanswered, important decisions are not taken on time and projects are generally floundering without clear leadership.
As already stated, over the last decade the EU spent well over a billion establishing and supporting Smallholder Farmer Projects, mostly growing sugarcane. The EU’s major partner in this regard is Ubombo Sugar who help disburse EU funds to the Smallholder Farmers.
Then the EU reimburses Ubombo Sugar on a regular basis, or is supposed to. However, for six months, it is alleged, the EU did not pay its bills to Ubombo Sugar.
There are real fears that Ubombo Sugar may eventually end their partnership with the EU because, it is claimed, they cannot afford to extend the large sums involved. In effect, this would mean leaving the EU with no other mechanism to administer aid to the farmers.
As a result, the largest rural development project the EU has ever attempted in Swaziland risks being destroyed because of their own administrative inefficiency.
There are reports of other EU projects failing too. For example, sites were identified for an EU project to construct community dams across the country meant to benefit thousands of homesteads on Nation Land.
These sites were identified by a hydraulic engineer in 2016 and 2017. EU specialist consultant, Giuseppe Bronzoni, was then brought in to construct the dams.
However, by September 2019, 18 months after his arrival, no dam had been started owing to the inability of the EU Cooperation office in Mbabane to steer the project through their own bureaucracy.
The jury is still out on whether the EU office will rise above these challenges and importantly, whether the office will once again put human rights abuses by the government firmly back on the agenda.
NB: Thandi Hlophe is an investigative journalist currently based in South Africa