Good Swazi roads fail to attract foreign investment

THE SWAZILAND government’s policy of building highways and upgrading road infrastructure is based on the premise that good roads will attract foreign direct investment (FDI). However, the assumption has not borne desired results, with FDI dwindling in inverse proportion to highway improvements. A visit by World Bank investigators last month found GDP growth dropping to around 2%. FDI is expected to be about half that in 2008. Meanwhile, FDI to neighbours Mozambique and SA is growing as their economies thrive by comparison. “Build better roads and the investors will come” has been the mantra of the Ministry of Public Works and Transport. For 15 years, government assisted by grants and low-cost loans from the EU, Japan and other international partners has upgraded the highway system to levels nearly on par with SA, where imports and exports originate and end for the landlocked country. Government planners said the disparity between SA and Swazi roads discouraged foreign businesses. Without discounting the need for good roads to transport goods, economists say other factors are inhibiting FDI, including lack of transparency for bureaucratic operations like licensing, governance issues, lack of natural resources, and a small population that cannot generate sufficient local buying power to purchase locally-made goods.