Determinants Of Competitiveness Of The Swaziland Sugar Industry

The issue of abolishment of trade agreements preferences pose a great threat to the sugar industry in Swaziland. Several questions arise on the global comparative advantage of the sugar industry considering that it is the centre of the country`s economy. This study aimed at estimating the comparative advantage of Swaziland sugar industry in the global market, factors responsible for this comparative advantage, and the factors affecting the competitiveness of the Swaziland sugar industry. The Relative Trade Advantage, multiple linear regression model and Porter`s 1990 National Diamond concept were used to achieve the set objectives, respectively. The study found that the Swaziland sugar industry had a relatively highly comparative advantage in the global market in terms of producing sugar. Results from the regression model indicated that global sugar market prices, exchange rate and export values had a significant influence on Swaziland`s comparative advantage. The Porter`s (1990) National Diamond model analysis revealed factors that enhance competitiveness of the sugar industry including business approach to human resource, relationship and networking, availability of unskilled labour and production of high quality products. Some factors that have a major constraining effect on the competitiveness were the small local market size, cost of transport, and cost of supply of inputs. Government in consultation with the industry representatives should consider development and implementation of an industry policy strategy for the sugar industry intended to ensure its survival. In order to counteract the effects of global market prices and the exchange rate, exploring of new market opportunities is essential. Other strategies would be to improve efficiencies at both field and factory level.