Eswatini

The legal framework analysis aims to provide general knowledge of the national cooperative legislation and of its main characteristics and contents, with particular regard to those aspects of regulation regarding the identity of cooperatives and its distinction from other types of business organisations, notably the for-profit shareholder corporation.

It aims to evaluate whether the national legislation in place supports or hampers the development of cooperatives, and is therefore “cooperative friendly” or not, and the degree to which it may be considered so, also in comparison to the legislation in force in other countries of the ICA region, or at the supranational level.

In addition, the research aims to provide recommendations for eventual renewal of the legal frameworks in place in order to understand what changes in the current legislation would be necessary to improve its degree of “cooperative friendliness”, which is to say, to make the legislation more favourable to cooperatives, also in consideration of their specific identity. This webpage presents a snapshot of the legal framework analysis results for Eswatini.

Cooperatives in Eswatini are registered and operating under the Cooperatives Societies Act, 2003 and Cooperative Societies Regulations 2005.

Main Regulations relevant to cooperatives in Eswatini

Cooperative friendliness

The Cooperatives Act creates a conducive environment for the development of cooperatives in the country. Besides, the National Co-operative Development Policy, 2017, recognizes cooperatives as instruments for social-economic development which focuses on associative economic strategy as a key factor for enabling more people to participate in creation, expansion and operation of viable and sustainable enterprises.  However, there is an un-denied fact of over regulation of cooperatives in the country, in particular SACCOs.  This places the friendliness of the cooperative legislation wanting.

Key recommendations for improvement 

The national legal framework is well-crafted even though there are some challenges still in place. In order for the national legislation to be more adequate for the development of cooperatives, reforms are needed to:

• Establish a mechanism (e.g. a specific fund) for assisting newly registered cooperatives to access startup capital;
• Address the issue of high levies on SACCOS charged by the FSRA;
• Harmonize the roles of the Cooperative Development Department and the FSRA with regard to regulation of SACCOS;
• Address issues of mismanagement of funds in cooperatives which is a chronic challenge facing cooperatives across the country; and
• Review the term of office for Management Committee (Board of Directors) in order to ensure efficiency and effective leadership succession in cooperatives

Conclusions

Cooperatives receive the necessary support from the government and operate in compliance with the governing legislation, cooperative principles and values. The government recognizes the potential of cooperatives to operate in various sectors of the economy throughout the country and made an undertaking to ensure the legal framework on formation of cooperatives in various sectors of the economy is in place. This is demonstrated by the ongoing review of the Cooperative Societies Act, 2003, currently at the stage of a Bill which has been tabled for debate in Parliament to enhance efficiency & effectiveness in regulation and management of cooperatives.

_{The legal frameworks analysis is a tool developed under the ICA-EU Partnership #coops4dev. It is an overview of the national legal frameworks at the time of writing. The views expressed within are not necessarily those of the ICA, nor does a reference to any specific content constitute an explicit endorsement or recommendation by the ICA.}