SACU not yet out of the woods

Southern African Customs Union (SACU) member states have been cautioned of a possible negative spillover from the Euro-zone crisis, which threatens their common revenue pool. Minister of Finance and Development Planning Kenneth Matambo advised at the opening of the 29th meeting of the SACU council of ministers that member states should exercise caution and resist temptation to expand expenditure in the management of their fiscal policy. “We have already cautioned SACU members about this possible spillover, at our last meeting held on the 7th December in Swakopmund, Namibia,” said Matambo.

He added that while SACU noted a surplus in the Common Revenue Pool (CRP) in the 2011/2012 financial year, caution needs to be exercised given the developing circumstances at the Euro-Zone which he says may consequently affect the SACU revenue pool growth. Matambo said with the International Monetary Fund (IMF) World Economic Outlook report having painted a gloomy picture for the global economic development spiked by the weaknesses in the advanced nations, the challenges are highly likely to affect the developing nations. “In essence, this means that we are not out of the woods yet and measures need to be put in place to reduce the impact on our economies,” Matambo warned SACU member states.

Matambo said a high and inclusive growth is a necessary condition for fully addressing such challenges. Meanwhile average Gross Domestic Product (GDP) for SACU according to the minister is projected at 3.4 percent in 2013. “While this is not sufficient the positive growth indicates resilience in our economies even though the rates are still lower than the pre-global economic crisis levels.” Infrastructure development has again been prioritised in member states national budgets, to stimulate growth and address unemployment, he said.