SACU revenue formula by December

Southern African Customs Union (SACU) is hoping to have made ‘considerable progress’ on the stalled revenue sharing formula by the end of the year. The formula has been a topical issue among member states with no concrete solution in place since it was first negotiated more than three years ago.

“Negotiations take time. Even the current revenue sharing formula took us more than eight years to conclude,” said SACU Commission Chairperson Dr. Taufila Nyamadzabo on the sidelines of meetings for senior officials from the Union in Gaborone. “I think we will agree on certain elements before the year end. This is not a deadline per-se,” said Nyamadzabo, who is also Botswana Secretary for Economic Affairs.

On Monday and Tuesday, senior government officials from finance and trade ministries from five members states deliberated on issues ranging from regional integration, revenue sharing formula, and industrialisation policy among others. “There are still differences among members states especially regarding the sharing formula,” said an official from South Africa’s trade and industry ministry (DTI). The official who could not be named explained that differences also emanate from the three components of revenue sharing formula- excise, customs, and development.

“If any agreement of some sort is reached, we could see smaller and less developed countries such as Swaziland and Lesotho benefitting more than they are getting currently,” said the source. South Africa, which contributes more than 90 percent of SACU Gross Domestic Product (GDP), is apparently pushing for more shares from the customs revenue pool. In 2011, SACU council of ministers rejected a study by Australia Centre for Economics on how ‘best’ the revenue sharing formula should be devised. A task force made up of senior officials from trade and finance ministries, which report to the council of ministers has since been established to draw an ‘acceptable’ formula. Countries have been asked to make proposals on the formula.

“Even last month some countries were still making their respective proposals,” Nyamadzabo said in a post press conference interview. Meanwhile, Executive Secretary for SACU told local journalists earlier this week that the 4th SACU Summit will provide a perfect chance for member countries to deliberate on issues of common interest especially regional integration. “We have to ensure there is equitable development among members,” said Tswelopele Moremi. On Wednesday council of ministers for SACU met to discuss various issues of common interests ahead of the summit on Friday. Formed more than 100 years ago, SACU’s main objective is to enhance economic diversification, development, industrialisation and competitiveness among members.