02 Jul 2018

Southern African Customs Union (SACU) member states leaders have been urged to set the political tone and strategic direction in order for the bloc to remain relevant.

The outgoing SACU chairperson, President Mokgweetsi Masisi made the call when officially opening the sixth SACU Heads of State and Government Summit held in Gaborone on June 29.

Mr Masisi said political and economic development at the global, continental and regional levels made this urgent,adding that some such developments  were expected to adversely impact the economies of the SACU bloc.

“In this respect, it is critical to note that global economic growth remains subdued even though it is expected to moderately improve in 2018, compared to the previous year,” he said.

President Masisi said such performance would largely be driven by, among other factors, the strong trade growth and the continued economic growth in the developed economies, especially the United States of America and the emerging markets led by China.

He, however, noted that economic growth was projected to improve slightly over the medium term, although there was increasing risk to the economic outlook arising largely from rising protectionist policy measures that sought to threaten the architecture on which the multilateral trading system was based.

Such developments, he said were likely to result in retaliatory trade measures among trading partners that may in turn result in trade wars with far reaching implications for the global multi-lateral trading system, which he said had direct bearing on SACU.

“It is therefore imperative that we respond to these challenges proactively, collectively and strategically, given our common interest as a Customs Union,” he said.

He further said there was need to transform SACU into a 21st century strategic vehicle that could successfully enhance development of the region, through visible transformation of economies.

Thus, he appealed for interventions, whether political or economic, to be translated into actions with tangible results that would benefit the citizenry of the SACU bloc.

To that effect, he said heads of states should provide the necessary direction to relevant entities of SACU to ensure that it remained on course in achieving its vision and to deliver on its mandate.

President Masisi also called for consolidation of SACU trade agenda, so that the organisation could leverage its position in other forums, including Southern African Development Community (SADC), the African Union (AU) as well as on the global arena.

He said the decision to align SACU’s work programme on regional industrialisation to the SADC Industrialisation Strategy was commendable, as it enabled countries to rationalise their limited human and financial resources, thus enhancing the possibilities for regional industrialisation.

President Masisi also reaffirmed SACU’s commitment to ensuring conclusion of its work programme as intended and within the agreed timelines.

The work programme entailed, among others, review of the revenue sharing formula and the long term management of the common revenue pool, review and development of a suitable architecture for tariff-setting, rebates, duty drawbacks and trade remedies, strengthening existing cooperation as well as collaboration on trade facilitation to improve border effectiveness.

It also entailed establishment of a stabilisation fund and exploring feasibility of financing mechanism for regional industrialisation as well as the development of public policy interventions to promote industrial development and value chains.

Meanwhile, eSwatini’s King Mswati III, President of Namibia, Dr Hage Geingob, President of South Africa, Mr Cyril Ramaphosa and Lesotho Prime Minister, Dr Thomas Thabane, SACU secretariat executive secretary, Ms Paulina Elago as well as senior government officials attended the summit. ENDS