12 Apr 2022

President Dr Mokgweetsi Masisi has called for the improvement and democratisation of the Southern African Customs Union (SACU) revenue sharing regimen as a matter of urgency.

“We must understand that SACU came from a political system that was oppressive, and produced this revenue sharing formula which is beholden and excludes other member states, so there is inequity.

We need to democratize it, make it transparent,” he said when welcoming SACU executive secretary, Ms Paulina Elago to the Office of the President yesterday.

Instead of being the exclusive preserve of one member, Dr Masisi suggested that the capacity to distribute revenues and set tariffs be located within the secretariat, where all five member states had a say.

The President, who is the current SACU chairperson, stated that revenue sharing and tariff setting issues were fundamental to the stability of the organisation.

“The heartbeat, the nerve centre system of SACU lies in the revenue sharing formula and tariff setting,” Dr Masisi said.
He said as long as the issues were outside the organisation’s framework, no traction would be gained.

“We could talk about trade facilitation, even financing, opportunities, but these should not be undermined by the issue of revenue sharing and the rules to set the tariffs,” said Dr Masisi.

He said the underlying discrepancies found in the revenue sharing and tariff rules presented different levels of opportunity for member states and therefore needed to be discussed and resolved.

“It is a hard question, but we have to deal with it, and I am prepared and willing for it to be part of the agenda for the summit. We need to face it head on, just be brutally honest,” President Masisi said.

He lamented that the enthusiasm  shown in acceding to the  Africa Continental Free Trade Agreement (AfCFTA) was lacking when it came to dealing with the problems that besieged SACU.

Being the world’s oldest customs union, he said, SACU stood on the threshold of being exemplary globally and thus needed to rise up to the challenge by democratising.

On another issue, offered to host the organisation’s next summit in June.

He thanked SACU for the opportunity to officiate at the ongoing investment roundtable in Gaborone which he said afforded member states: Botswana, Eswatini, Lesotho,  Namibia and South Africa, a business-to-business interaction environment.

Dr Masisi said the roundtable, which ends today, gave members an opportunity to improve potentially beneficial trade sectors and address trade imbalances between states.

For her part, Ms Elago revealed that a SACU strategic plan had been finalised and was currently under consideration by the organisation’s council of ministers.

She said the revenue sharing formula issue as well as regional industrialisation with a view of taking advantage of opportunities afforded by AfCFTA formed part of the plan.

SACU was founded in 1910 by the then Union of South Africa together with the three British high commission territories of Bechuanaland, Basutoland and Swaziland (colonial Botswana, Lesotho and Eswatini respectively).

Namibia formally joined SACU after independence in 1990 but had effectively been part of the union since the League of Nations mandate to end German rule in the then South West Africa put the territory under South African control. ENDS