Southern African governments confirm SACU commitment

28 July 2010

28 July 2010 | Nick Martindale

Heads of state and government leaders of the countries in the Southern African Customs Union (SACU) have allayed fears the body could be on the verge of collapse with a reaffirmed commitment to the organisation.

Concerns over the 100-year-old group followed the decision by Botswana, Swaziland and Lesotho in 2009 to establish trading arrangements with the EU.

The commitment is good news for buyers in the region who currently enjoy free trade among the five member countries, which also include South Africa and Namibia.

A SACU spokesman told SM that the issue of the trade deal with the EU was not discussed at the conference earlier this month but said the heads of state had agreed that SACU would be transformed into “a vehicle for regional economic integration capable of promoting equitable development”.

He added: “The heads of state and government recognised the role that SACU can play in southern Africa as a building block for deeper regional integration, given its level of integration.

“One can deduce that the (political leaders) have great confidence in SACU and are definitely convinced of not only its survival but its progressing beyond simply a customs union.”

Sheila Kiratu, a researcher at the South African Institute of International Affairs, said SACU was now likely to move towards establishing policies to improve trade between members, such as adopting a common competition policy and approach towards companies investing in the region.

The conference also failed to address the future of the revenue-sharing mechanism, which is currently heavily subsidised by South Africa, or the possibility of expanding membership to other countries such as Angola or Mozambique.

Kiratu said the fact that revenue-sharing was not discussed meant it was “business as usual” for the region’s buyers.

She said: “Tariffs will not be changed in the short term which offers the sense of predictability and security that investors desire. However, in the medium to long term the revenue-sharing formula may be amended.”

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