PUT SACU TO EFFECTIVE USE

THE country’s tenure as Chair of the Institutions of the Southern African Customs Union (SACU) has come and gone; it ends in a fortnight. It can be said that it was a fruitful term for the local office as it coincided with the highest ever share of receipts for the country, which realised a E11.5 billion return. Those visiting the country this week would be forgiven for questioning where all the money had gone, considering the public protests over the shortage of drugs and medical supplies in our health facilities. A stark contrast indeed, but delegates to the SACU Summit would generally not be surprised because the receipts were never really intended for the day-to-day expenses of our governments. It has more to do with building each member country’s capacity and infrastructure to increase trade in the region than consumption.

Uninitiated

For the uninitiated, SACU is not a piggy bank, but a trading block of five countries, namely Eswatini, South Africa, Botswana, Lesotho, and Namibia.
Its mission is to serve as an engine for regional integration and development, industrial and economic diversification, the expansion of intra-regional trade and investment, and global competitiveness. It is currently operating under a new Strategic Plan (2022-2027) endorsed by the summit in June last year, which is structured around six core strategic pillars, namely: Industrialisation, export and investmentpromotion; trade facilitation and logistics; implementation and leveraging of AfCFTA Opportunities; trade relations/unified engagement with third parties; finance and resource mobilisation; and effectiveness of SACU institutions.

The extent to which we gauge the value of SACU should ideally be based on how the country has actively engaged in each of these pillars. One that stands out is trade facilitation and logistics, which seem to have played a significant role in the improvement and yielding good returns. Credit must be given where it is due, though, and that lies with the Ministry of Finance and relevant stakeholders for putting in place the measures and systems that have ensured better accountability for goods moving in and out of our borders.

Declaring

Getting people to simply leave receipts at the border has worked well towards declaring goods at the border. These efforts, and others, were recognised by the SACU Chairperson, His Majesty the King, at the summit yesterday, where he explained what led to the recent windfall. He attributed it to the higher than projected outturn of the 2021/2022 common revenue pool (CRP), together with the 25 per cent increase in the projected size of the CRP for 2023/2024 compared to the 2022/2023 financial year. The increase in Eswatini’s share of total intra-SACU imports from 9.6 per cent in the revenue sharing framework for 2022-2023 to 10.8 per cent in 2023-2024 was also a contributing factor.

 He further highlighted that the measures that our Ministry of Finance has been implementing in order to enhance intra-SACU imports have started paying off. SACU Executive Secretary Thabo David Khasipe has announced further incentives for tax-compliant businesses, which stand to increase the revenue pool if complied with. This is being done through the Authorised Economic Operator (AEO) programme, described as a flagship customs-business partnership. It basically provides red carpet treatment for customs and tax compliance businesses to expedite and reduce the cost of doing business in all the SACU countries. Let’s take full advantage of this opportunity, as we did with building compliance with other requirements of trade in SACU.

It hasn’t been easy, though, for our Finance Ministry, as this called for getting big fuel companies like Galp to reduce the volumes of fuel imports from Mozambique and increase those from within the SACU pool in South Africa, albeit with glitches from time to time. This led to numerous fuel shortages that agitated motorists and almost crippled fuel retail businesses for some. Many import vehicle sales also took a hard knock when the Finance Ministry drastically reduced the permissible number of import ‘grey’ vehicles commonly known as ‘Dubais’.

Going forward, we need to derive full benefit from the activities of SACU, such as the directive to the council from the previous summit to ensure food security. It was called upon to prioritise fertilisers, agrochemicals, and seed production. We cannot have a region that grows hungry when organisations such as SACU can help facilitate the manufacture of farming implements and related inputs. To address the health challenges, we need to industrialise the sector by using SACU funds to build pharmaceutical production companies.

Cross-border value chains among all SACU member States can resolve the job creation crisis and avert migration. Countries in the Southern African region have been called upon to increase their share of global trade from a mere three per cent. However, this is only possible if the resources are directed towards the core objectives of the customs union. Well done for the fruitful term Eswatini.

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