Times Of Swaziland: SACU RECEIPTS DECREASE BY E2.66BN SACU RECEIPTS DECREASE BY E2.66BN ================================================================================ Ntombi Mhlongo on 18/01/2025 07:17:00 MBABANE - Unlike last year, the Kingdom for Eswatini has seen a decrease in the amount of money generated from SACU receipts. During a press conference held yesterday, Minister for Finance Neal Rijkenberg announced that the Southern African Customs Union (SACU) revenue for the 2025/26 fiscal year will amount to E10.4 billion. This represents a significant decline of approximately 20.4 per cent from the E13.06 billion received in the current financial year, 2024/25 which was due to the hike in levies for importing certain vehicles, as well as from channelling fuel suppliers to import most of the commodity from South Africa instead of Mozambique. The revenue receipts from SACU finance reveals that more than 50 per cent of the national budget, is used by government for the construction of roads, building hospitals, buying medication, paying grants and civil servants’ salaries, among many other things. According to the minister, the reduction in SACU receipts for the new year is primarily attributed to lower-than-expected collections in the Common Revenue Pool (CRP) during the 2023/24 fiscal year. He said the under-collection was driven by a contraction in nominal imports into the union and reduced revenues from specific excise duties, particularly on cigarettes and tobacco products. Rijkenberg said the ongoing volatility in SACU revenues, driven by fluctuations in collections is expected to persist in the medium-term resulting in further volatility in the revenue from this source. Enactment He said to address this volatility, the Ministry of Finance established the Revenue Stabilisation Fund in 2023, following the enactment of its regulations by Parliament. “The fund currently holds a balance of E2.47 billion. Some of this will be used in the 2025/2026 budget to maintain stability of the fiscals. Government remains committed to addressing SACU revenue volatility through initiatives like the Revenue Stabilisation Fund, which is designed to cushion the nation’s finances against such fluctuations, ensuring that we can maintain fiscal stability,” he said. Interviewed after the press conference, the minister explained that the decrease should not cause panic, since the country now has something in the SACU Stabilisation Fund which was created to ensure that there is money to cater for years of deficits. “This means that in the year to come, we will take out some money out. It is more like a shock absorber, to keep us on a constant trajectory. The figures will be explained properly in the Budget Speech, but for now, yes, the receipts have gone down obviously and it is not nice but again we are in a better place if you consider that before we were receiving around E5 billion and E6 billion,” he said. Worth noting is that when the minister announced the E13.06 billion receipts for last year, he mentioned that they would start ‘feeling it in their pockets’. This was because when compared to the 2023/2024 level, the SACU revenue for 2024/25 was to grow by 11.15 per cent. In the 2023/2024 financial year, the country’s SACU receipts were E11.75 billion and were 102 per cent higher than the E5.8 billion of 2022/2023. SACU consists of Botswana, Lesotho, Namibia, South Africa and Eswatini. Shared All customs, excise and additional duties (trade taxes) collected in the SACU Common Customs Area are paid into the common revenue pool and shared among Member States. Member States’ share of the pool is disbursed or determined in accordance with the SACU agreement’s revenue-sharing formula. The current Revenue Sharing Formula has three components; namely, the Customs Component, Excise Component and the Development Component. The Customs share is allocated on the basis of each country’s share of intra-SACU imports. Some of the factors that had led to the increase were that Eswatini’s imports from SACU during the year under review had increased by 25.24 per cent compared to the previous year. It was at that time that Rijkenberg announced that part of the receipts were to be directed to the Revenue Stabilisation Fund which was established to reduce the country’s overreliance on SACU receipts. Government put some of the receipts into the fund, which generates interest and would be utilised, should the country face fiscal crises that may be caused by the fluctuating SACU receipts. Last year, the minister announced that the country would put E1.5 billion into the fund. Meanwhile, last week, the Kingdom of Eswatini received the final E3.26 billion of SACU receipts for the outgoing year. This amount represents the last tranche of the E13.06 billion receipts for the financial year ending 2024/2025. Our sister publication, the Times of Eswatini reported that the first trench arrived at a fortuitous moment, as schools are about to reopen and government must fund 601 primary schools through the free primary education (FPE) initiative, while also covering the education costs for some orphaned and vulnerable children (OVCs). The funding for the FPE programme encompasses the education of all public primary schools, while the OVC grant covers school fees for pupils from disadvantaged backgrounds. For each pupil enrolled in a public school, government allocates a minimum of E672, with E194 million earmarked for the OVC fund to provide E1 950 for each child attending school. There are over 850 public schools in the country, with 601 of them serving as primary learning centres. Prioritise A larger share of the SACU receipts has, in the past three quarters, been utilised to help government prioritise its responsibilities, which include rendering services across its various portfolios. It is a documented fact that government has recently invested a substantial portion of its resources into revitalising the public health sector. It is worth noting that government has fallen behind in payments to several service providers, including utility entities such as the Eswatini Electricity Company (EEC), Eswatini Posts and Telecommunications Corporation (EPTC) and Eswatini Water Services Corporation (EWSC). Flagged Several ministries have been flagged in the Financial Audit Report on the Consolidated Government Accounts of the Kingdom of Eswatini for the financial year ending March 31, 2023, compiled by the Auditor General, Timothy Matsebula, for owing these State-owned enterprises (SOEs). Additional suppliers owed by government include those providing consumables and services through microprojects under the Ministry of Economic Planning and Development. It is noteworthy that the country is heavily reliant on SACU receipts to fund its budget.As a result, when government sets its budget for the year, it projects revenue collections, which include the SACU receipts. Another source of revenue government relies on to fund the national budget is tax collection and other income streams, such as fines.