LET US MILK SACU CASH COW

Sir,

Contrary to the popular economic view that Eswatini should strive to reduce dependency on Southern African Customs Union (SACU) receipts, I suggest all economic activity should be aligned towards maximising our share from the SACU revenue. Given that in the 2020/21 budget, SACU receipts covered close to the total cost of government wages and salaries and about half of the wage bill in 2021/22, Eswatini having received about E2.1 billion from the golden cow in January 2021, it is obvious that a fatter cheque from this arrangement could solve many of the financial challenges faced by the country.

Silence

A fatter cheque from SACU could put to rest the protracted CoLA rigmarole and silence much of the hullabaloo surrounding drugs shortages in health facilities, shortage of teachers and nurses, hiring freeze, insufficient scholarship funds, free education, and grants for elderly and people with disabilities. Recently, it was reported that The Kingdom of Eswatini assumed chairmanship of the SACU Summit, Council of Ministers and Commission, from July 15, 2022 to July 14, 2023. Eswatini took over from Botswana, who held the SACU chair from July 15, 2021 to July 14, 2022, with the  chairmanship rotating among the member States in alphabetical order. This latest rotation means that the Minister of Finance, Neal Rijkenberg, is the chairperson of the SACU Council of Ministers, while the Principal Secretary (PS) in the Ministry of Finance, Sizakele Dlamini, chairperson of the SACU Commission. This is our year. Eswatini has indeed laid its hands on the golden goose.

Source

According to the minister of Finance, SACU receipts remain an essential, though very unstable source of revenue as at half-year of the 2020/21 financial year, the country had received E4.1 billion from SACU compared to the E3.16 billion in 2019/20, a 32 per cent increase in SACU receipts. To achieve higher growth rates in the SACU revenue source, some short-term measures were applied including reducing the age restriction of second-hand motor vehicles from outside SACU and minimising as far as possible the importation of petroleum products from outside SACU. Why not find more creative ways, such as the revival of the mining sector and establishment of a pharmaceutical plant, to milk this golden cow for more.

Ambition

Given that His Majesty the King is the current chairman of SACU and has recently expressed his ambition of bringing programmes, including industrialisation, which will make the union strong and develop its member States, Eswatini is in pole position to maximise benefits from this golden goose. Even the revenue sharing formula is now set and clear, according to the chairman. Therefore, it is my view that all economic effort in Eswatini be directed towards milking this cash cow for all its worth.
KS Mnguni

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