ESWATINI SET TO RECEIVE FINAL E3.26BN SACU RECEIPTS TODAY

MBABANE – Today, the country is set to receive the final E3.26 billion of SACU receipts.
This amount represents the last tranche of the E13.06 billion in Southern Africa Customs Union (SACU) receipts for the financial year ending 2024/2025. SACU comprises Botswana, Lesotho, Namibia, South Africa and Eswatini. All customs, excise and additional duties (trade taxes) collected in the SACU Common Customs Area are paid into a common revenue pool and subsequently shared among member States. The distribution of the member States’ share from the pool is disbursed according to the revenue-sharing formula stipulated in the SACU agreement. The current revenue-sharing formula consists of three components: The customs component, the excise component and the development component. The allocation of the customs share is based on each country’s proportion of intra-SACU imports. Compared to the 2023/2024 figures, SACU revenue for 2024/25 has increased by 11.15 per cent.

Received

In the 2023/2024 financial year, the country’s SACU receipts totalled E11.75 billion, which was 102 per cent higher than the E5.8 billion received in the 2022/2023 financial year.
The SACU receipts 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. In the previous year, Minister for Finance Neal Rijkenberg stated that of the E13.06 billion, approximately E1.8 billion represented surplus revenue collections from the 2022/2023 financial year, while E11.26 billion was derived from the projected common revenue pool for 2024/2025, which had increased by 6.6 per cent compared to the 2023/2024 level.  He explained that one of the contributing factors to the increase was that Eswatini’s imports from SACU had risen by 25.24 per cent during the year under review. When the revenue increase was announced, Rijkenberg mentioned that part of the receipts would be allocated to the Revenue Stabilisation Fund, which was established to mitigate the country’s overreliance on SACU receipts. Recently, Rijkenberg remarked that the Stabilisation Fund was stable, with over E2 billion invested in it. He indicated that the Stabilisation Fund would assist the country in meeting a number of its obligations and explained that without it, 2025 would likely have been a challenging year.

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).

Owing

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 micro-projects under the Ministry of Economic Planning and Development. It is noteworthy that the country is heavily reliant on SACU receipts to fund its budget. Therefore, 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. Due to the country’s significant dependence on SACU receipts, a source within the Ministry of Finance explained that the demands were present across all sectors in which government provides services, including payments for social grants (elderly, disability, FPE and OVCs). The source noted that the challenge lay in the fact that government had not yet begun accumulating revenue from other avenues, which created pressure and resulted in limited resources to cater to various social responsibilities.

Post your comment

Your name:

Your e-mail address:

Add your comments:

Please enter the code you see in the image:

Image:

Code: