SACU stalls revenue formula talks

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Timo Shihepo

Windhoek – The Southern African Customs Union (SACU) has denied that the negotiations of its 2002 reve-nue-sharing model are set to take place this month.

The SACU revenue-sharing for-mula, which was first implemented in December 2004, is used to col-lect revenue from intra-SACU trade, including re-exports for member states comprising Botswana, Leso-tho, Namibia, South Africa and Swaziland.

The current formula has, how-ever, been under scrutiny ever since South Africa started complaining that it does not get the revenue it deserves from the SACU common revenue pool despite being the larg-est contributor.

South Africa’s Finance Minister, Nhlanhla Nene, earlier told parlia-ment that the negotiations for the revenue-sharing model were set to begin this month.

Speaking briefly to The South-ern Times, this week, SACU Cor-porate Communications Manager, Kungo Mabogo, said negotiations have not happened and are not going to happen this month, but hinted that they might start at the SACU Summit of Heads of State and Government in June.

The Summit is expected to take place from June 25 to 29 in Botswana.

The Southern Times also learned that a meeting comprising officials from the member states took place in Windhoek, Namibia, last week. Mabogo denied that the meeting was about the revenue-sharing for-mula or negotiations thereof. She said the meeting related to the min-isterial technical task teams.

“Yes, there was a task teams’ meeting. I don’t know what they discussed, but I am also not aware that the revenue sharing formula negotiations have begun. A lot of things will be discussed at the sum-mit in June. That’s what’s impor-tant and the media will be invited to attend and cover the proceed-ings,” said Mabogo.

The review of the agreement is expected to extend over two years. Various options will be considered to achieve the development objec-tives of SACU.

SACU’s objectives include facili-tating cross-border movement of goods between member states and creating effective; transparent and democratic institutions to ensure equitable trade benefits to member states; promoting conditions of fair competition in the common cus-toms area and increasing invest-ment opportunities in the common customs area.

The current revenue-sharing formula has three components, namely the customs component, excise component and the devel-opment component.

The customs share is allocated on the basis of each country’s share of intra-SACU imports. The excise component is allocated on the basis of each country’s share of the Gross Domestic Product (GDP).

The development component, which is fixed at 15 percent of total excise revenue, is distributed according to the inverse of each country’s GDP per capita.

The review process of the rev-enue-sharing arrangement has followed a three-stage approach, which entailed, firstly, identifi-cation of areas requiring further study in the current revenue-shar-ing arrangement; secondly, an independent examination of the identified areas; and thirdly, a pro-cess of negotiation to reach con-sensus on a new revenue-sharing arrangement.

“The review of the revenue-shar-ing formula is to be conducted in such a way that it not only sup-ports the institution and member states in the attaining their respec-tive developmental objectives but also does not negatively impact the socio-economic stability of SACU member states,” South Africa’s Finance Minister Nhlanhla Nene earlier told parliament.

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