SACU ministers tackle thorny issues

MBONGENI MGUNI
Staff Writer | Friday June 28, 2013 00:00

A SACU statement released on Wednesday indicates that the ministers will tackle touchy topics such as the revision of the revenue sharing formula, management of the Common Revenue Pool and trade talks with the European Union.

'The Council of Ministers will receive a report on the review of the revenue sharing arrangement which considered member states proposals on a new revenue sharing arrangement, and the use of the variation of Leith model to estimate the cost raising/lowering effect in member states,' the SACU secretariat says in the statement.In April, SACU ACU executive secretary Tswelopele Moremi told BusinessWeek that states had already agreed that whatever the new formula, no member should be worse off under the new arrangement.She said countries had agreed that allocations should be developmental in focus and not simply distributive and also that the revenue sharing arrangement should promote economic convergence among member states.While today's meeting will see ministers consider the latest proposals on the formula, the council is only expected to reach a final decision at a key meeting in December. Secretariat officials also said ministers at today's Windhoek meeting would receive an update on progress towards a long-term arrangement on the management of the Common Revenue Pool (CRP).

The CRP is made up of revenue inflows from the Common External Tariff applied by the member states on imports into the union and excise duty collected on excisable products.At present, South Africa continues to manage the pool although it should have ceased in July 2006, according to the union's 2002 Agreement. The regional giant's management of the CRP has been extended since then, as members negotiate its future administration.It is understood SACU legal and finance experts met earlier this month in Johannesburg to consider a draft amendment to the 2002 agreement's provisions on the CRP's management.

Other issues due to be discussed in Windhoek include the SADC-EU Economic Partnership Agreement (EPA) talks, which were recently held in Gaborone.'Ministers (in Gaborone) agreed that the aim should be to conclude negotiations as quickly as possible to ensure uninterrupted market access to the EU,' the SACU secretariat's statement reads.'At the same time, senior officials should engage the European Commission on this matter to seek clarity on what is required to implement the EPA provisionally.'The EU, next October, plans to revoke a six-year old market access directive under which 36 African, Caribbean and Pacific states, including Botswana and other SADC countries, will lose the duty and quota free access to the EU market they are currently enjoying.The EU will also revise a preferential trade scheme covering several African countries, on January 1, 2014 as part of its overall efforts to push for a fully reciprocal EPA.The SACU secretariat said today's meeting would also receive an update on the work of the Industrial Development Policy task team whose mandate is to develop a framework ensuring that the value generated in the union translates to the balanced industrial development of the five members.Smaller members have long argued that the union has almost singularly benefited South African industry, with the external investors who are drawn in by the large market and incentives provided by SACU, almost exclusively opting to establish themselves in more developed South Africa.

Trade and Industry Minister Dorcas Makgato-Malesu is on record as saying Botswana would push to ensure value is evenly spread via industrialisation within the customs union.'As far as industrialisation is concerned, we have not reaped the benefits that we could have,' she told a consultative forum in Gaborone last year.'Our focus is to fight for a common industrialisation policy that's of benefit to all and I believe we are making progress in that regard'.