Last week, finance ministers from SACU countries met to pave the way forward for the Council of Ministers' summit. The summit is expected to grapple with the all-important issue of SACU revenue-sharing. There is widespread belief on the ground that the talks could signal a make or break for SACU. Labour unions and other interested public in the Republic of South Africa have made it known that they are currently against the skewed revenue-sharing formula that does not favour South Africa. As it is South Africa contributes significantly to the SACU pool and the unions have stated that they do not think that South Africa gets a fair value given her contribution. Some in South Africa have expressed a sentiment that South Africa is in fact subsidising other SACU members. To compound matters, SACU pays out about P 500, 000, 000 to all other SACU members in recognition of the fact that they are relatively underdeveloped. However, after the 2006 agreement, the figure has been adjusted to a percentage (15 percent) and this is adjudged to be still high. This has incensed some sections of the South African public who feel that Pretoria is subsidising middle-income countries like Botswana and Namibia, which are beneficiaries of the Development Fund. Over the last few years the SACU revenue has been a significant contributor to Botswana's fiscus, providing about 25 percent of the national budget. Between 2006 and 2009 Botswana received an average of P9.3 billion from the SACU pool. This helped to balance the books at a time when the mineral sector was hardest hit by the world economic meltdown. The SACU revenue has even overtaken other sectors such as the beef industry. It is hoped that this year the SACU revenue will contribute about P8 million to the fiscus. This is very significant given that government has literally abandoned and scaled down on a number of projects due to lack of funds. In the event that the South Africans push ahead and implement the new SACU revenue-sharing formula all the other countries, including Botswana, will lose much of the revenue they have been able to receive from SACU. Countries like Lesotho and Swaziland will collapse as their economies rely to a greater extent on the SACU revenue. It is also true that even Botswana will be greatly affected given her reliance on imports from South Africa. There is an apprehension that the new formula has the potential to break up the world's oldest customs union. South Africa, too, stands to lose not just morally but also on the vast exports that literally collapsed infant industries in the other SACU member states. South Africa needs the markets in the SACU countries and to repay them for their loyalty that served under SACU even during the apartheid era when the tariff structure disadvantaged them for several decades.
Today's thought
