Southern Africa: SACU's Uncertain Future Featured

opinion

In the coming weeks, members of the Southern African Customs Union (SACU) are set to hold an urgent meeting, which has been billed as a "make-or-break conference for the struggling union". Although this particular meeting is being organised at South Africa's request, it appears to be the culmination of an extended period during which various members have expressed frustrations regarding the operation of the Union.

SACU is the oldest existing customs union in the world, having arisen out of an agreement concluded in 1889. The most recent SACU agreement was concluded in 2002, after almost 8 years of negotiations, and was subsequently implemented in 2004. SACU has five member states, namely Botswana, Lesotho, Namibia, South Africa and Swaziland. The nature of a customs union means that these countries operate as a free trade area, behind a common external tariff. In addition to this, SACU also operates as an excise union and all SACU members apart from Botswana are integrated into the South African money and capital market. The 2002 SACU Agreement covers three main areas: governance and administration, economic policy and regulatory issues, and revenue sharing. The primary goal of this agreement is to facilitate the development of common policies and strategies among the member states, while also ensuring an equitable distribution of revenue from customs, excise, and additional duties.

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