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SACU roadshow a success

1Finance Minister Thlohang Sekhamane

MASERU- Southern African Customs Union (SACU) held very successful roadshow in Lesotho from March 22 to 23 2017 where the SACU Secretariat met with members of the media, captains of industry and government to discuss ways in  which the intra-regional trade body can have its activities known and utlitised by governments and private business operators in the five-member countries.

The five-member intra-regional body consists of Namibia, South Africa, Botswana, Swaziland and Lesotho and looks at revenues collected from goods imported from other non-member countries and the revenue is administered and shared by the SACU Secretariat in Windhoek, Namibia.

In an address to members of the media at the beginning of the roadshow, SACU Executive Secretary (ES) Paulina Elago emphasized the importance of disseminating information about the activities of SACU within member countries so that citizens may be aware of what is taking place as well as governments within the respective countries taking action from the developments taking place among the trading partners.

It was however, noted by Media Institute of Southern Africa (Misa-Lesotho) director Tsebo Matšasa that very little was being reported about SACU in the local media. Journalists who were present at the meetings, however, expressed willingness to share out the information on SACU activities provided the secretariat made it available.   

In her address, the SACU ES Paulina Elago noted that according to the 2017 World Bank Doing Business Survey, Namibia and South Africa ranked high at No. 127 and No. 139, respectively,  out of 179 countries  while the other three – Botswana (51); Lesotho (39) and, Namibia (127) ranked lowly. According to Elago, such studies show that there was need to improve service provision at the member-countries’ ports of entry for imported goods from other countries.

“The survey shows improvements in some of the countries like Botswana, Lesotho and Swaziland, whilst there is room for improvement for countries such as Namibia and South Africa. A point to note however that, South Africa and Namibia are coastal countries and carry sea cargo that is destined for Botswana, Lesotho and Swaziland, amongst others,” she said.

She said to improve the rankings on the Doing Business Survey SACU member-countries will require collaborative efforts from all stakeholders, including ports authorities  to improve efficiency in the movement of goods in the region.

Elago said this can only be done through concerted efforts to address bottlenecks and constrains in the key focus areas of: Release and clearance of goods; Border cooperation; Procedures on importation and exportation of goods; Freedom of transit; and Customs cooperation.

Lesotho Finance minister Tlohang Sekhamane said SACU has played a critical role in the development of the region and, in particular, the less developed member states such as Lesotho through the revenue sharing mechanism and free trade and development of the private sector.

Sekhamane said SACU has enabled the Government of Lesotho to mobilise financing of up to 60 percent of its annual GDP since the commencement of the revenue sharing arrangement under the new SACU Agreement of 2002.

“Alongside these revenue shares, Lesotho has benefitted immensely from the free trade offered by the Customs Union through zero-rating of all imports of goods and services from the other members, especially South Africa, which remains the main source of Lesotho’s imports. To a large extent, therefore, the Customs Union has contributed to the development of Lesotho’s private sector and to the growth of her economy as a whole,” he said.

The Finance minister however, warned that past experience by less-developed members of the regional body had been an awakening call for them as they had lied too much on SACU revenues for their slice of the cake as the global economic downturn 2008 had eroded part of their share since not many developing countries were exporting.  

Giving Lesotho’s experience in this scenario Sekhamane said: “From 2005/06 when we started to apply the new Revenue Sharing Formula under the 2002 Agreement, until 2009/10, Lesotho enjoyed growth in SACU revenue shares at an average 30 percent per annum. But in the advent of the global financial and economic crisis, we saw a dramatic decline in SACU revenue receipts, which led to serious macro-economic and fiscal challenges for our country.”

The challenges, he said, have led to lower customs receipts and hence lower customs union receipts and therefore called for innovative ways of sustainability, led by the private sector. However, the private sector itself have found doing business in land-locked countries such as Lesotho much more challenging than their counterparts with ports where goods from Europe, Asia or the USA come directly and where it is easier for them to process their exports

At the roadshow, the Private Sector Foundation of Lesotho gave a presentation highlighting the challenges faced by the private sector when trading in the SACU region.

Chief Executive Officer Thabo Qhesi told the meeting that in Lesotho the private sector businesses did not take part in the SACU regional trade because they lacked information about the business procedures and requirements.  He gave examples of a small-holder farmer in Mokhotlong who wants to export goats to Kwazulu Natal in South Africa.

“After getting the veterinary certification which attests that the goats are healthy and fit to be exported, this farmer is compelled to go to Pretoria in the Department of Agriculture, Forestry and Fisheries in order to get export permit.

“Taking into account the distance from Mokhotlong to Pretoria, it is around 548 km for singly trip. When counting the return trip, it is approximately 1,096km and is a costly process for the small-holder farmer to do export business into other SACU member state,” he said. 

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