‘Le­sotho should re­tain SACU rev­enues’

Lesotho Times - - Business - Bereng Mpaki

THE im­pend­ing re­vi­sion of the South African Cus­toms Union (SACU) rev­enue-shar­ing agree­ment among mem­ber states should not leave Le­sotho worse off than it is at the mo­ment, the govern­ment has said. This was said by Trade and In­dus­try Min­is­ter Joshua Setipa ( pic­tured), in an in­ter­view this week, fol­low­ing his par­tic­i­pa­tion in the SACU Min­is­te­rial Re­treat that was held in South Africa on 20 June 2016. The re­treat was at­tended by the Fi­nance and Trade min­is­ters from the SACU mem­ber states, namely Botswana, Le­sotho, Namibia, South Africa and Swazi­land. Chaired by South African Fi­nance Min­is­ter Pravin Gord­han, the re­treat was meant to pro­vide an op­por­tu­nity for the min­is­ters to re­flect on how to move the SACU Agenda for­ward in ac­cor­dance with a roadmap which was ap­proved by the SACU heads of state and gov­ern- ment in Novem­ber 2015 in Wind­hoek, Namibia.

“The meet­ing was in prepa­ra­tion for the up­com­ing sum­mit of the SACU heads of state and govern­ment sched­uled for some­where be­tween this month and Au­gust,” said Mr Setipa.

“The meet­ing took stock of the sta­tus of the im­ple­men­ta­tion of the SACU work pro­gramme to in­form that sum­mit. The work pro­gramme in­cludes a re­view of the rev­enue shar­ing agree­ment, trade fa­cil­i­ta­tion, and uni­fied en­gage­ment in the trade ne­go­ti­a­tions, re­gional in­dus­trial de­vel­op­ment pol­icy, and de­vel­op­ment of SACU in­sti­tu­tions.”

He said the re­treat was based on the re­cent bi­lat­eral con­sul­ta­tions un­der­taken by South African Pres­i­dent Ja­cob Zuma with the SACU heads of state and govern­ment in his ca­pac­ity as SACU Sum­mit chair­per­son.

Mr Setipa said while the rev­enue shar­ing for­mula was ex­pected to be re­viewed in the near fu­ture, the govern­ment wanted to en­sure Le­sotho’s share would not be re­duced af­ter the ne­go­ti­a­tions were com­pleted.

“Our po­si­tion as the govern­ment is that what­ever hap­pens dur­ing the re­view of the rev­enue­shar­ing ar­range­ment, we should not be left worse off in the end,” he said.

“We hold this view be­cause our share of the rev­enue has de­clined sig­nif­i­cantly in re­cent years due to the weak eco­nomic per­for­mance of the re­gion.”

Le­sotho’s share of SACU rev­enue has been steadily de­clin­ing over the pre­ced­ing years due to a slow­down in the per­for­mance of the global econ­omy. The 2016/2017 SACU rev­enue share is es­ti­mated to ac­count for 32 per­cent of Le­sotho’s bud­get - down from 42 per­cent in 2014/15.

Ac­cord­ing to the SACU web­site, the cur­rent rev­enue shar­ing for­mula has three com­po­nents, namely the cus­toms com­po­nent, ex­cise com­po­nent and the de­vel­op­ment 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 gross do­mes­tic prod­uct (GDP). The de­vel­op­ment com­po­nent, which is fixed at 15 per­cent of to­tal ex­cise rev­enue, and is dis­trib­uted ac­cord­ing to the in­verse of each coun­try’s GDP per capita.

Mr Setipa said the min­is­te­rial re­treat was con­vened af­ter two years with­out hold­ing the meet­ing.

“Last month’s min­is­te­rial re­treat marked the re­turn to work by the in­sti­tu­tion which had not sat over the past two years. And I be­lieve we are go­ing to see progress go­ing for­ward,” he added.

A state­ment re­leased by the SACU Sec­re­tariat af­ter the min­is­te­rial re­treat reaf­firmed their com­mit­ment to SACU’S vi­sion and the im­por­tance of the cus­toms union to their economies.

“The min­is­ters also agreed to con­tinue en­gage­ment on the SACU Agenda, tak­ing into ac­count pre­vail­ing re­gional and global eco­nomic de­vel­op­ments, with a view to seize op­por­tu­ni­ties and strengthen in­te­gra­tion,” the state­ment read.

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