THANKS A LOT, SA

Finweek English Edition - - Economic trends & analysis - HOWARD PREECE

NAMIBIA RAN SUR­PLUSES on its cur­rent ac­count of the bal­ance of pay­ments each year be­tween 2003 and 2006 – and is ex­pected to main­tain that trend in 2007/2008. Ul­ti­mately, it’s very much a mat­ter of “thank you, South Africa”.

Namibia’s trade bal­ance plus/mi­nus the ser­vices ac­count was, or is pro­jected to be, in the red for all six years. How­ever, Namibia has been a con­sis­tent re­cip­i­ent – as have Botswana, Swazi­land and Le­sotho – of trans­fer pay­ments from SA in terms of the South­ern African Cus­toms Union (Sacu) agree­ment.

For 2006/2007 SA paid out R25,2bn from its Bud­get rev­enues un­der this ar­range­ment and is ex­pected to chip in about R23bn for 2007/2008. In Oc­to­ber 2006 SA Trea­sury di­rec­tor-gen­eral Le­setja Kganyago called for a ma­jor re­think of the en­tire sys­tem. He said: “The Sacu for­mula will have to be re­viewed. We can’t con­tinue this way.”

Though the sys­tem was re­vised two years ago, the cru­cial fea­ture re­mains that SA hands out a lot more than it gets back. An of­fi­cial from the SA Rev­enue Ser­vice says: “The cus­toms pool is di­vided ac­cord­ing to a for­mula based mainly on trade within Sacu. Be­cause SA ex­ports much more to its neigh­bours than it im­ports from them, the rev­enue split strongly favours our neigh­bours. SA gets about 10% of the cus­toms pool. The ex­cise pool is di­vided dif­fer­ently and about 85% of it comes to SA. But it’s a smaller pool.”

An­other Rev­enue of­fi­cial has com­plained: “This is de­vel­op­ment aid dis­guised as reve-

Be­cause SA ex­ports

much more to its neigh­bours than it im­ports from them, the rev­enue split strongly favours our

neigh­bours.

nue-shar­ing. If we’re go­ing to give aid we must call it aid – but we can’t go on giv­ing like this.”

Against that is the fact that SA does have some use­ful ex­port boosts from Sacu which, Botswana aside, is ef­fec­tively a rand-trad­ing re­gion.

Mean­while, Namibia’s econ­omy con­tin­ues to thrive.

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