Cabinet has approved that Namibia continues consultations to refine the country's position on the Southern African Customs Union revenue-sharing agreement.

This was said by deputy information and communication technology minister Engel Nawatiseb at last Thursday's media briefing on Cabinet resolutions taken at Tuesday's meeting.He said Cabinet had noted that the proposed changes to the revenue-sharing arrangement are not consistent with the guiding principles of the union, and may result in an unfair loss to some member states and unfair gains to others.

Meanwhile, the union is assessing potential influences of the industrial policy and trade, including the use of rebates, refunds and duty drawbacks within the framework of the Sacu agreement. This would show Namibia's position, once finalised.The objective of the agreement is to facilitate the equitable sharing of revenue arising from trade among member states.Kungo Mabogo, Sacu secretariat spokesperson said in a response to questions by The Namibian that the review of the current revenue-sharing formula (RSF) was initiated in 2010, but had not been concluded yet. 

She said the revenue review process was revived as part of the work programme for the ministerial task teams, which was approved on 22 June 2017 by the Sacu council of ministers, and endorsed by the 5th summit of heads of state, held on 23 June 2017 at Lozitha, Swaziland. The work programme is a policy guideline aimed at promoting trade facilitation, and assists the customs administrations in the region to design and implement a comprehensive regional reform programme.

“The review of the current RSF aims to address some challenges which were identified by the member states in the implementation of the current RSF,” Mabogo noted. She added that some of the challenges include volatility in Sacu revenue shares, whereby the current RSF is such that member states' revenue shares are determined and paid based on a forecast, which is subsequently reconciled against actual and audited data. “During years of economic boom, actual revenue collections exceed the forecasts, resulting in excess collections (Common Revenue Pool surplus) and positive adjustment payments to member states. However, in times of low economic activity, actual revenue collections can be below the forecast, which result in negative adjustment (Common Revenue Pool deficit) in the revenue shares to member states.

The weakness in the RSF was more visible post the global financial crisis experienced around 2008, and member states agreed to review it,” she explained. Mabogo added that the review is needed to ensure that the agreement is aligned with the Sacu vision to promote competitiveness, industrial development, intra-regional trade and deepening regional integration.“The review is set to ensure that revenue shares are equitable among the member states, and take into account the socio-economic circumstances of member states, as well as to minimise volatility of the member states revenue shares,” she said.