Minister of Finance Martin Dlamini has revealed that Swaziland is seeking more certainty from the Southern African Customs Union (SACU) revenue sharing formula (RSF). 

He said this during the familiarisation tour of the new SACU Executive Secretary Paulina Elago, a Namibian national, who resumed her duties at the beginning of last month. 

The minister said due to Swaziland’s fiscal policy’s heavy reliance on revenue from the customs union, the hope was that there will be a steady reliable stream coming in. 

Dlamini explained that the country does not at any point want to lose the benefits that come with the current formula. He said that stability would enable the country to budget and not be vulnerable as it was a few years ago with the reduction of the receipts. According to the current formula, each country gets a cut based on its share of the intra-SACU imports.

The formula benefits the smaller members which are Lesotho and Swaziland. Other member states of SACU are South Africa, Namibia and Botswana.

The minister said Elago’s visit served as an introduction on the issues that the country is interested in. He said the issues they had discussed are those that will make SACU forward looking, integrated in the region and revenue sharing issues. He said she was also party to discussions that form the backbone of SACU.

The minister affirmed that the call for SACU to become a development fund is still at suggestion stage and had not been seriously discussed by member states. He said as far as the way member states used the money, it was in part for development in any case. He was responding to questions on whether there was any political basis for the old SACU and it needed to be revised to become a development union in ways similar to what South African Trade Minister Rob Davies has often suggested and was reported last year by the South African publication Mail and Guardian. It was reported that the SACU funds should be used to create a development community, ending the old revenue-sharing arrangement and creating a new one based on mutually beneficial and agreed development spending.

The minister further revealed that the revenue sharing formula proposals are at consolidation stage. He explained that Swaziland was not looking for an equal share of the revenue pool since there are factors that need to be considered first. Dlamini said since the formula considered each country individually, it would not be practical for equal sharing of the revenue. He reiterated that the talks on the sharing were at a final stage 

The visiting SACU executive secretary said she has already paid a visit to Botswana and Lesotho during her familiarisation tour. She said she was on a quest to better understand the work she will be undertaking in the coming months. 

Sharing

The South African Customs Union (SACU) Revenue Sharing Formula (RSF) has been revised substantively twice; once in 1969 and in 1994-2002 since the creation of the customs union in 1910 and each time the changes in the treaty were a reflection of the historic changes occurring in southern Africa. The apartheid regime created a RSF that served to increase the share of revenue of Botswana, Lesotho and Swaziland (BLS), leaving the South African share as a residual of revenues. As this made South Africa a residual claimant it was unsustainable and required reform in the post-apartheid era. The 2002 formula increased the share to the Botswana, Lesotho, Namibia and Swaziland (BNLS) and removed South Africa as a residual claimant but did not change the fundamental economic relationship between members.