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Albertina Nakale
WINDHOEK- The Council of Ministers has expressed strong concern that the proposed amendments to the Customs Union Revenue Sharing Arrangement for the Protection Southern Africa (ASAC) are not in line with the guiding principles and are likely to result in losses. in some Member States and win among others.
SACU is engaged in an effort to move the union's main benefit from revenue-sharing to a development-sharing formula. SACU includes Botswana, Lesotho, Namibia, South Africa and Swaziland. Despite the principles established in the revision process of the revenue-sharing agreement, Namibia expressed its opinion on the proposed changes.
Engel Nawatiseb, Deputy Minister of Information and Communication Technologies "The Cabinet took note that the work to assess the potential impacts of industrial policy and trade, including the use discounts, refunds and customs duties ". The gaps in the SACU agreement are ongoing and, once completed, will inform Namibia of its position, "said Nawatiseb
. current revenue sharing arrangement; income shares should be equitable in the light of political and socio-economic considerations between Member States, and income share allocations should be development-oriented and non-redistributive.
The principles also indicate that revenue sharing should promote economic convergence. pro-cyclical allocation of Member States' income shares; and should be aligned with SACU's vision and mission.
He noted that the Cabinet has approved Namibia to continue the national consultation with a view to refining the country's position on SACU's RSA. The SACU revenue-sharing formula was implemented for the first time in December 2004 to calculate Member States' quota shares for 2005/06
In practice, the annual shares of Member States are determined and approved by the Council in December.
The current income-sharing formula has three components; namely customs, excise and development component. The share of customs is distributed on the basis of each country's share of intra-SACU imports. The Excise component is allocated according to the share of the gross domestic product (GDP) of each country. The development component, which is set at 15% of total excise income, is allocated according to the inverse of the per capita GDP of each country.
The structure of the revenue-sharing formula is such that BLNS Member States obtain a significant share of their income. revenue from the customs component while South Africa receives over 90% of its share of the excise component.
The development component, intended to compensate for the least developed economies, is distributed more or less equally among all Member States. . The implementation of the current revenue-sharing formula presents a number of challenges associated with data that inform variables in the formula. In addition, the recent global financial crisis has revealed some weaknesses in the structure of the Revenue Sharing Arrangement.
The review process of revenue sharing arrangements followed a three – step approach that involved first identifying areas for further study. in the current revenue sharing arrangement; second, an independent review of the identified areas; and third, a negotiation process to reach consensus on a new revenue-sharing arrangement.
Roman Grynberg, professor of economics and analyst at the University of Namibia, said at the SACU sensitization session in Namibia. According to Market Watch, SACU is currently structured in a way that only benefits South Africa in terms of development, while it sees the billions of dollars that the four countries BLNS (Botswana, Lesotho, Namibia and Swaziland) are receiving from the union as "bribe" for them to continue to import from South Africa.
Grynberg called the formula "subsidy for the four BLNS countries to continue to import more goods from South Africa."
"SACU is not a bad idea. its formula from a revenue-sharing formula to a development-sharing formula, "he said.
He reiterated that with the current SACU revenue sharing formula, the more the four LNS countries import from South Africa, the more money they have.
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