01 March 2024

Opening Remarks By The Chairperson Of The Council, Hon. Majozi Sithole, Minister For Finance, Swaziland

6 July 2007 Windhoek, Namibia

Honorable Ministers,
Madam Executive Secretary,
Directors General,
Principal Secretaries,
Permanent Secretaries,
Senior Officials,
Ladies and Gentlemen,

It is once more a great pleasure for me to welcome you to this 11th meeting of the SACU Council of Ministers here in Windhoek. I would like to take this opportunity to thank the Government of Namibia for their warm hospitality and the excellent arrangements made for this meeting.

Honorable Ministers,
Once more, I would like to note that this meeting is taking place after the launch of the 2006/07 African Economic Outlook by the African Development Bank on the occasion of the Bankís Annual Meetings. African Economic Outlook indicates that the African economic growth is expected to reach 6% this year. This growth is underpinned by improved macroeconomic stability and performance, favourable external conditions, and improved political stability. Generally, the drivers of this growth are peace and stability, improved terms of trade, economic governance, improved business climate and lower debt ratios.

There are however some developmental challenges facing the continent. Most African economies continue to be faced by global imbalances such as commodity price volatility, exchange rate uncertainties, and terms of trade imbalances. There are also limited diversification opportunities in commodity exports, slow economic reforms, and frequent occurrences of natural hazards such as droughts which affects mainly African agricultural outputs.

All these factors have some relevance for the SACU economies. Generally, SACUís macroeconomic fundamentals are sound and the sub-region is expected to grow by 4.5% in 2007. A key weakness identified in the African Competitiveness Report released recently by the World Economic Forum is in the area of energy and transportation infrastructure, which acts as a constraining factor to productivity growth and competitiveness. There is therefore a need to address this weakness.
Honourable Ministers,
Our meeting coincides with the Extra Ordinary Summit of the African Union in Accra, Ghana. The Summit deliberated on the formation of the African Government. This Summit is a follow up from the 2005 AU Summit held in Abuja, Nigeria which also dealt with the same topic. During the recent summit, a fundamental conclusion was reached that the ultimate goal of the African Union is full political and economic integration leading to the United States of Africa.
The summit however pointed out that whereas all Member States accept the United States of Africa as a common and desirable goal, they differed on the modalities and the time frame for achieving this goal and the appropriate pace of integration. There was also a common agreement on the need for an audit review of the state of the African Union in order to know the areas in which significant improvements have to be made to accelerate the integration process.
The outcome of the recent Summit is welcoming in the sense that it seeks to cement a common understanding of continental integration and identify implications, constraints and challenges for the formation of the United States of Africa. As SACU is part of the continental arrangement, the Summit debate has implications for us as we move forward in terms of our regional integration agenda.
Honourable Ministers,
As this is my last meeting as Chairperson of the SACU Council of Ministers, I would like to take this opportunity to look back at what we have achieved during the year. At the 8th Council meeting held in Gaborone, Botswana on 8 September 2006, I outlined my priorities during my term of office as Chairperson of Council. Amongst the issues I listed as priority were:

1. Common Revenue Management. This entails finalising the decisions on the future Management of the Common Revenue Pool as well as intra SACU Trade data.
2. Trade policy. This relates to the development of a strategic framework for trade negotiations, a Common Negotiating Mechanism as well as the identification of an African country or region for SACU to start negotiations with.
3. Private Sector. This involved identifying ways of promoting the Private Sectorís involvement in SACU activities.

On the issue of management of the Common Revenue Pool, an initial report of the study to update the interest payments and receipts as well as the administrative costs of managing the Pool was considered by Council at the last meeting in April 2007 in Piggs Peak, Swaziland. Council raised some additional issues which needed to be analysed and directed that further work be done to allow a decision to be made on a permanent arrangement for the Management of the Pool. It is my understanding that this work has been done and that Member states will now be studying the Report with a view to make their positions.

A related activity was the investigation of broader issues, which were defined as the benefits and costs other than interest costs of borrowing resulting from the management of the Common Revenue Pool. During the year, SACU began to deal with the broader issues and defined the scope of issues to be considered. During this process, it became clear that the broader issues were much wider than those relating to the additional benefits and costs arising from the management of the Common Revenue Pool.

Some of these issues were addressed by the study on the Management of the Common Revenue Pool. Council further decided that some of the broader issues would be important in informing the decision on moving towards a permanent arrangement for the management of the Common Revenue Pool. This resulted in a decision to undertake a study on the impact of the rebates which is a separate study, yet to be undertaken.

On intra-SACU trade data, I am happy to note that an audit of the processes and systems for the collection and compilation of data was successfully conducted with the assistance of Her Majestyís Revenue and Customs. The recommendations of the audit report were adopted by Council in December 2006 and are now being implemented.

Turning to my priorities under trade, I would like to note that substantial work has been achieved in this area. Work on the development of a Common Negotiating Mechanism has started. The Secretariat has prepared a background paper which is yet to be finalized by Member States. As this is an important deliverable, extensive work still has to be done in evaluating the current structure for negotiations and proposing options for how it can be improved. I would urge that priority be given to finalise this matter.

During this period, Council took a decision to start negotiations with the East African Community. The Secretariat is in the process of undertaking a study to inform both an offensive and defensive strategy.

In the area of increasing the role of the private sector in the SACU activities, there has not been much progress. However, at the national level, we have continued to inform the private sector about SACU activities and the implications of various trade negotiations that SACU is engaged in. I still feel that, at the regional level, we need to define a systematic strategy for better engaging the private sector in our activities. During one of their visits to Swaziland, The Secretariat held a workshop with the private sector on SACU activities which proved to be extremely informative. It is my wish that the Secretariat continues to do that at every opportunity.

Honourable Ministers,
When I assumed Chairmanship of Council in July 2006, significant developments in regional and global developments were taking place. The critical issues then were about deepening regional integration and ways of enhancing our growth and development as a region. As I surrender my Chairmanship, the issues are more of a political nature, where the debate is about continental governance issues. These issues should remain high on our priorities as they will have an impact on our future trading relations. With the support of the Task Team on Regional Integration, Council therefore needs to continuously engage with these issues.

I thank you