01 March 2024

SACU IMF Workshop On The Statistical Transactions Of SACU - Address By The Executive Secretary Ms. Tswelopele Moremi Welcome

30th April 2007 - 4th May 2007 Windhoek Namibia.

Director of Ceremony IMF Representative, Mr. Kumah Distinguished Officials from SA CU Member States
It is a great honour for m e to welcome you to this workshop on the Statistical Treatment of SA CU Transactions in the Balance of Payments, National Accounts and Government Finance Statistics. I would like to take this opportunity in particular, to welcome the IMF representatives to Namibia and to thank them for choosing the Secretariat to collaborate with in this important workshop. I do hope you have had a wonderful trip and that you w ill find the arrangements made for the workshop meet with your expectations.

Today`s workshop marks an important milestone in the collaboration between the SACU Secretariat and the IMF. As a Secretariat, it is our hope that w e w ill see m ore of such collaborative activities between our two institutions.

Ladies and Gentlemen,

At the outset, I would like to take this opportunity to update you about developments in SACU. As you are aw are, on 1 July 1910 an agreement establishing SACU as a Custom s Union between the Union of South Africa and the territories of Basutoland, Swaziland and Bechuanaland w as signed by Lord Gladstone, in his capacity as Governor-General of the Union of South Africa and as High Commissioner of the other three territories. This agreement provided for a duty free flow of goods between members and a basic Common External tariff of 15% advalorem.

The revenue generated w as administered by South Africa and distributed among the member countries on the basis of fixed percentage shares. The shares left South Africa with 98.7% of the revenue pool and these shares remained unchanged until 1965, when they w ere adjusted slightly.

Director of Ceremonies,

A new SACU Agreement was concluded in December 1969 to provide for a CU between South Africa and the independent BLS.

In the negotiations that led to this agreement, BLS were particularly concerned that they were not getting a fair share of the custom s union revenue. They were persuaded to hold these views by the growth of their economies and consequently their imports while they continued to receive a fixed percentage share in revenue. The new Agreement cam e up with a revenue sharing formula which provided compensation to BLS for the disadvantages of being part of a common custom s area with a larger and m ore developed economy and for the lack of fiscal discretion that they sacrificed. How ever, this Agreement continued to have a number of problems.

I am happy to say that in October 2002, after extensive negotiations, the current Agreement w as signed and entered into force on 15 July 2004. An important difference between this Agreement and the previous Agreements is that it provides for joint exercise of responsibility over decisions affecting tariff setting, Com m on Revenue Pool and the overall direction of SACU.

Distinguished Participants, The 2002 Agreement provides for the establishment of new SA CU institutions to reflect the joint decision making process. These include an independent SA CU Secretariat, a Tariff Board, an ad hoc Tribunal and the National Bodies.

The Secretariat is now operational, having been established on 15 July 2004 and the first tier professional staff joined the Secretariat in September 2005. I am happy to say that w e now have 13 professional officers that cover Trade Policy, Trade Facilitation, Revenue Management and Com m on Policy Development. W e are continuing to expand our staff to ensure an adequate service delivery to Member States.

Efforts to establish the Tariff Board and a Tribunal are at an advanced stage. An Annex on the Tariff Board and National Bodies was adopted by the SACU Council in September 2006. Officials from Botswana, Lesotho, Namibia and Swaziland are currently undergoing training, with a view to establish National Bodies by the end of 2007.

It is anticipated that the Tariff Board will be operational by January 2008. This w ill ensure joint decision making in the setting of tariffs.

Finally, In an effort to integrate SA CU into the global economy, a number of trade agreements have been concluded with third parties. Already SACU has concluded negotiations with the European Free Trade Association (EFTA) as well as MERCOSUR. It is expected that these negotiations w ill result in better market access for SA CU products and increased investment flow s into the SA CU region. Negotiations with the EU are being pursued through SA DC and a trade and investment development cooperation agreement is being pursued with the United States of America. An important development currently being pursued in this area is the drafting of the Common Negotiating Mechanism that will guide the process of negotiations with third parties. It is anticipated that the Common Negotiating Mechanism will be in place by December 2007.

The new SACU Agreement also provides for the development of com m on policies on industrial, agriculture and com petition as w ell as policies on unfair trade practices. Work has started in all these areas and it is anticipated that policies on unfair trade practices will be in place by December 2007.

In the area of trade facilitation, a programme which entails the establishment of one-stop borders, electronic data interchange, joint border controls and the introduction of a single custom s document is being pursued. A single administrative customs document was introduced in the w hole of SACU in October 2006. Efforts are underway by the different custom s administrations to electronise data capture.

Ladies and Gentlemen, With the first SA CU agreement having been concluded in 1910, this makes SACU one of the oldest, if not the oldest Custom s Unions in the world. It has evolved over time under different management structures and during this evolution, it has emphasized different aspects of the Customs Union.

In order to ensure that SACU operates as a true customs union, we are now engaged in a program me of consolidation. This entails establishment of the outstanding SACU institutions, development of com m on policies and ensuring the full implementation of the 2002 Agreement. Our consolidation also involves ensuring that gaps in the operation of Union are addressed. In this regard, w e recently undertook an audit of the processes and system s for data capture at the borders. As a follow up to that, we have now put in place a programme to address the audit findings.

In conclusion, I would like to note that your workshop fits in with our consolidation objective, in that it is aimed at improving and standardizing the w ay that w e capture SA CU transactions. This w ill facilitate the monitoring of economic performance in our region by ensuring w e have a com m on basis for recording our key economic indicators. W e therefore look forward to a healthy exchange of view s during this workshop which will assist Member States in benchmarking their own practices in the compilation of the various accounts.

I therefore take this opportunity to wish you fruitful deliberations.

I thank you.