30 March 2023

Opening remarks by the Chairperson of the Council, Hon. Baledzi Gaolathe, Minister for Finance and Development Planning, Botswana

27 June 2008

Midrand, South Africa

Honourable Ministers,
Madam Executive Secretary,
Ladies and Gentlemen,

It is a pleasure for me to welcome you to this 15th meeting of the SACU Council of Ministers. I would like to take this opportunity to thank the Government of the Republic of South Africa for their warm hospitality and the excellent arrangements made for this meeting.

As we begin this meeting, I would like to make a few remarks about the particular challenges that face our economies at the moment. We are all faced with a situation of rising inflation, coming largely from escalating global oil and food prices. As a result, interest rates are also rising, making it difficult for borrowers to maintain their repayments with the banking sector. This dire situation is even worse for the low income households, who are finding it difficult to survive. In a region where poverty levels remain above 50%, this is truly a course for concern. I am aware that this matter has been discussed at various international fora. In our own countries, increasingly the people are looking upon us to provide solutions to the problem. I hope during our meeting we will have time to share some ideas on this matter, particularly what we can do as SACU to respond to the escalating food prices in order to lessen the impact on our people. These could be in the form of immediate and longer term interventions, including possible tariff and non-tariff measures to ensure food security.

Turning to integration, there are also a number of challenges that have cropped up in the process of our integration into the global economy; which I hope we will find time to discuss during our deliberations. First, the SADC preparations for the establishment of a Customs Union by 2010 are going ahead. I am informed that, at the official level, Working Groups are meeting to define the operational details of the SADC Customs Union. In the past, we have emphasised the need for SACU Member States to actively participate at these preparatory meetings and make the appropriate input. Secondly, the negotiations between the EU and SADC on an EPA Agreement are proceeding. We are all aware of the challenges that these negotiations have placed on SACU. I am informed that several meetings have been held at the level of Trade Ministers to try and resolve the impasse among SACU Member States. During this meeting, I hope we will also have time to receive an update on this matter, particularly in the light of the deadline of 1 July 2008, which has been set for the signing of the Interim EPA Agreement.

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 12th Council meeting held in Maseru, Lesotho on 28 September 2007, I outlined my priorities during my term of office as Chairperson of Council. Amongst the issues I listed as priority were:

  1. Finalisation of the SACU Wide Strategy - finalising the studies on regional integration, which would serve as an input to the development of the Strategy.
  2. Consolidation of SACU - this entailed a programme for the full implementation of the SACU Agreement.
  3. Management of the Common Revenue Pool - finalising the studies on management options for the Common Revenue Pool and making a decision on a permanent arrangement for the management of the Pool.
  4. Trade relations - 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.

On the finalisation of the SACU wide Strategy, it was always understood that this process would be informed by the finalisation of the commissioned studies. Obtaining an understanding of the possible model for the proposed SADC Customs Union was therefore important. In order to facilitate this, in April 2007, SACU commissioned two studies on regional integration: one on the impact assessment of the SADC FTA and the proposed SADC Customs Union; another on the consolidation of SACU. I am happy to note that these two studies are now complete and have been discussed by the Task Team on Regional Integration. It is my understanding that the key inputs for the development of the Strategy are in place and that the process of isolating the key policy issues to inform the strategy has started.

The study on consolidation of SACU will also assist us to better understand the process of consolidation as well as enable the Task Team on Regional Integration to discuss the recommended Action Plan that will define the process of consolidation. Meanwhile, work on establishing outstanding SACU institutions and developing common policies has continued throughout the year. An audit of agriculture policies in all Member States has been conducted; a draft Annex on Competition policy has been developed; and efforts to define the form and structure of National Bodies as well as the supporting legislative framework are at an advanced stage. This process needs to be accelerated in order to secure the benefits of the Customs Union. I would however, like to urge you colleagues to lend support to the process of the adoption of national laws which will enable the establishment and proper functioning of National Bodies.

On the issue of management of the Common Revenue Pool, an in principle decision on the management option was made in September 2008. Subsequently, Member States were requested to undertake internal consultations on the agreed management options. A final decision on the management option is to be made upon completion of a study on rebates and duty drawbacks. This study was commissioned in December 2007 and a draft report was received in April 2008. Member States are presently finalising their comments on the study and I am informed that Council will be required to make a final decision on this matter in September 2008. I urge Member States to submit their comments on the study so as to facilitate early Council decision.

Turning to my priorities under trade relations, I would like to note that substantial work has been achieved in this area. A draft Common Negotiating Mechanism was presented for Council consideration in December 2007. However, adoption was deferred as the Annex was referred to Ministers responsible for Trade.

During the year, negotiations between SACU and India started and two negotiations sessions were held under the leadership of Namibia; SACU and the United States have now agreed to sign the TIDCA; a final round of negotiations between SACU and MERCOSUR was held in April 2008, during which, a number of the outstanding issues were resolved; and the SACU-EFTA Agreement was ratified by all Member States allowing the Agreement to come into force on 1st May 2008. Finally, SACU Member States continued to participate in the WTO Doha Development Round negotiations and met on several occasions to develop common SACU negotiating positions.

Honourable Ministers,
From the above it is clear that some progress was achieved during the year. However, much remain to be done. Now that we have the recommendations from the studies work has to start to develop a SACU wide strategy.

During the course of my tenure, I also had an opportunity to visit the Secretariat on 6 May 2008 where I addressed the staff. It was indeed refreshing to note the level of motivation among the Secretariat staff, despite the challenges of setting up a new institution from scratch. Following this visit, I sent correspondence to you colleagues, wherein I identified a number of areas affecting the implementation of the SACU Work programme and requested you to assist in ensuring that the objectives of the SACU Agreement are met. Amongst these areas were: taking the necessary steps in ensuring timely implementation of the customs initiatives; supporting the meeting of Legal Experts on the Error; participation in the meeting of the Task Team on Regional Integration as well as the meeting of HR experts on the Secretariat Remuneration Policy and Policy Survey.

I am happy to note that a number of these areas that I identified have been attended to. I would therefore like to thank my colleagues for their support in ensuring progress on these areas. I would also like to urge you to continue to support this process and ensure that we make a difference in this region.

I thank you