On 15 July 2022, Eswatini assumed chairmanship of SACU, a union formally established in 1910. Eswatini’s affiliation with SACU predates its independence from Great Britain in 1968. SACU is central to the Eswatini economy with the country receiving E5.8 billion this financial year alone. Interestingly, under apartheid, South Africa was the sole administrator of the SACU revenue pool.

By Avite Mbabazi

The Southern African Customs Union (SACU) dates back to an early agreement dubbed the 1889 Customs Union Convention between the British Colony of Cape of Good Hope and the Orange Free State Boer Republic.

Later in 1910, when the Cape colony united with the Natal, Transvaal, and Orange River colonies to form the Union of South Africa, this agreement was extended to the Union of South Africa and the British High Commission Territories (HCTs) of which Eswatini was part of alongside Botswana, Lesotho, and Namibia.

According to the SACU website, the 1910 agreement created a Common External Tariff (CET) on all goods imported into the union from the rest of the world; free movement of SACU manufactured products within SACU without any duties; and a Revenue-Sharing Formula (RSF) for the distribution of customs and excise revenues collected by the union.

Under apartheid, South Africa was the sole administrator of the common SACU revenue pool, setting SACU import duties and setting excise policy, however, with the 1969 SACU agreement signed by the then sovereign states of Botswana, Lesotho, and Swaziland (BLS), excise duties were included in the revenue pool and a new revenue sharing formula which increased BLS revenues by 42 % was introduced.

Today, a Revenue Sharing Formula (RSF) is still in place in addition to a Common Negotiation Mechanism (CNM) with third parties; a common revenue pool into which duties collected are paid, managed by South Africa; and a Common External Tariff (CET) to goods imported into the union’s territory.

Speaking during the Post-Budget Seminar hosted by the Central Bank of Eswatini in partnership with the Economics Association of Eswatini earlier this year, Minister of Finance Neal Rijkenberg revealed that Eswatini would receive E5.8 billion from the SACU Receipts this financial year.

Share With Friends