27 Jul 2016 15:30pm
WINDHOEK, 27 JUL (NAMPA) The contribution of the Southern African Customs Union (SACU) to economic development and poverty eradication in Namibia is significant because the revenue generated through the customs union boosts the national budget.
This was said by Minister of Finance Calle Schlettwein during his presentation on the importance of SACU on poverty eradication at the Foreign Policy Review conference in Windhoek on Tuesday.
The minister noted that Namibia has so far secured revenue streams that vary between about 25 per cent and 40 per cent of the countrys total revenue.
The customs union also offers quota-free access to larger markets that enables Namibia to diversify the economy.
Schlettwein said SACU remains a stepping-stone to the economic integration agenda that integrates Namibia within the Southern African Development Community (SADC) and Africa at large.
SACU is also important for us to negotiate on free trade agreement that helps us to improve our market access, he said.
The minister noted that Namibia has diversified its economy and is now second in the sub-region after South Africa.
Namibia exports diamonds and other minerals, beef, meat, fish, karakul sheep pelts and light manufactured goods, which accounts for nearly five per cent of the total SACU exports.
Schlettwein, however, noted that South Africa remains Namibias best import partner in finished goods such as vehicles, machinery and mechanical appliances, ore and commodities, electrical machinery and equipment and precious stones such as diamonds.
Most of these goods are imported from South Africa, China, Switzerland, Botswana and the Democratic Republic of Congo.
Meanwhile, SACU Executive Secretary Paulina Elago noted that trade in services is a priority but has not been implemented because of a lack of a legal framework, adding that it however contributes 60 per cent to the gross domestic product (GDP), which makes a strong case for Namibia to look at it.
Trade in services refers to the sale and delivery of an intangible product between a producer and consumer.
Elago noted that trade facilitation agreement (TFA) - aimed at removing bottlenecks in facilitating trade between countries - is another priority for revenue collection in the country.
I believe more should be done in trade facilitation in order to increase the benefits from SACU for enabling the movement of goods between countries, she said.
In 2015, Namibia developed a trade information portal that helps to improve trade facilitation through online trade regulatory information for both international and local trade communities.
Established in 1910, SACU is the oldest existing customs union in the world. It aims to promote sustainable economic growth and development for employment creation and poverty reduction among the people of southern Africa.
SACU provides for a common customs area that has a common revenue pool. All customs, excise and additional duties collected by the member states (Botswana, Lesotho, Namibia, South Africa and Swaziland) are paid into this pool within three months of the end of the quarter of a particular financial year and SACU Member States are then paid from this pool.