SACU – One Hundred Not Out: What future for the Customs Union?

Image: Flickr, GovernmentZA
Image: Flickr, GovernmentZA

This paper is based on research conducted recently in South Africa (SA), Namibia, Angola and Botswana.

Policy and decision makers were asked to complete a questionnaire about the future of the Southern African Customs Union (SACU). Although the responses to the questionnaire were low, the interaction with respondents was of a high quality. The SAIIA workshop held on 20 May 2010 provided an opportunity to receive further contributions and to refine the arguments developed previously. A scenario-planning exercise, which was held concurrently, was published as SAIIA Occasional Paper 63, ‘What does the Future hold for SACU? From Own Goal to Laduma! Scenarios for the Future of the Southern African Customs Union’. This paper remains the reflections of the author, who writes in her personal capacity.

SACU is the world’s oldest surviving customs union. However, following recent developments, such as the Economic Partnership Agreement (EPA) negotiations and the loss of value in the revenue pool, SACU is now in crisis. For the first time in its history the organisation faces a real threat of collapse, ironically just as it celebrates its centenary.

The paper is divided into two sections. The first analyses current developments in SACU, while the second deals with the results of interviews that were conducted in the region using two questionnaires, one for Angola and one for SACU members. The Angolan questionnaire was developed, in light of the proposed Angola–Namibia–South Africa ‘axis’, to test views on the future of the SA–Angolan relationship and the country’s regional ambitions related to SACU. The SACU questionnaire was developed to test intra-SACU views on the future of the organisation and recent developments.

The interviews and general analysis show that all member states feel the current SACU arrangement needs to be improved, but the direction of this change contested.

All the member states have a key interest in a future SACU that does not regress on regional integration. Economically, Botswana, Lesotho, Namibia and Swaziland can not survive without South Africa’s support and, politically, South Africa cannot afford to have any more failed states on its doorstep. The outcome of SACU’s current dilemma will also affect the broader regional integration agenda – if regional integration is seen to result in tangible benefits for participants, a strengthened SACU could have positive spin-off effects for the Southern African Development Community and the tripartite process.

14 Oct 2010