Ramaphosa calls on customs union to improve integration, trade ties

President Cyril Ramaphosa is welcomed by Eswatini’s King Mswati III, the current chair of Sacu, ahead of the 8th Sacu Heads of State and Government Summit held in Eswatini. Photo: GCIS

President Cyril Ramaphosa is welcomed by Eswatini’s King Mswati III, the current chair of Sacu, ahead of the 8th Sacu Heads of State and Government Summit held in Eswatini. Photo: GCIS

Published Jun 30, 2023


PRESIDENT Cyril Ramaphosa has called for the five member states of Southern Africa Customs Union (Sacu) to discuss the diversification of their economies to increase intra-Africa trade and deepen integration.

The five states are Botswana, Lesotho, Namibia, South Africa, and Swaziland.

Speaking at a Sacu summit in Swaziland yesterday, Ramaphosa said the states were positioned to use their collective revenues to support industrial capacity and infrastructure development within the union.

“We cannot be content that Africa’s share in global trade is a mere 3%. This customs union should contribute to substantially increasing the African trade in goods and services.

“We will achieve this if we have clearly articulated programmes, sufficient resources, a robust governance framework and a commitment to executing the strategic plan," he said.

The Sacu Strategic Plan 2022-2027, which will be in its first year of review since being adopted at the 7th Sacu Heads of State and Government Summit, is centred on six pillars, namely: industrialisation, export and investment promotion, trade facilitation, and logistics, implementation and leveraging of the African Continental Free Trade Area opportunities, Trade relations/unified engagement with third parties, finance and resource mobilisation and effectiveness of Sacu Institutions.

Ramaphosa said the states were meeting at a time when seismic shifts were taking place in the global economy.

“Just as countries were beginning to recover in the aftermath of the Covid-19 pandemic, the global economy was further weakened by the Russia-Ukraine conflict and geopolitical contestation.

“As the UN Conference on Trade and Development noted earlier this year, food and energy crises, surging inflation, debt tightening and the climate emergency are all contributing to one of the lowest rates of global economic growth in decades,“ Ramaphosa said.

He said it was critical for Sacu to fulfil its mandate if it were to withstand the global shocks and mitigate their impact on its respective countries.

“Sacu is the oldest customs union in the world, having been founded in 1910. The Sacu agreement has undergone several changes and improvements over the years to better reflect the prevailing political and economic environment.

“We have always been deliberate about using this union as a vehicle for advancing and deepening integration,” he said.

According to Ramaphosa, Sacu was working to achieve this integration through co-operation in trade and industrial policies.

“We seek to build cross-border value chains among all Sacu member states, underpinned by regional infrastructure programmes.

"The question for us is, to what extent have we been successful in this regard? And, is Sacu still fit for purpose and able to respond effectively to the needs of member countries?" he said.

Ramaphosa said the geopolitical and economic shifts taking place across the world necessitated that Sacu must be quite intentional about what it hoped to achieve.

“We must be quite deliberate when it comes to playing a developmental role in the region, on the continent and globally.

“At the recent Summit for a New Global Financing Pact in Paris, Africa spoke with one voice about the need for industrialised countries to meet their commitments to developing economies,” Ramaphosa said.

He said nearly all countries present had agreed on the need for the reform of multilateral development and financial institutions.

“Ultimately, we strive for a world order that accommodates developing economy countries by having rules in respect of access to capital, sovereignty, and the right to develop our industries.

“The Sacu Strategic Plan adopted in June 2022 is the foundational document that executes the aspirations of Sacu. We must work to deepen regional integration in the customs union and deliberately forge stronger ties among the five member states,” he said.

According to Ramaphosa, South Africa believed that spatial development initiatives, industrialisation, exports and investment promotion, and regional manufacturing linkages would enable the countries to diversify their economies.

“It will also enable us to take advantage of opportunities opened up by the African Continental Free Trade Area.

“For this to happen, we should prioritise economic infrastructure, especially scaling up renewable energy capacity, roads and railways, ports and airports, telecommunications and water infrastructure,” he said.