Namibia has maintained that any proposed changes to the existing Southern African Customs Union (SACU) Revenue Sharing Formula (RSF) will not be in the best interest of the country and other member states.
This comes as South Africa, the biggest economy in the union made up of Botswana, Lesotho, Namibia and Swaziland is pushing for the amendment of the existing formula which was implemented for the first time in December 2004.
South Africa is advocating for a bigger share of funds, compared to the current complex formula which has three components that are used to calculate the annual revenue shares for Member States to be distributed during the subsequent year.
Speaking to the Windhoek Observer soon after the handover of the SACU Council of minister chairmanship from Lesotho to Namibia on Thursday, Finance Minister, Calle Schlettwein, said the proposed changes to the revenue sharing formula will be one of the areas that will be looked at.
“The revenue sharing formula and arrangement is one of the issues in the work programme that we have to address,” the minister said.
“We have all agreed that any arrangement that would come out of it should have certain principals anchored in it and one of the principals is that it must be of such a nature that no one is worse off.
“That is a crucial point for all the members that we don’t engage in a zero sum game and that there is a net gain for everybody,” he said.
Schlettwein said the argument by South Africa that SACU member states were benefiting through the existing revenue sharing formula at its expense, were far from the truth.
“That is the argument from South Africa. We don’t believe that the argument is necessarily true because the gains that South Africa get by having us as their captive and secure market is huge. So, we have to find out who is gaining and who is not,” he said.
“We do not accept upfront the argument that they are bankrolling us and we are not contributing, it’s not the case.”
Quizzed if SACU had a set timeline to conclude the review of the sharing formula, the finance minister said, “It is a work in progress.”
Schlettwein said the status quo allowed growth opportunities for all members and any likely changes will impact that.
“As it is, there are complex bread and butter issues that need to be addressed and we have to accept that it is better to grow together than fragmenting and growing in pockets.
“Our position is that the status quo is a good starting point and we can gradually move away from it, should there be a need,” he said.
Schlettwein said any proposed new formula should not have a detrimental impact on the domestic economy which relies 25-30 percent on SACU revenues.
“As Namibia, our reliance is significant, but there are other members that rely much more severely on SACU. I think what we are saying is that any new arrangement should not destabilize the fiscal situations of member states,” he said.
Namibia received N$4,7 billion from the Southern African Customs Union for the first quarter of this year.