Namibia is pushing to access its share of funds from rebates collected by the South Africa Customs Union (SACU) since its inception and have remained exclusively available only to South Africa.
“Ever since, we have not accessed the funds from that pool. I don’t want to engage in the figure’s game, but between 35-40 percent of the total pool are forfeited from rebates and drawdowns. So, it’s a big amount, in which we don’t really share and it almost goes wholesale to South Africa,” said the Finance minister.
Schlettwein’s stance on the funds could become a headache for the trade block and South Africa, with Namibia having assumed the Chairmanship of the Southern African Customs Union (SACU) Council of Ministers last month, a grouping which implements the agenda of the union.
“The issue of how rebates are funded out of the SACU pool and who the beneficiaries of those rebates are, is an issue that needs to be discussed,” he said.
The Finance minister accused South Africa of using the funds to subsidize its industry at the expense of other member states.
“Our opinion is that those rebates are utilized by South Africa to subsidize their industry and develop their productive capacity and we have not gained much access to them and therefore not been able to utilize them, so these are big issues,” he said.
South Africa’s Department of Trade and Industry Deputy Director General, Ambassador Xavier Carim dismissed the accusation that the region’s largest economy was receiving preferential treatment when it came to rebates collected by the trade block.
“The SACU agreement, adopted by all its members sets out the terms and conditions of the arrangement. The SACU Agreement does not establish a rebate pool. SA has not and cannot receive revenue or rebates from SACU. This is simply not possible under the terms of the agreement. The Agreement does allow members to utilize customs duty rebates as a policy tool but with the obligation that they are applied across the union,” he said.
Carim, however, maintained the neighboring country’s stance that it should be accessing more from the SACU pool than its currently receiving, amid calls for the review of the existing sharing formula.
“It should be noted that SA being the largest economy in the Union is also the largest contributor to the revenue pool and that it draws considerably less than it contributes,” he said.
SACU Communications Manager, Kungo Mabogo said the trade group did not have a comment on the matter.
Already 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.
Schlettwein said any proposed new formula should not have a detrimental impact on the domestic economy which relies 25-30 percent on SACU revenues.
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.
Namibia received N$4.7 billion from the Southern African Customs Union for the first quarter of this year.