Namibia gets SACU windfall
Namibia has received more than N$7.1 billion from the Southern African Customs Union (SACU) Common Revenue Pool since January, the Bank of Namibia has said.
SACU is a single customs territory and has a common external customs tariff. Goods grown, produced or manufactured in the Common Customs Area are traded freely among the member states Botswana, Lesotho, Namibia, Swaziland and South Africa, free of customs duties and quantitative restrictions.
SACU operates a Common Revenue Pool into which all customs, excise and additional duties are paid. Each member state receives a share from this pool.
In the first quarter of this year, Namibia received N$3.4 billion from the revenue pool, increasing to N$3.7 billion in the second quarter.
Namibia’s share from the revenue pool has seen a dramatic increase in recent years. In the first quarter of 2011, Namibia’s share stood at N$1.3 billion increasing to N$1.8 billion in the fourth quarter of that year. Last year, Namibia’s share jumped to N$3.4 billion in the first quarter a figure maintained throughout the year for a total earnings of N$13.8 billion.
If the current trend continues, Namibia is likely to surpass last year’s earnings from the common revenue pool.
Namibia continues to rely heavily on the SACU revenue to support its budget spending. According to SACU’s 2012 Annual Report, Namibia’s share from SACU stood at 25.7% of the country’s total revenue in the 2010/11 financial year. It was estimated to have increased to 26.6% of revenue in the 2011/12 financial year and to 38.9% in the 2012/13 financial year.
This week, Bank of Namibia Deputy Governor Ebson Uanguta told reporters that SACU receipts had helped improve the country’s foreign reserves to N$18 billion almost 3.5 months of import cover. There were concerns earlier in the year that Namibia’s international reserves were not adequate to protect the fixed currency arrangement with South Africa as well as meeting the country’s international obligations.
Analysts have called for the diversification of Namibia’s revenue sources as the country could find itself in trouble should its share from the Southern African Customs Union revenue pool be cut once a revised policy is implemented.