Scoping the future of SACU: a hundred years on

This research paper examines the existential challenges facing the Southern African Customs Union (SACU) as it marks its centenary. The author argues that the organization's survival depends on resolving internal dissonance regarding its revenue-sharing formula and Economic Partnership Agreement (EPA) negotiations with the European Union, while proposing a regional development fund to reduce the smaller member states' fiscal dependence on South Africa.

• SACU faces two fundamental challenges that threaten its continued existence: the reform of a contested revenue-sharing formula and negotiations for an economic partnership agreement (EPA) with the European Union (EU).
• The current revenue-sharing mechanism is procyclical and creates a heavy fiscal burden for South Africa, which subsidizes the national budgets of Botswana, Lesotho, Namibia, and Swaziland (BLNS). An abrupt end to these revenues could lead to the collapse of Lesotho and Swaziland, potentially increasing migration into South Africa.
• Disagreements over interim EPA agreements (IEPAs) threaten the customs union's integrity. While Botswana, Lesotho, and Swaziland have signed, South Africa and Namibia refuse to do so. Implementation of these IEPAs could force South Africa and Namibia to enforce border controls to prevent leakage, potentially leading to the dissolution of SACU.
• To resolve the impasse and reduce BLNS dependence on the revenue pool, the author proposes establishing a development fund carved from the revenue pool. This fund would invest in public goods in underdeveloped regions, including South Africa, and could be capitalized with help from multilateral partners.
• External pressures exist from tripartite free-trade area negotiations involving the Common Market for Eastern and Southern Africa, the Southern African Development Community (SADC), and the East African Community, though these are currently less threatening than SACU's internal conflicts.

APA

South African Institute of International Affairs (2010). Scoping the future of SACU: a hundred years on. https://saiia.org.za/research/scoping-the-future-of-sacu-a-hundred-years-on/

Chicago

South African Institute of International Affairs. Scoping the future of SACU: a hundred years on. 2010. https://saiia.org.za/research/scoping-the-future-of-sacu-a-hundred-years-on/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Scoping the future of SACU: a hundred years on |date=12 July 2010 |url=https://saiia.org.za/research/scoping-the-future-of-sacu-a-hundred-years-on/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2010scoping, author = {{South African Institute of International Affairs}}, title = {{Scoping the future of SACU: a hundred years on}}, institution = {South African Institute of International Affairs}, year = {2010}, month = jul, url = {https://saiia.org.za/research/scoping-the-future-of-sacu-a-hundred-years-on/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }