geg-africa-dp-ramkolowan-july-2018-final-web-4486b8ba65838208.pdf

This research paper assesses the feasibility of establishing a regional stabilisation fund for the Southern African Customs Union (SACU) to counter revenue volatility. The author concludes that a regional fund is inappropriate and infeasible because member states experience different degrees of volatility driven by different revenue sources. Instead, the paper recommends that member states focus on revising the SACU revenue-sharing formula or implementing country-level fiscal tools such as medium-term expenditure frameworks and fiscal rules.

• Stabilisation funds are typically used by resource-rich countries to buffer against exogenous commodity shocks, whereas volatility in SACU member states is primarily caused by an internally agreed revenue-sharing formula.
• There is no known precedent for a regional, multi-country fiscal stabilisation fund, as such an arrangement would require member states to surrender some fiscal independence to an external body's rules.
• Revenue volatility varies significantly across SACU members: eSwatini has experienced the highest volatility since 2004/05, while South Africa has seen far lower levels.
• The drivers of revenue volatility differ by country: for Lesotho, Namibia, and eSwatini, the SACU revenue pool is the main driver; for Botswana, it is commodity revenues; and for South Africa, it is the internal tax base.
• The customs component of the SACU revenue pool is inherently more volatile than the excise or development components, and this volatility is magnified for Botswana, Lesotho, Namibia, and eSwatini (BLNS) because they receive far more customs revenue than they collect.
• The process for distributing SACU pool revenues creates further uncertainty because disbursements are based on estimates and adjusted years later, weakening the link between annual collections and payments.
• A basic 'forecast-actual' stabilisation fund rule would provide budgeting certainty but would not reduce the overall volatility of total government revenue because it does not address the inherent volatility of the SACU pool.
• Combining a stabilisation fund with a budget deficit fiscal rule (e.g., ensuring deficits do not exceed 3% of GDP) can smooth budget balances, but may require member states to reduce government expenditure.
• Stabilisation funds are not the only tool for managing volatility; other options include medium-term expenditure frameworks, fiscal rules, fiscal councils, and revenue earmarking.
• The most effective way to address the root cause of revenue volatility for the BLNS countries is to revise the SACU revenue-sharing formula.

APA

South African Institute of International Affairs (n.d.). geg-africa-dp-ramkolowan-july-2018-final-web-4486b8ba65838208.pdf. https://saiia.org.za/wp-content/uploads/2018/07/GEG-africa-DP-Ramkolowan-JULY-2018-FINAL-WEB.pdf

Chicago

South African Institute of International Affairs. geg-africa-dp-ramkolowan-july-2018-final-web-4486b8ba65838208.pdf. n.d. https://saiia.org.za/wp-content/uploads/2018/07/GEG-africa-DP-Ramkolowan-JULY-2018-FINAL-WEB.pdf.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=geg-africa-dp-ramkolowan-july-2018-final-web-4486b8ba65838208.pdf |url=https://saiia.org.za/wp-content/uploads/2018/07/GEG-africa-DP-Ramkolowan-JULY-2018-FINAL-WEB.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairsndgegafricadpramkolowanjuly2018finalweb4486b8ba65838208pdf, author = {{South African Institute of International Affairs}}, title = {{geg-africa-dp-ramkolowan-july-2018-final-web-4486b8ba65838208.pdf}}, institution = {South African Institute of International Affairs}, url = {https://saiia.org.za/wp-content/uploads/2018/07/GEG-africa-DP-Ramkolowan-JULY-2018-FINAL-WEB.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }