SACU – One Hundred Not Out: What future for the Customs Union?

The Southern African Customs Union (SACU) is facing a crisis driven by disagreements over Economic Partnership Agreement (EPA) negotiations with the EU and a shrinking revenue pool. While member states agree the 2002 SACU Agreement has not been fully implemented, they are divided on whether the organisation should be deepened into a common market or downgraded to a Free Trade Area (FTA). South Africa's dominance and its desire to shift toward 'production-led' regional integration further complicate the union's stability.

• SACU is currently in a state of crisis and faces a real threat of collapse, primarily triggered by the Economic Partnership Agreement (EPA) negotiations and a significant loss of value in the common revenue pool.
• The EPA negotiations with the European Union acted as a catalyst for the crisis, specifically because Botswana, Lesotho, and Swaziland (BLS) signed Interim EPAs despite South Africa's objections to the Most Favoured Nation (MFN) clause.
• The 2002 SACU Agreement, intended to introduce democratic institutions and common policies on industrial development and agriculture, has largely not been implemented.
• The common revenue pool has shrunk by an estimated 34% to 60% due to the global financial crisis, creating fiscal instability for the BLNS states who rely heavily on these transfers.
• South Africa's Department of Trade and Industry (DTI) has shifted toward a 'production-led' rather than 'market-led' approach to regional integration, which prioritizes network infrastructure over formal tariff arrangements.
• There is a fundamental divergence in how member states view the benefits of SACU: South Africa views the revenue-sharing arrangement as insurance against regional political instability, while the BLNS states view tariff revenue as their primary benefit.
• Member states are divided on the future structure of the union; respondents in Botswana and Namibia generally support deeper integration into a common market, while some South African respondents consider downgrading to an FTA a viable option.
• The proposed 'ANSA' axis (Angola, Namibia, and South Africa) intended to drive regional integration is currently unsupported by evidence of commitment from the Angolan side.
• Heads of State meetings in April and July 2010 established a new vision for SACU as an 'economic community with equitable and sustainable development' and agreed to a review of the revenue-sharing formula.

APA

Bertelsmann-Scott, T. (2010). SACU – One Hundred Not Out: What future for the Customs Union? South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2010/10/Occasional-Paper-68.pdf

Chicago

Bertelsmann-Scott, Talitha. SACU – One Hundred Not Out: What future for the Customs Union? South African Institute of International Affairs, 2010. https://saiia.org.za/wp-content/uploads/2010/10/Occasional-Paper-68.pdf.

Wikipedia

{{cite report |last1=Bertelsmann-Scott |first1=Talitha |title=SACU – One Hundred Not Out: What future for the Customs Union? |publisher=South African Institute of International Affairs |date=September 2010 |url=https://saiia.org.za/wp-content/uploads/2010/10/Occasional-Paper-68.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bertelsmannscott2010sacu, author = {Bertelsmann-Scott, Talitha}, title = {{SACU – One Hundred Not Out: What future for the Customs Union?}}, institution = {South African Institute of International Affairs}, year = {2010}, month = sep, url = {https://saiia.org.za/wp-content/uploads/2010/10/Occasional-Paper-68.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }