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

This research paper by the South African Institute of International Affairs (SAIIA) examines the crisis facing the Southern African Customs Union (SACU) as it celebrates its centenary. The author analyzes how Economic Partnership Agreement (EPA) negotiations with the European Union and a shrinking revenue pool have threatened the organization's stability, potentially leading to its downgrade from a customs union to a free trade area. The paper combines general analysis with questionnaire results from policymakers in South Africa, Botswana, Namibia, and Angola to explore the divergent interests of member states regarding revenue sharing, industrial policy, and regional integration.

• SACU is currently facing a crisis that poses a real threat of collapse, driven by the loss of value in the revenue pool and tensions arising from Economic Partnership Agreement (EPA) negotiations.
• The 2002 SACU Agreement, which intended to introduce democratic institutions, dispute settlement mechanisms, and common policies on agriculture and industrial development, has largely not been implemented.
• The global financial crisis significantly impacted the SACU revenue pool, with some reports indicating a decline of between 34% and 60%.
• The signing of Interim Economic Partnership Agreements (IEPAs) by Botswana, Lesotho, and Swaziland, despite South African objections, catalyzed the current crisis and threatened the common external tariff (CET).
• South Africa has expressed a willingness to withdraw from SACU if the IEPAs are implemented in their current form, which would severely impact the BLNS states due to their fiscal dependence on the revenue pool.
• There is a significant divergence in how member states perceive the benefits of SACU: South Africa views the revenue-sharing arrangement as insurance against regional political instability, while Botswana and Namibia prioritize tariff revenue.
• South Africa's Department of Trade and Industry (DTI) under Minister Rob Davies has shifted toward a 'production-led' regional integration strategy, which may prioritize network infrastructure over formal customs union arrangements.
• The Heads of State (HoS) have attempted to resolve the crisis by establishing a new vision for SACU as an 'economic community with equitable and sustainable development' and agreeing to a review of the revenue-sharing formula.
• Research into a potential 'ANSA axis' (Angola, Namibia, and South Africa) suggests that while South African officials value the idea, there is little evidence of a clear strategy or commitment from the Angolan side.
• The future of SACU is contested, with some South African respondents viewing a downgrade to a Free Trade Agreement (FTA) as viable, while respondents in Botswana and Namibia favor deeper integration into a common market.

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} }