Conserns raised over Sacu reliance

MBABANE -- Lesotho and Swaziland business development organisations met last week to seek ways to expand their countries’ government revenue base beyond receipts from the Southern African Customs Union (Sacu). While Botswana and Namibia receive 30% of their revenues from Sacu receipts, Lesotho and Swaziland rely on Sacu to pay 65% and 70% of their bills respectively. Both small, landlocked, resourceschallenged countries face collapse should Sacu receipts dry up or be reduced. “The sustenance of the Sacu regime is questionable, which also renders the sustainability of our economies questionable and therefore calls for us to find ways of meeting our internal budgets as well as ensuring job creation as opposed to depending on South Africa,” said Robert Likhanga, CEO of the Basotho Enterprises Development Corporation (BEDCO) at a press conference. BEDCO officials met with their counterparts from the Swaziland Enterprises Development Company (SEDCO) and with officials at the Ministry of Commerce, Industry and Trade. “It’s lights out for Swaziland and Lesotho if the Sacu tap runs dry. We’d see a complete meltdown. The only thing that separates Swaziland and Lesotho today from ‘failed state’ status is Sacu money,” said a source with the Swaziland Chamber of Commerce. Ways to develop indigenous businesses and industry were discussed by the business development agencies as a means of generating new tax revenues. Swaziland has enjoyed some success retrieving delinquent tax payments through its recently formed Swaziland Revenue Authority, which has brought to book former tax evaders. But the new tax revenue comes from cracking down on existing businesses and individuals and does not reflect new revenue streams. BEDCO and SEDCO aim to expand small businesses to boost their national economies. “Although Botswana is more advanced economically, we (Botswana, Lesotho and Swaziland) have common challenges,” said Likhanga. The days are over when South Africa can subsidise Lesotho and Swaziland’s economies through another means, as a provider of employment for migrant labour. While Botswana’s position is better, the business development bodies felt either Lesotho and Swaziland should find ways to make their economies self-sufficient or face government shut downs if South Africa can no longer offer foreign aid via Sacu allowances.