n AfricaGrowth Agenda - Some thoughts on policy options for customs revenue allocations of the envisaged Southern African Development Community Customs Union

Volume 2013, Issue 7
  • ISSN : 1811-5187


Twelve member states have signed the Southern African Development Community (SADC) Free Trade Area (SADC-FTA) agreement in January, 2008. Angola, Democratic Republic of Congo and Seychelles are yet to join the Free Trade Area (SADC, 2011). This was aimed at reducing tariffs on 85% of intra-regional imports. According to the Regional Indicative Strategy Development Plan (RISP), the next step in the regional integration roadmap within SADC is the establishment of a Custom Union (CU) which was envisaged by 2010, but delayed due to capacity problems and late implementation of the SADC-FTA. However, the proposed transition from the SADC-FTA to a SADC-CU presents a number of challenges that may hinder progress. One major challenge is the establishment of a single Common External Tariff (CET) which is complicated by the fact that within SADC there are currently 11 individual tariff policies that will need to converge into a single and uniform tariff regime (DNA, 2007). This, in turn, will necessitate an agreement on modalities regarding the collection and allocation of tariff revenue within the CU. The aim of this article is to provide a theoretical comparison of various options for revenue allocations, and, to provide recommendations on the optimal policy option from the perspective of the Botswana, Lesotho, Namibia and Swaziland (BLNS) countries.

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