Namibia hit by Sacu deficit

NAMIBIAN revenue from the Southern African Customs Union (Sacu) will be hit by an ‘income deficit’ in the regional customs body because of the global economic crisis.

Namibia receives almost 40 per cent of its national income via Sacu.The other Sacu members are Botswana, Lesotho, Swaziland and South Africa. Asked by an official of the Bank of Namibia during a presentation on Sacu yesterday, Sacu Executive Secretary Tswelopele Moremi confirmed that ‘a deficit exists’.’The five member states were informed about the (coming) deficit in December last year. A special Sacu meeting will be held soon to decide on the way forward with regard to the deficit,’ Moremi said. She would not disclose figures.In March, South Africa’s former Deputy Foreign Minister Sue van der Merwe said Sacu expected a N$6,8 billion decline in revenue for 2009 due to lower customs duties paid. The overall revenue pool stood above N$30 billion a year ago.Namibia’s income from the Sacu revenue pool amounted to around N$8,5 billion in the 2008-09 financial year. During the 2007-08 financial year this figure was N$8 billion, up from N$6,4 billion in 2006-07. In her Budget speech two months ago, Finance Minister Saara Kuugongelwa-Amadhila projected an even higher Sacu income of N$9,3 billion for 2009-10.Also in March, Standard Chartered Bank warned in a report that Sacu revenue is expected to tumble in this financial year due to the contracting global economy. The bank’s research analyst for Africa, Alex Sienaert, based in London, said in the report: ‘The total Sacu transfers to BLNS countries will decline significantly this year and next, and look to be around 10 per cent lower in nominal terms by 2010 than they were in 2008.’The decline may be considerably larger. Since the receipts have funded around half of BLNS country spending in recent years, this decline poses a major challenge.’ During the 2007-08 fiscal year, Sacu revenue accounted for 39 per cent of the national income in Namibia, 25 per cent in Botswana, 57 per cent in Lesotho and 60 per cent in Swaziland. According to the Standard Chartered Bank report, transfers to the Sacu revenue pool are expected to decline by 3,5 per cent year-on-year during the fiscal year 2009-10 to N$ 27,9 billion – one billion lower than in 2008. ‘Given the severity of the global downturn, these are likely to be the best case scenario for Sacu revenues, which could even fall further,’ according to Sienaert’s report.’brigitte@namibian.com.na