Tuesday, October 19, 2021

SACU Summit: Another talk-show on its way

This past week we have been told, by the Minister responsible for Trade and Investments, Vincent Seretse that we should brace ourselves for yet another talk-show. Well he did not say that directly but somehow that was part of a take-home message from the supply committee speech he read in parliament on Thursday. 

For the sake of those who might have missed it, Seretse told Parliament this past week that the Southern African Customs Union (SACU), which Botswana is a member of, will soon start to have its own summits. 

According to Seretse, the SACU 2002 Agreement which was operationalized in 2004 has since been amended to include the SACU Summit within the oldest customs union’s structures. The Summit will be the highest decision-making body, he said. This could mean that it is highly likely to be structured or rather attended by both ministers and head of states as key decision makers in their respective countries. 

To be frank we should not expect nothing but a talk show just like with other forums/summit or whatever fancy names they usually give. If anyone of us doubt, we should take a few lessons from the developmental bloc ÔÇô the Southern African Development Community (SADC). All the member states of SACU are also doubling as SADC members thus privy to what happens in both groups. 

For so many years, leaders of SADC have been meeting but nothing apart from shallow communiqu├®s have been produced from such summits. The only thing that SADC member states more especially who play host (like Botswana did in 2015) point out is usually expenditure bill of hosting the fifteen Heads of States and government officials. 

To date, SADC has adopted more than 30 protocols and declarations to harmonise policies and legislation over the past two decades. Most have been ratified by member states, but implementation and integration into national policies remain weak. 

However what has since come over the years, more especially at the 2015 summit which was held here in Botswana is the admission by the leaders as well as the SADC secretariat that member states have been too much ambitious when it finalised its regional indicative strategic development plan (RISDP) 2003 ÔÇô 2018 some several years ago.  

For those who have not been following the SADC’s ambitious plans closely, the 2003-2018 RISDP had envisaged that the economic integration in the region would proceed in stages, from a Free Trade (FTA) by 2008, a Customs Union when South Africa was hosting the World Cup (2010) as well as a common market by 2015, Monetary Union by 2016 and economic Union with single currency by 2018. We are sorry to announce that none of the above has been achieved apart from the Free Trade Area which also has not been fully implemented but rather a work in progress if we were to borrow that term for manufacturing accountants. 

The region has failed to establish a customs union or even set a single currency. The region has also failed to develop a fully fledged common market. What is shameful is the fact that no one, whether political leaders or the SADC secretariat could give a convincing reasons why only one component of the 2003-18 RISDP has been achieved.  

Regional technocrats have been cautioning for some time that the ambition to form a customs union in SADC was unrealistic given the asymmetry in development levels in the region. Just on the first component of FTA, members seems to be very reluctant to agree on the setting of tariffs. This is so partly because some only see themselves as consumers while others see themselves as producers only. 

At some point, in this same space, we gave the power shortage in the region as a good example of this asymmetry in regional development. Botswana, located centrally, has vast coal that regional countries, more especially South Africa was at some point interested in. Through the Mmamabula Energy Project (MEP), the tiny country made an attempt to export 75 percent of power to the region. However, due to lack of buy-in from power utilities including South Africa’s Eskom, the project has since been scaled down from its original 2400 MW. It seems South Africa wanted all or nothing. This happens despite the fact that every two years, Presidents of Botswana and South African meet for the Bi-National Commission that tracks cooperation between the two trading partners. On paper, this initiative seems like a step in the right direction, while in reality South Africa is still the senior partner as seen by the trade imbalance between the two trading partners. 

It is quite evident that diverse interests continue to cause clashes over trade policy objectives. So it interesting to note that oldest customs union seeks to start its own talk show. Shouldn’t the focus be on trade facilitation – easing the cost of trade and eliminating nontariff barriers? 

The #Bottomline therefore is that while the decision to establish a highest decision-making body in the form of a summit is not totally bad, the most urgent action to take is to establish a regional integration with proper linkages between industrialization and market liberalization. The strategy will bear the intended results only if matched with practical actions and needed resources, both human and financial. Not being too much ambitious theoretically and coming up with so many but useless summits under different names. 

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