The Southern African Development┬áCommunity, (SADC), is mulling over plans to establish a regional customs union as the member countries are working on deepening economic integration among themselves, Finance and Development Planning Minister, Kenneth Matambo, said.
Presenting the national budget for┬á 2011/12 in parliament on Monday, he said the 14 member states┬á of SADC are working around the clock to┬á create┬á a regional customs union.
“The next step following the launch of the FTA (Free Trade Area) is establishment of the SADC Customs Union, which was targeted for 2010 as per the SADC Regional Indicative Strategic Development Plan,” he said.
The SADC FTA was established in 2008 widening potential for companies in countries with a small population size, such as Botswana, to much bigger regional population of 247 million people.
Matambo said as part of the plan to fast track the establishment of the proposed customs union, a high level team of experts has been mobilized to work out a┬á detailed plan.
The move will involve agreeing on the tariffs levels that would be charged against third parties and, in turn, on revenue sharing formula. Further, some of the issues will include the principle of variable geometry since regional countries are in varying stages of development.
“They have also agreed that the principle of variable geometry would be applied because of the divergence in economic conditions of Member States. This would entail each Member State joining the SADC Customs Union when it reaches the required state of readiness determined on the basis of the agreed levels of tariffs against third parties,” he said.
A team of experts is expected to report back to the Council of Ministers of Trade and Finance before the end of this year.
The member┬á states of the 30-year-old organization are Angola, Botswana, Democratic Republic of Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe.
Meanwhile, the Southern African Customs Union (SACU)┬áexperts┬áhave┬áembarked on the review of its┬árevenue sharing┬áarrangement with the draft report handed in last month.