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The Botswana Council of Ministers – to which the minister of finance and trade are members – has set up a task team to review the Southern African Customs Union’s (SACU) revenue sharing formula, it was announced on Tuesday.

Edgars Sisa, the Botswana High Commission secretary of economics, told Business Report that the task team – launched last month – would look at the weaknesses in the revenue sharing formula.

“The task team is to identify issues which may need to be reviewed in the current revenue sharing formula,” Sisa said. “An independent examination of the identified issues will be done before the renegotiation process can commence.”

He would not reveal further details as the task team was still working on its review.

The launch of the task team comes amidst an outcry at the amount of money that South Africa is giving to its neighbours has become the subject of hot debates among economists and international relations experts.

South Africa is giving more than 1 percent of its gross domestic product (GDP) – about R28 billion in the 2009/10 budget – to its poor neighbours, it was disclosed last week.

Mike Schussler, an economist at Economists.co.za, speaking to Business Report last week, said this money was more than developed countries, such as Norway and Sweden, were giving to their poor neighbours.

He said giving away so much money was “silly” considering that South Africa was a developing economy.

Schussler added that South Africa needed a fairer system that gave more of the customs duties to “us and would help us grow our economy”.

Tsidiso Disenyana, the deputy programme head at South Africa Institute of International Affairs, said as revenues went down during the global financial crisis, the task team could be looking at ways of increasing them. But this is all speculation at this stage. “We need to first establish the objectives of this task team,” Disenyana said.

Sisa said the task team would also deal with the strategic direction of SACU.

Meanwhile, the Botswana High Commission has given an assurance that Botswana had no intention of withdrawing its membership of SACU.

Sisa said Botswana remained committed to the objectives of SACU and acknowledged the importance of regional integration.

The Botswana Council of Ministers had agreed to the consolidation of SACU and the development of a vision for SACU to take the organisation forward.

Botswana was committed to this initiative just like all other member states of SACU. There was recently a rumour that Botswana wanted to quit SACU.

Source: Business Report