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Sacu courts heads of state

by Lesotho Times
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MASERU — The Southern African Customs Union (Sacu) wants stronger participation from heads of state and governments to give guidance to the regional body, Prime Minister Pakalitha Mosisili has said.

Addressing a press conference in Maseru on Monday, Mosisili said Sacu was mulling setting up a summit for heads of state and government to add more clout to the customs union.

Mosisili was recently in the Namibian capital, Windhoek, to celebrate the 100-year existence of the customs union, the oldest in the world.

“The Sacu council of ministers made a proposal for the introduction of the heads of state and government meeting. This will ensure that policies made by the heads of state have a strong legal standing,” Mosisili said.

Currently, the Sacu Council of Ministers which is made up of ministers from the five member states is the supreme decision-making body for the organisation.

The council formulates policies for the union.

Mosisili said the change would allow administrations from respective member states to give guidance and mentoring in the operations of Sacu.

“A decision was made to inaugurate a council of heads of state and government to be held in July in South Africa,” Mosisili said.

A report compiled by the Sacu Council of Ministers said the organisation needed to reform to meet current challenges.

The report called for the adoption of common policies within the union to deepen intra-Sacu regional integration.

Mosisili said Lesotho needed to find other sources of revenue if it was to stop its reliance on Sacu revenues.

Sacu revenue makes up about 60 percent of Lesotho’s government revenue.

The Sacu revenue is however expected to decline by about 60 percent this financial year because of the recent world financial crisis.

“The ministries are in the process of identifying other sources of revenue and more efficient revenue collection within the ministries.

“They may have to adjust some of the charges as some of them have not been changed for a long time,” he added.

He cited charges for traffic offences which are as low as M30.

The charges for traffic offences have not been adjusted since 1983.

Mosisili said Sacu heads of state had vowed to maintain political stability in their countries to ensure the sustainability of the customs union.

“The heads of state have made an assurance to maintain political stability in their respective countries and have also renewed their membership in Sacu,” Mosisili said.

The chief executive officer of economic policy and planning in the Ministry of Finance, Motena Tšolo, said the new revenue sharing formula adopted by Sacu ensured that even smaller members of the union benefited.

“In the new revenue sharing formula there is a development index component that gives allowance for lower developed countries such as Lesotho,” Tšolo said.

According to Tšolo Lesotho could have qualified to receive only about M300 million if the development index was not included.

The revenues accruing to a member state increase with the lower development index.

“We could have received a very small portion of the revenue pool because of our high imports,” she added.

Lesotho imports almost all goods that are used in the country with exports mainly focused on textiles and diamonds.

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