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SACU SHOULD INCREASE AFRICAN TRADE IN GOODS, SERVICES

MBABANE - South Africa (SA) President Cyril Ramaphosa says SACU should contribute to substantially increase African trade in goods and services.

Ramaphosa was speaking during the 8th Southern African Customs Union (SACU) Summit. The SA president said as a region they could not be content that Africa’s share in global trade was a mere three per cent. He said this could be achieved if SACU member States could have clearly articulated programmes, sufficient resources, a robust governance framework and a commitment to execute the strategic plan. He wished SACU to continue to serve as an important instrument for deepening African economic integration as they strived to develop their economies, advance mutual prosperity and leave no one behind.

Shifts

Ramaphosa said the SACU meeting was held at a time when seismic shifts were taking place in the global economy. He said just as countries were beginning to recover in the aftermath of the COVID-19 pandemic, the global economy was further weakened by the Russia-Ukraine conflict and geopolitical contestation. Ramaphosa said as the United Nations (UN) Conference on Trade and Development noted earlier this year, food and energy crises, surging inflation, debt tightening and the climate emergency were all contributing to one of the lowest rates of global economic growth in decades. He said as the SACU, it was critical that they fulfilled their mandate if they were to withstand these global shocks and mitigate their impact on their respective countries.

“SACU is the oldest Customs Union in the world, having been founded in 1910,” said Ramaphosa. He highlighted that the SACU agreement had undergone several changes and improvements over the years to better reflect the prevailing political and economic environment.

Advancing

The SA president said as SACU, they had always been deliberate about using this union as a vehicle for advancing and deepening integration. He said they were working to achieve this integration through cooperation in trade and industrial policies. He said they sought to build cross-border value chains among all SACU member States, underpinned by regional infrastructure programmes. “The question for us is, to what extent have we been successful in this regard? And is SACU still fit for the purpose and able to respond effectively to the needs of member countries?” wondered Ramaphosa.

The president added that the geopolitical and economic shifts taking place across the world necessitated that they must be quite intentional about what they hoped to achieve as SACU. He said as SACU, they must be quite deliberate when it came to playing a developmental role in the region, on the continent and globally.

He noted that at the recent summit for a New Global Financing Pact in Paris, Africa spoke with one voice about the need for industrialised countries to meet their commitments to developing economies. He said nearly all countries present agreed on the need for the reform of multilateral development and financial institutions. Ramaphosa said ultimately, they strived for a world order that accommodated developing economy countries by having rules in respect of access to capital, sovereignty and the right to develop their industries.He said the SACU Strategic Plan adopted in June 2022 was the foundational document that executed the aspirations of SACU.

Forge

The president stated that as SACU, they must work to deepen regional integration in the customs Union and deliberately forge stronger ties among the five member States. He said South Africa believed that spatial development initiatives, industrialisation, exports and investment promotion and regional manufacturing linkages would enable the SACU countries to diversify their economies. “It will also enable us to take advantage of opportunities opened up by the African Continental Free Trade Area,” he said.  

He said for this to happen, they should prioritise economic infrastructure, especially scaling up renewable energy capacity, roads and railways, ports and airports, telecommunications and water infrastructure. He said they must discuss what they could do to diversify their economies, increase intra-Africa trade and deepen integration. “We are well positioned to use our collective revenues to support industrial capacity and infrastructure development within the Union,” said the president.