SACU rules need urgent overhaul, economist warns

Not fair
Ogone Tlhage
  • 22 Hours Ago
Agricultural economist Wandile Sihlobo has called for urgent revision of trade rules within the Southern African Customs Union (SACU), citing a pattern of unfair trade practices by member states. His comments follow recent agricultural import blockades by Botswana and Namibia against South African produce, which he argues demonstrate a lack of good faith commitment to the regional trade bloc.



Botswana's import ban



In December, Botswana's ministry of agriculture issued a notice banning approximately 16 vegetable imports, effective immediately and indefinitely. The banned items include tomatoes, potatoes, cabbage, onions, watermelon, beetroot, carrots, lettuce, ginger, peppers, garlic, and butternut squash.

The impact on South African exporters is significant. While South Africa exports approximately US$218 million (R3.69 billion) in vegetables annually to global markets, Botswana represents a meaningful portion of this trade—roughly 8% or R17.4 million in annual exports.



Sihlobo emphasised that the current SACU framework requires serious review. "At the moment, it requires a serious review for a number of reasons," he said. "There are some countries in this bloc that continually block South African products, particularly in agriculture. Namibia has blocked South Africa for some time—we are still restricted from exporting vegetables to Namibia."

He stressed that these recurring practices demonstrate an urgent need to reassess whether SACU's current structure serves the modern regional economy. "The frequent friction that we are experiencing, the limits that we are experiencing, it is an appropriate time to look into the SACU conversation to say, can it fit today's moment," Sihlobo added.



The case for communication



However, Sihlobo acknowledged that member states' desire to develop domestic agricultural production is understandable, provided it occurs through transparent dialogue. "It is understandable when they say they want to revive their own domestic agriculture production, and that can be done in sync and clear communication understanding about what is happening," he said.

He stressed that unilateral trade decisions contradict the fundamental principles of a customs union. "The reason this communication is necessary is because we are part of a customs union so you cannot just be doing some of the trade related aspects without the other member states," he said.



Local agricultural economist Wallie Roux offered a complementary critique, arguing that the real problem lies not in protecting domestic production but in how that protection is implemented. He contended that Namibia's Agronomic Board (NAB) is harming local consumers by imposing blanket bans rather than pursuing collaborative solutions.

"The NAB is not doing the consumers in this country any favour," Roux said. "The NAB's only focus is on their mandate to promote local production. Why not do a deal in SACU for a local market reservation—not to ban anything?"



Win-win solutions proposed



Since Namibia is a deficit producer of fruits and vegetables, Roux argued that a market reservation system—where local producers supply the domestic market up to their capacity, with imports filling the gap—would better serve both local farmers and consumers.



Roux highlighted a systemic danger in excessive trade protections: they create unintended consequences that ultimately harm the consumers they're designed to protect. He explained that trade interventions require control measures to manage their effects, and these control measures inevitably spawn circumvention attempts that necessitate further controls.

"Any intervention in an agricultural value chain requires one or more control measures to counterbalance the consequences of that intervention," Roux said. "The more interventions, the more control measures are needed."

This escalating cycle eventually leads to desperate measures like border closures, which deprive consumers of affordable, quality imports. "With the actual announced border closures wholesalers could import enough from South Africa," Roux noted, suggesting that a more measured approach would ultimately serve all stakeholders better.