At the 8th Summit of the Southern African Customs Union (SACU) held in Ezulwini, Eswatini on June 29, 2023, President Cyril Ramaphosa spoke to Union leaders about the challenges facing the global economy and the importance of collaboration and cooperation within SACU.
Global Crises and SACU’s Evolution
The Summit was held amidst unprecedented global crises, including the aftermath of COVID-19, the Russia-Ukraine conflict, and ongoing geopolitical tensions. These factors, along with food and energy shortages, surging inflation, and the climate emergency, have led to low global economic growth rates.
SACU, founded in 1910, is the oldest Customs Union in the world and has adapted over time to the changing political and economic landscape. It has played a significant role in promoting regional integration and cooperation among its member countries, with a focus on trade and industrial policies.
However, given recent global developments, SACU’s effectiveness in responding to member countries’ needs and achieving its objectives requires reevaluation. President Ramaphosa emphasized the importance of SACU pursuing a developmental role within the region, continent, and worldwide.
Uniting for a New Global Financing Pact
At the Summit for a New Global Financing Pact in Paris, African countries called for industrialized nations to honor their commitments to developing economies and for the reform of multilateral development and financial institutions. The ultimate goal is to establish a world order that accommodates developing countries, providing them access to capital, sovereignty, and the right to develop their industries.
Prioritizing Regional Integration and Economic Diversification
SACU’s Strategic Plan, adopted in June 2022, serves as the foundation for executing the Union’s aspirations. To deepen regional integration, the Union must strengthen ties among its five member states and prioritize initiatives that promote spatial development, industrialization, exports, and investment. The member countries can capitalize on opportunities presented by the African Continental Free Trade Area by diversifying their economies and focusing on regional manufacturing linkages.
SACU must prioritize economic infrastructure, including the expansion of renewable energy capacity, roads, railways, ports, airports, telecommunications, and water infrastructure. By diversifying their economies, increasing intra-Africa trade, and deepening integration, the member countries can strengthen their collective power amidst global challenges.
SACU’s Commitment to Fostering Mutual Prosperity
The Union’s collective revenues can support industrial capacity and infrastructure development within the region, as Africa seeks to increase its share in global trade from the current 3 percent. To do so, SACU needs clearly articulated programs, sufficient resources, a robust governance framework, and a commitment to executing the Strategic Plan.
In conclusion, the 8th Summit of the Southern African Customs Union was a crucial platform for discussing the pressing issues facing the global economy and the role of SACU in mitigating their impact on member countries. By prioritizing regional integration, infrastructure development, and economic diversification, the Union can continue to serve as a vital instrument for deepening African economic integration and fostering mutual prosperity.
