By: David Shoombe
The 9th Summit of the Southern African Customs Union (SACU) Heads of State has agreed to establish a Regional Innovative Funding Mechanism with an initial capitalisation of N$5 billion spread over the 2027/28 and 2028/29 Financial Years.
The Heads of SACU States, including Namibia’s president, Netumbo Nandi-Ndaitwah, met in Cape Town last week, according to the updates from SACU Secretariat.
They have directed that further technical work should be undertaken to establish the fund’s governance and management arrangements, recapitalisation, access criteria, project pipeline or profiling, establishment of a network of DFIs and the private sector, legal requirements, hosting arrangements, and opportunities to mobilise additional sources of funding.
They have also agreed that the N$5 billion funding will come from the Common Revenue Pool and will be available to support development projects across all SACU Member States.
The heads of state have also reaffirmed the importance of SACU’s Industrialisation, Export and Investment Promotion work programme as a key driver of SACU’s long-term relevance, inclusive growth, and sustainable development.
Noting the progress in regional value chains, export potential mapping, investment facilitation, and cross-border industrial cooperation.
The Summit also highlighted progress in the automotive sector, including work on a Smart Specialization Strategy for Automotive and Complementary Green Mineral Beneficiation, collaboration on the battery value chain, and possible component manufacturing under the SADC Hub and Spoke model.
The Summit urged the Council of Ministers to speed up the implementation of identified cross-border value chains to advance a shared industrial development agenda across SACU.
Speaking to fellow Heads of State, the Chairperson of the Southern African Customs Union (SACU) and President of South Africa, Cyril Ramaphosa, emphasised the importance of unity among SACU member states and the need to support one another during difficult times.
“We gather today at a moment when the global economy is being reshaped before our eyes. Trade patterns are changing. New technologies are redrawing industrial competitiveness. Supply chains are being reconfigured. Around the world, nations are reorganising themselves for a far more uncertain future. In such a world, no African country, regardless of its size, can prosper alone. Our strength will increasingly depend on the strength of our region,” said Ramaphosa.
Ramaphosa has noted the importance of collaboration and the sharing of resources for SACU to become globally competitive. He indicated the need to enhance Eswatini’s manufacturing base, Lesotho’s textile sector, Namibia’s green hydrogen and uranium processing potential, Botswana’s diamond and South Africa’s automotive and steel capacity to strengthen a regional industrial ecosystem that can compete on a global level.
President Netumbo Nandi-Nandi-Ndaitwah, upon attending her first SACU Summit as a Head of State, indicated that she is happy with the atmosphere in which the SACU Summit was conducted and emphasised the importance of reducing overdependence on external markets and strengthening regional cooperation, industrialisation, and intra-African trade.
Nandi-Nandi-Ndaitwah welcomed the N$5 billion SACU Regional Innovative Funding Mechanism, which she indicated will support industrialisation and strategic cross-border projects aimed at driving economic growth and job creation across the region.
SACU is the world’s oldest customs union, established in 1910. With its collection of customs and excise duties into a common revenue pool and distributing the revenue among its member countries, it becomes a dependable contributor to the national budgets of its members.
Trade in goods between member countries is duty-free, and SACU applies a Common External Tariff (CET) on goods imported from outside the customs union.
In the 2026/2027 National Budget, SACU contributed N$24.3 billion to Namibia’s revenue.
Ben Uugwanga, a developmental consultant, stated that Namibia is strategically positioned to be part of SACU, and being in the customs union with an economic powerhouse such as South Africa will increase Namibia’s development and allow Namibia to leverage the Africa Continental Free Trade Area.
