South African Customs Union is enhancing efficiency in regional trade

The Southern African Customs Union (SACU) was founded in 1910 and is the world's oldest functioning Customs Union. Its goal is to promote frictionless trade and strengthen the regional and global positions of the member countries - Botswana, Eswatini, Lesotho, Namibia, and South Africa.

In the year 2023, SACU reported 281 USD Billion in total trade of which Intra-SACU trade was estimated at 56 USD billion in 2023. Europe, Africa, China, the Gulf Cooperation Council (GCC), and member states of the Association of Southeast Asian Nations were registered as among the top SACU trade partners during this same period.

South Africa accounted for 70% of SACU's trade value in 2023. This is despite a 1.6% slowdown in GDP growth due to geopolitical conflicts, climate disasters, and ongoing load shedding in the country's power supply. Namibia and Botswana were particularly affected by the slowdown in South Africa (SA), given their reliance on the SA market.

This year, forecasts predict South Africa's GDP growth to reach 2.2% as pressures ease. Namibia and Botswana, on the other hand, will experience 3.8% and 2.7% growth in total trade, respectively, driving SACU's overall growth rate to 2.7% from 2023.

Significant Developments in Customs made by SACU

SACU has recently made significant strides toward increasing intra-regional trade. These efforts include implementing a number of strategic initiatives and reforms to streamline customs procedures and lower trade barriers. They represent a watershed moment in the push for greater economic integration and smoother trade flows.

SACU has, for example, harmonised customs-related issues such as external tariffs and excise duties, resulting in consistency across member states. As a result, SACU is reducing friction in the regional supply chain. This, in turn, enables traders to move their products and raw materials across member-state borders without encountering unnecessary barriers.

Second, the implementation of a single-window administrative structure ensures that traders face fewer administrative and documentary burdens and spend less time at borders. As a result, import and export costs have been significantly reduced.

SACU has also implemented automation and infrastructure upgrades to modernise customs clearance procedures. The union has enabled faster processing of goods through the implementation of digital systems such as Extranet and e-forms, enhancing overall trade efficiency by automating the customs process. Leveraging information and communications technology also encourages member states to cooperate by allowing for faster information sharing.

Furthermore, initiatives such as the establishment of intra-SACU customs borders and One-Stop Border Posts have contributed to smoother trade flows and increased cooperation among member states.

Growing trade in Southern Africa

The advancements made by the South African Customs Union aims to contribute to a more favourable trading environment. Frictionless cross-border movement of goods is expected to boost industrialisation, exports, and investment in the region.

The importance of transport and logistics networks in driving SACU's agenda was highlighted at a recent SACU round table meeting, where delays at border crossings were identified as a significant challenge. The movement of goods across borders poses unique challenges that necessitate custom logistics solutions. Logistics partners operating in the SACU region must be able to plan and execute while taking into account changing rules as they move from one country to another. Logistics partners play a critical role in overcoming these challenges, from navigating complex regulatory environments to managing cross-border transportation networks.

As customs procedures evolve to meet changing priorities, businesses must adapt by partnering with logistics providers who are up to date on customs changes. To excel in the SACU region, you need a logistics partner who can navigate customs regulations and facilitate efficient cross-border transportation.

Discover more about Maersk’s Customs Services and how it can benefit your supply chain.