By King’s Correspondents
CAPE TOWN, SOUTH AFRICA – South Africa has committed itself to fostering greater industrial growth among its neighbours through the Southern African Customs Union (SACU).
This commitment was made by Finance Minister Enoch Godongwana when responding to questions on its long-standing economic dominance within SACU at a post-summit press conference here yesterday (Friday).
Hhukwini Member of Parliament Alec Lushaba has asked the minister on SACU’s 116-year history, noting that over three decades of regional democratic transitions, South Africa had remained an overwhelmingly dominant player in the SACU pool.
MP Lushaba highlighted the uneven development of electricity infrastructure, pointing out that neighbouring countries had not built independent capacity because it was simpler to import power from Eskom.
With South Africa now unable to shoulder the entire region’s burdens alone, he asked whether the new development fund signalled a genuine shift towards deliberately building industries in Botswana, Eswatini, Lesotho and Namibia.
In response, Minister Godongwana sought to separate ‘fact from fiction’ regarding SACU’s architecture. He explained that South Africa had historically managed tariff-setting for the region because other members initially lacked the institutional capacity. In exchange, the country agreed to a revenue-sharing formula under which nearly 50 per cent of the pool – generated overwhelmingly (98 per cent) by South African economic activity – is distributed to the other members.
The minister acknowledged that this arrangement had long been a source of tension. He recalled that early in his tenure at ministerial meetings there had even been proposals to scrap SACU entirely, but South Africa had rejected them as economically unwise for the region and, instead, officials had worked to preserve the union while reimagining its purpose.
Gondowane stated that South Africa welcomed industrialisation in its neighbouring countries. “It is not in South Africa’s national interest for Eswatini, Lesotho or Namibia to stagnate. If our neighbours are not growing, we are severely limiting our own export markets. We cannot thrive in isolation,” he said.
He pointed to examples of South African support for cross-border development, such as the Lesotho Highlands Water Project, which continues to receive significant funding and political backing because it benefits the wider region, including South Africa’s industrial heartland. He said should Lesotho advance hydropower or green energy initiatives, South Africa stands ready as an eager off-taker of that clean electricity.
Similarly, he said, Namibia’s emerging natural gas projects require a reliable off-taker to become commercially viable and South Africa is positioned to fulfil that role. The minister emphasised that the industrial and infrastructure projects discussed at the summit are designed as genuine cross-border joint ventures rather than isolated national efforts.
While conceding that execution of such plans had not always been as aggressive as needed in the past, Gondowane insisted that a reimagined SACU is explicitly intended to transform these ambitions into vibrant, active economies across the region.
