SACU Revenues Grow While AGOA Receipts Decline
Botswana will hope that the impasse in the ongoing negotiations between the EU and SADC countries on signing the Economic Partnership Agreement (EPA) does not adversely affect SACU from which the country raked in P6.6 billion in revenue pool receipts for the 2006/2007 financial year.
According to the Botswana Unified Revenue Services (BURS) annual report for 2007, Botswana's share from the common revenue pool increased from P3.9 billion in the previous year to P6.6 billion, an increase of P2.68 billion or 68 percent over the 2005/06 amount.
A significant proportion of the increase amounting to P1.4 billion or 52 percent resulted from the better than anticipated performance of the common revenue pool receipts, says Burs Commissioner General Freddy Modise.
This is attributed to the growth in the value of imports and excisable goods into the SACU area, which was largely fuelled by rising international commodity prices.
Botswana's share from the pool was nearly 16 percent of the total shares due to be paid to SACU member sates during 2007/08.
It is anticipated that the size of the pool will grow in spite of the continued reduction of average tariffs in SACU External Tariff resulting from the customs union's commitments under the World Trade Organisation (WTO).
The lower tariffs will make international commodity prices cheaper and result in increased volumes of imports into SACU.
During the year under review, the export of textile and apparel products exported to the United States, under the Africa Growth and Opportunity Act (AGOA) amounted to US$36.3 million (about P221.4 million), a decrease of 56 percent from 2005/06 exports, which stood at US$81.8 million (about P498.3 million).
The decrease is mainly attributable to the phasing out of textile and clothing quotas by the WTO, which has resulted in stiff competition from China and other Asian countries, says the report.
"It is anticipated that Botswana will continue to benefit from the scheme, particularly with the recent extension of the provision for least developed beneficiary countries to source fabric from third countries," says the Commissioner General.
"This provision, which was scheduled to expire in September 2007, has now been extended to 2012."
Being a middle-income country, Botswana has been granted a special dispensation to benefit from the scheme.
The country's imports under the Botswana/Zimbabwe Trade Agreement increased from P162,440 million during 2005/06 to P181, 334 million during the year under review. This was an increase of P18. 9 million or 11.6 percent.
Exports also increased, growing from P6,755 million during 2005/06 to P8,907 million during 2006/07, an increase of 31,8 percent.
During the year under review the Customs and Excise division processed a substantially greater amount of imports and exports.
Imports' declarations worth P18. 8 billion were processed in 2006/07, an increase of 16 percent as compared to the previous year, which stood at P16.2 billion.
Exports' declarations processed were worth P28 billion, an increase of 26 percent, from the P23 billion processed in 2005/06.
The overall growth in the value of exports is mainly attributable to diamond sales and the under-valuation of the pula relative to other currencies.
