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Promoting economic

Promoting economic integration through economic development His Excellency Dr. Mokgweetsi Eric Keabetswe Masisi, President of the Republic of Botswana and Chairperson of the SACU Summit, together with the SACU Ministers of Trade and Industry during the Investment Roundtable: Hon. Mmusi Kgafela, Minister of Investment, Trade and Industry of Botswana; Hon. Senator Manqoba Khumalo, the Minister of Commerce, Industry and Trade of Eswatini; Hon. Dr. Thabiso Molapo, the Minister of Trade and Industry of Lesotho; Hon. Lucia Iipumbu, the Minister of Industrialisation and Trade of Namibia; Hon. Fikile Majola, the Deputy Minister of Trade, Industry and Competition of South Africa; Hon. Beauty Manake, Assistant Minister of Investment, Trade and Industry, Botswana; the Executive Secretary of SACU, Ms. Paulina M. Elago as well as the Moderator and Chief Executive Officer of Citizen Entrepreneurial Development Agency, Mr. Thabo Thamane, at the official opening of the SACU Investment Roundtable held on 12 – 13 April 2022, in Gaborone, Botswana. An investment roundtable was hosted by SACU on 12-13 April 2022 to highlight the Custom Union’s drive to promote industrialisation in the region. Paulina Mbala Elago, Executive Secretary of the Southern African Customs Union, highlights the critical role of the development of value chains for the process. What are the goals of SACU? One of the objectives of the Customs Union is to promote integration through economic development so that we are looking at the welfare of citizens. Regional integration is about economic development and integrating our economies into the global economy. We do that through expansion of trade and through industrialisation. This is the origin of the investment roundtable. Our aim is to promote industrialisation through the development of regional value chains. We have identified specific priority sectors through which we want to enhance industrialisation: agroprocessing, textiles and clothing, pharmaceuticals, cosmetics and natural oils. The key is to position ourselves to take advantage of the African Continental Free Trade Area (AfCFTA). Traditionally, we have been focusing on customs modernisation issues and sharing formulas but as a union we need to position ourselves to take full advantage of the AfCFTA, which we are extremely excited about. We also require investment and this is how the investment roundtable came about. How important is investment in infrastructure, ports, railways and logistics? It is equally important. In terms of how we position ourselves to take advantage of the free trade area we have also identified four priorities: industrialisation through the development of regional value chains, prioritising investment in export promotion, financing for industrialisation and finally, trade facilitation and logistics. We want to ensure that the environment is conducive for trade so we need to remove any barriers to trade and enhance efficiency in terms of crossborder trade. For that, we will be looking at infrastructure and logistics and that will take us to ports, border post infrastructure and systems. We need to embrace digitisation to enhance efficiency and facilitate trade, thereby reducing the time and cost of trading. 44 | www.opportunityonline.co.za

REGIONAL TRADE Is SACU’s role more to do with policy, documentation and tariffs than with how efficient a specific port is? The policy and regulatory environment is our area, but obviously we will also be identifying infrastructure-related impediments that frustrate or delay trade. For example, on borders we want to see one-stop border posts. That is a clear priority but also for the systems to have an integrated border management system, as well as dealing with any border measures or specific standards that create barriers to trade. They need to be addressed if we want to make a meaningful change. It is a holistic approach. Not all members of SADC are members of SACU, are they? All members of SACU are also members of SADC but SADC is a free trade area whereas SACU is a customs union. The level of integration in SACU is deeper than in SADC. Free trade area integration also covers a wide range of issues including social, political and security, whereas SACU integration is a customs union focused primarily on goods. There is a big difference because we have a common external tariff which means we apply the same customs duties across imports coming into the union but there is free movement and free flow of goods within the common customs area. Within SADC each country maintains autonomy over its tariff policy. Has there been or will there be an ambition to grow SACU to cover SADC? It’s really up to those Member States who are interested in joining SACU but some years ago SADC actually set an ambition of creating a customs union but that has not been achieved. We are members of SADC and we want to ensure alignment. For example, our industrialisation recognises the SADC industrialisation strategy. We do not foresee a situation where we reinvent or duplicate but rather that we reinforce. Are there some countervailing pressures, enhanced by Covid-19, where some countries want to engage in a kind of economic nationalism? Is that a concern? Covid-19 has revealed a lot of challenges but also opportunities. In the heart of Covid-19, you saw countries introducing measures to restrict the sale and export of certain commodities but they soon realised that would not work because we live in such a globally integrated world. There is an incentive to produce goods locally because Covid has revealed that the reliance on others for certain goods and commodities can also be a risk. But it has to be done in a manner that promotes local production. This is what we are doing with our industrialisation agenda – it is really to enhance the local production capacity but not to the exclusion of the global supply chains and value chains. So-called “master plans” for specific industries don’t worry you? One needs to understand the concept of master plans but I don’t see that being any different from a country that says, we need a strategy for industrialisation in a specific sector. That is essentially what we are doing at the regional level. We are looking at strategies to develop the production capacity and output in the textile sector so that could be a master plan for SACU. One wants to ensure that one looks at all the elements that are required to enhance competitiveness and spur industrialisation. It needs to be done in a much more systematic manner. Countries will always have development strategies for a particular sector, I don’t think there is anything wrong with that. Within SACU there will be alignment; each country needs to work on a national strategy that will fit into a regional strategy. What are you hoping the Investment Roundtable will achieve? Number one is an engagement between SACU Member States and the private sector on investment opportunities in the priority sectors. Secondly, we have 36 projects from across the region that are being promoted. Thirdly, establishing that we as a customs union are driving the industrialisation agenda that is centred around the development of regional value chains, working collaboratively with the private sector. Also, positioning the customs union as a hub for production to take advantage of the AfCFTA. Is there a particular private sector body that liaises with SACU? We work through private sector groups in Member States. As part of the build-up to this Investment Roundtable we have had sectoral roundtables on textile and clothing and on agro-processing. We have had engagements at sector level with private sector organisations and private sector companies. Some of them have made recommendations for setting up a network. If you look at meat and meat products, there are existing associations and interest groups. We have a developmental approach to the pharmaceutical industry because this is an area where we don’t have much production capacity in the region. How do we develop this industry and sector in the region? Will there be more roundtables in the future? Normally our Member States will hold this sort of event individually. We are asking, how can we as a union move the industrialisation agenda together and position ourselves as a manufacturing hub? It becomes critical that we engage everyone. This is the first investment roundtable for SACU: we look forward to active participation of the private sector and other key stakeholders. We are very excited about this roundtable being the first of its kind and certainly we hope that we will have many more to come. www.opportunityonline.co.za | 45

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