RESTRICTED  
  
WT/TPR/G/447  
20 September  2023 
(23-6238) Page: 1/63 
Trade Policy Review Body  Original:  English  
 
  
TRADE POLICY REVIEW  
REPORT BY  
SOUTHERN AFRICAN CUSTOMS UNION (SACU)  
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex  3 of the 
Marrakesh Agreement Establishing the World Trade Organization), the policy statement by SACU  is 
attached.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the 
first session of the meeting of the Trade Policy Review Body on SACU . WT/TPR/G/447  • Southern African Customs Union  
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  Contents  
SOUTHERN AFRICAN CUSTOMS UNION  ................................ ................................ ............  6 
1 INTRODUCTION  ................................ ................................ ................................ ............  6 
1.1 Regional economic context  ................................ ................................ .............................  6 
1.2 The SACU Customs Union  ................................ ................................ ...............................  6 
1.3 SACU Institutions  ................................ ................................ ................................ ..........  7 
1.4 Common policies  ................................ ................................ ................................ ...........  7 
1.5 Common External Tariff  ................................ ................................ ................................ .. 8 
1.6 Unified engagements with third parties  ................................ ................................ ............  8 
1.7 The SACU Strategic Plan 2022 -2027 ................................ ................................ ................  8 
BOTSWANA  ................................ ................................ ................................ ....................  11 
1 INTRODUCTION  ................................ ................................ ................................ ..........  11 
2 BOTSWANA'S MACROECONOMIC POLICY DEVELOPMENTS  ................................ ..........  11 
2.1 Gross domestic product  ................................ ................................ ................................  11 
2.2 Fiscal Policy  ................................ ................................ ................................ ................  11 
2.3 Monetary Policy  ................................ ................................ ................................ ...........  12 
2.4 Economic outlook  ................................ ................................ ................................ ........  12 
3 TRADE AND TRADE -RELATED POLICY DEVELOPMENTS  ................................ ................  13 
3.1 Trade policies and strategies  ................................ ................................ .........................  13 
3.2 Multilateral, regional and bilateral trade arrangements  ................................ .....................  15 
3.3 Intellectual Property and Copyrights  ................................ ................................ ..............  15 
3.4 Government procurement  ................................ ................................ .............................  15 
4 SECTORAL POLICY DEVELOPMENTS  ................................ ................................ ............  16 
4.1 Manufacturing sector  ................................ ................................ ................................ ... 16 
4.2 Agriculture sector  ................................ ................................ ................................ ........  16 
4.3 Mining sector  ................................ ................................ ................................ ..............  16 
4.4 Energy  ................................ ................................ ................................ .......................  17 
5 TRADE–RELATED TECHNICAL A SSISTANCE  ................................ ................................ . 17 
6 CONCLUSION  ................................ ................................ ................................ ..............  18 
ESWATINI  ................................ ................................ ................................ ......................  19 
1 ECONOMIC AND TRADE ENVIRONMENT  ................................ ................................ ....... 19 
1.1 Eswatini's economic environment  ................................ ................................ ..................  19 
1.2 Trends in foreign trade  ................................ ................................ ................................ . 19 
2 ESWATINI'S INTERNATIONAL TRADE RELATIONS  ................................ ......................  20 
2.1 The Multilateral Trading System  ................................ ................................ ....................  20 
2.2 The African Continental Free Trade Agreement (AfCFTA)  ................................ ..................  20 WT/TPR/G/447  • Southern African Customs Union  
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  2.3 Preferential Trade Agreements  ................................ ................................ ......................  20 
2.4 SADC -EU-EPA ................................ ................................ ................................ .............  20 
2.5 SACU – EFTA FTA  ................................ ................................ ................................ ........  20 
2.6 SACU – Mercosur Preferential Trade Agreement  ................................ ..............................  21 
2.7 COMESA free trade area  ................................ ................................ ...............................  21 
2.8 SADC FTA  ................................ ................................ ................................ ...................  21 
2.9 COMESA -EAC-SADC Tripartite -FTA negotiations  ................................ ..............................  22 
2.10 Africa Growth Opportunity Act (AGOA)  ................................ ................................ .........  22 
3 NEW TRADE REFORMS  ................................ ................................ ................................ . 22 
3.1 Industrial Development Policy  ................................ ................................ .......................  22 
3.2 Special Economic Zone Act  ................................ ................................ ...........................  24 
4 TRADE – RELATED TECHNICAL ASSISTANCE  ................................ ...............................  24 
5 CONCLUSION  ................................ ................................ ................................ ..............  25 
LESOTHO  ................................ ................................ ................................ ........................  26 
1 INTRODUCTION  ................................ ................................ ................................ ..........  26 
2 MACROECONOMIC DEVELOPMENTS  ................................ ................................ .............  26 
2.1 Gross domestic product  ................................ ................................ ................................  26 
2.2 Fiscal policy  ................................ ................................ ................................ ................  26 
2.3 Monetary policy  ................................ ................................ ................................ ...........  28 
2.4 Tax policy  ................................ ................................ ................................ ...................  29 
2.5 Economic outlook  ................................ ................................ ................................ ........  30 
3 OVERVIEW OF TOP E CONOMIC SECTORS  ................................ ................................ .... 30 
3.1 Agriculture, fisheries  ................................ ................................ ................................ .... 30 
3.2 Mining  ................................ ................................ ................................ ........................  30 
3.3 Manufacturing  ................................ ................................ ................................ .............  30 
3.4 Services sector  ................................ ................................ ................................ ............  31 
4 EXPORT AND IMPORT TRADE  ................................ ................................ ......................  31 
5 TRADE AND TRADE -RELATED POLICY DEVELOPMENTS  ................................ ................  31 
5.1 Trade policies and strategies  ................................ ................................ .........................  31 
5.1.1  National Strategic Development Plan II (2018 -19 – 2022-23) ................................ ........  31 
5.1.2  National Trade Policy Framework (2021 -25) ................................ ................................ . 32 
5.1.3  National Trade Strategy  ................................ ................................ .............................  32 
5.2 Quality infrastructure development  ................................ ................................ ................  32 
5.3 Comprehensive Nationa l Agricultural Policy  ................................ ................................ ..... 33 
5.3.1  National Irrigation Master Plan  ................................ ................................ ...................  33 
5.3.2  Livestock policy  ................................ ................................ ................................ ........  33 
5.4 Trade facilitation  ................................ ................................ ................................ .........  33 WT/TPR/G/447  • Southern African Customs Union  
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  5.5 Industrial policy  ................................ ................................ ................................ ..........  33 
5.6 Investment policy  ................................ ................................ ................................ ........  34 
5.7 Competition legislation  ................................ ................................ ................................ . 34 
5.8 Intellectual property rights  ................................ ................................ ...........................  34 
5.8.1  National Intellectual Property Policy and Strategy (NIPPS)  ................................ .............  34 
5.9 Government procurement  ................................ ................................ .............................  34 
5.10 Lesotho energy policy ................................ ................................ ................................ . 34 
6 REGIONAL AND MULTILATERAL TRADE RELATIONS  ................................ ....................  34 
6.1 SACU, SADC, SACU -EFTA FTA, SACU –MERCOSUR PTA  ................................ .....................  34 
6.2 SADC -EU EPA, SACUM -UK EPA  ................................ ................................ ......................  35 
6.3 African Growth and Opportunity Act  ................................ ................................ ...............  35 
6.4 African Continental Free Trade Area  ................................ ................................ ...............  35 
6.5 Tripartite Free Trade Area ................................ ................................ .............................  36 
6.6 World Trade Organization  ................................ ................................ .............................  36 
7 TRADE -RELATED TECHNICAL ASSISTANCE  ................................ ................................ .. 36 
8 CONCLUSION  ................................ ................................ ................................ ..............  37 
NAMIBIA  ................................ ................................ ................................ ........................  38 
1 INTRODUCTION  ................................ ................................ ................................ ..........  38 
2 MACROECONOMIC ENVIRONMENT  ................................ ................................ ..............  38 
2.1 Monetary policy  ................................ ................................ ................................ ...........  38 
2.2 Inflation  ................................ ................................ ................................ .....................  39 
2.3 Fiscal policy  ................................ ................................ ................................ ................  39 
3 ECONOMIC GROWTH AND SECTORAL PERFORMANCE  ................................ ..................  39 
4 TRADE  BALANCE ................................ ................................ ................................ ..........  41 
5 INSTITUTIONAL REFORMS  ................................ ................................ ..........................  42 
5.1 Establishment of autonomous bodies  ................................ ................................ .............  42 
5.1.1  Namibia Revenue Agency (NamRA)  ................................ ................................ .............  42 
5.1.2  Namibia Investment Promotion and Development Board  (NIPDB)  ................................ ... 42 
5.1.3  Namibia Industrial Development Agency (NIDA)  ................................ ...........................  43 
5.1.4  Business and Intellectual Property Authority (BIPA)  ................................ ......................  43 
5.2 Tax reforms  ................................ ................................ ................................ ................  44 
5.2.1  Integrated Tax Administration System (ITAS)  ................................ ..............................  44 
5.2.2  Export levy  ................................ ................................ ................................ ..............  44 
5.2.3  Environmental levy  ................................ ................................ ................................ ... 44 
5.2.4  Phasing out of the base -eroding tax exemptions  ................................ ...........................  45 
6 NAMIBIA BOARD OF TRADE  ................................ ................................ ........................  45 WT/TPR/G/447  • Southern African Customs Union  
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  7 TRADE IN SERVICES  ................................ ................................ ................................ .... 45 
8 TRADE FACILITATION  ................................ ................................ ................................ . 45 
8.1 Advance ruling programme  ................................ ................................ ...........................  46 
8.2 One-Stop Border Post with Botsw ana ................................ ................................ .............  46 
8.3 Namibia national single window environment  ................................ ................................ .. 46 
9 TRADE POLICY FRAMEWORK  ................................ ................................ .......................  46 
10 NATIONAL DEVELOPMENT PLAN AND VISION  2030  ................................ ..................  47 
11 TRADE AGREEMENTS  ................................ ................................ ................................ . 47 
11.1 International and regional trade arrangements  ................................ ..............................  47 
11.2 African Continental Free Trade Area (AfCFTA)  ................................ ...............................  47 
11.3 Tripartite Agreement (SADC, EAC, COMESA)  ................................ ................................ . 47 
11.4 Namibia –Zimbabwe Preferential Trade Agreement  ................................ ........................  47 
11.5 Africa Growth Opportunity Act (AGOA)  ................................ ................................ .........  48 
11.6 World Trade Organization  ................................ ................................ ...........................  48 
11.7 SACUM -UK EPA  ................................ ................................ ................................ .........  48 
11.8 SACU -EFTA ................................ ................................ ................................ ...............  48 
11.9 SADC -EU-EPA ................................ ................................ ................................ ...........  48 
12 WTO TECHNICAL ASSISTANCE  ................................ ................................ ..................  48 
13 CONCLUSION  ................................ ................................ ................................ ............  49 
SOUTH  AFRICA  ................................ ................................ ................................ ...............  50 
1 INTRODUCTION  ................................ ................................ ................................ ..........  50 
2 GLOBAL AND SOUTH  AFRICA'S  ECONOMIC OUTLOOK  ................................ ..................  50 
3 SOUTH  AFRICA'S TRADE PERFORMANCE  ................................ ................................ ..... 51 
4 SOUTH  AFRICA'S TRADE WITH THE REST OF THE WORLD  ................................ ...........  52 
5 SOUTH  AFRICA'S TRADE WITH THE REST OF AFRICA  ................................ ..................  52 
6 NATIONAL DEVELOPMENT PLAN  ................................ ................................ .................  53 
7 POLICY DEVELOPMENT AND RESPONSE  ................................ ................................ ...... 53 
7.1 Economic reconstruction and recovery plan  ................................ ................................ .... 53 
7.2 Re-imagined industrial strategy and master plans approach  ................................ ..............  54 
7.3 Trade policy and strategic framework  ................................ ................................ .............  54 
7.4 Tariff policy approach  ................................ ................................ ................................ ... 55 
8 CONCLUSION  ................................ ................................ ................................ ..............  56 
ANNEX 1 – SOUTH  AFRICA TRADE POLICY STATEMENT  ................................ .................  57 WT/TPR/G/447  • Southern African Customs Union  
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  SOUTHERN AFRICAN CUSTOMS UNION  
1  INTRODUCTION  
1.1  Regional economic context  
1.1.  Since the last joint Trade Policy Review in November  2015, the Southern African Customs Union 
(SACU) region comprising of the Republic of Botswana, Kingdom of Eswati ni, Kingdom of Lesotho, 
Republic of Namibia, and the Republic of South  Africa , has continued to foster growth and 
development despite the numerous challenges it has faced . Over the past two decades, the global 
economy experienced two large negative shocks : the global financial crisis (GFC) in 2009, and the 
COVID -19 pandemic in 2020 -21. These two shocks have caused growth to be erratic, with global 
recessions in 2009 and 2020 . In addition, they have posed major challenges for economic 
management, as attentio n has been focused on crisis management and recovery, diverting attention 
and resources from long -term growth needs . The global economic environment has a critical impact 
on the efforts of the SACU member States to achieve accelerated industriali zation and  economic 
recovery.  
1.2.  The SACU region is largely an open economy that benefits from growth in global trade but also 
vulnerable to external shocks . The overall weighted growth in the region is therefore, estimated to 
have contracted by 6.5 % in 2020 down from 0.3% in 2019 amid recent growth revisions by the 
member States . Growth later recovered to an estimated 5.0 % in 2021 but declined to 2.3 % in 2022 
and is forecast at a lower 1.8 % in 2023 . Figure 1 below shows actual and projected growth rates for 
the member States.  
Figure 1.1: Economic growth rate in SACU  
(Annual  % changes)  
 
Source:  Member States Budgets (2023).  
1.2  The SACU Customs Union  
1.3.  The SACU  Headquarters is based in Windhoek, Namibia, where the SACU Secretariat is based.  
1.4.  The SACU Agreement, 2002, (as amended in 2013) sets out a broad framework for enhanced 
integration with clear mandate, objectives, institutions, financing procedures and join t 
decision -making by the SACU member States . The member States form a common customs territory 
in which customs duties on trade between the member States are eliminated . In addition, the 
member States apply a Common External Tariff (CET) to goods imported into the common customs 
territory . Furthermore, a Common Revenue Pool (CRP), into which all customs, excise and additional 
-10-5051015
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022e
2023f
2024f
SACU weighted Botswana Eswatini Lesotho Namibia South AfricaFigure 1: Economic growth rate in SACU 
(Annual % changes)
Source: Member States Budgets (2023).WT/TPR/G/447  • Southern African Customs Union  
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  duties collected in the Common Customs Area are paid, is in place . The CRP is managed by 
South  Africa  on behalf of the SACU member St ates. 
1.3  SACU Institutions  
1.5.  Summit of Heads of State or Government : The Summit was established in April  2010 whilst 
the amendments to the SACU Agreement to incorporate the Summit were signed in April  2013 and 
entered into force on 1 6 September  2016. The key role of the Summit is to provide political and 
strategic direction to SACU . The Summit considers reports presented to it on strategic matters by 
the Council.  
1.6.  Council of Ministers : The Council is responsible for decision -making on policy matters in 
SACU. The Council has been meeting quarterly or as agreed otherwise by the Ministers.  
1.7.  SACU Commission : The Commission is responsible for the implementation of the SACU 
Agreement ; coordinates the implementation of the decisions of the Council and supervises the work 
of the Secretariat.  
1.8.  Technical Liaison Committees (TLCs) : Five (5) TLCs have been established as per the 
Agreement with the Finance TLC being established through a decision of the Council in 2008 . The 
role of the TLCs is to support the Commission i n its work by undertaking technical analyses on 
assigned matters.  
1.9.  Secretariat : The Secretariat is responsible for the day -to-day administration of SACU ; 
implementation of the decisions of the Institutions of SACU ; coordinating trade negotiations ; 
coordinat ing Meetings and serving as the depositary of all records for SACU . The Secretariat has 
four Directorates namely : office of the Executive Secretary ; trade facilitation and revenue 
management ; policy development and research ; and corporate services.  
1.10.   SACU Ta riff Board : Article 11 of the Agreement provides for the establishment of the SACU 
Tariff Board, which would govern tariff administration in SACU . The Board has not been 
operationali zed and as such the tariff matters are currently being handled by the International Trade 
Administration Commission of South  Africa  (ITAC) as an interim arrangement, based on a decision 
of the Council taken in 2006.  
1.11.   National Bodies : Article 14 of the SACU Agreement, 2002 provides that the member States 
shall establish specia lized, independent and dedicated National Bodies or designated institutions . 
The National Bodies shall be responsible for carrying out preliminary investigations and 
recommending any tariff changes necessary to the Tariff Board . In addition to ITAC of Sout h Africa , 
Botswana has also established its National Body, the Botswana Trade Commission (BOTC), while 
Eswatini, Lesotho and Namibia are at different levels of developing their National Bodies.  
1.12.   Ad Hoc Tribunal : is established in terms of Article  13 of the Agreement to settle any dispute 
regarding the interpretation or application of the SACU Agreement, or any dispute arising 
thereunder . A Draft Annex  on the SACU Tribunal was developed to operationali ze the ad hoc 
Tribunal, but its finali zation rem ains pending the decision of the Council on the jurisdiction of the 
Tribunal . The draft Annex  provides details, inter alia, on (i) the contentious and advisory jurisdiction 
of the Tribunal ; (ii) the modalities on the establishment and composition of a pool from which to 
constitute the Tribunal ; (iii) implementation of the decisions of the Tribunal ; and (iv) procedures 
necessary for the functioning of a tribunal . The Council has recogni zed the need for a mechanism 
for dispute settlement on tariff setting matters in SACU . The Council will consider whether access to 
the Tribunal should be granted to economic operators at the mid -term review of the Strategic Plan.  
1.4  Common policies  
1.13.   The SACU Agreement, 2002, recogni zes the need to develop commo n policies amongst the 
member States in the areas of industrial development, agriculture, competition and unfair trade 
practices policies.  
1.14.   In pursuance of this objective, member States have agreed to focus on industriali zation, the 
development of regional industrial value chains and thus agreed on priority sectors . The work WT/TPR/G/447  • Southern African Customs Union  
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  undertaken will leverage from progress made under SADC as guided by the SADC Industriali zation 
Strategy.  
1.5  Common External Tariff  
1.15.   As a Customs Union, SACU maintains a Common External Tarif f (CET) on imports from outside 
of the Customs Area . Changes to the CET are made through a consultative process among the 
member States, with South  Africa  taking the lead role.  
1.6  Unified engagements with third parties  
1.16.   SACU member States have established a co mmon negotiating mechanism (CNM) for the 
purpose of undertaking negotiations with third parties . Although the CNM has not yet entered into 
force, SACU member States have pursued a unified approach to negotiations with third parties.  
1.17.   Since 2002, SACU member  States have concluded several trade negotiations as a bloc with 
some key trading partners . These include the (i)  Free Trade Agreement between SACU  and the 
European Free Trade Association (EFTA), whose members are (Norway, Iceland, Switzerland and 
Liechtenstein), entered force in 2008 ; (ii) Economic Partnership Agreement between SADC - EPA 
States and EU, entered force in October  2016; (iii) SACU -MERCO SUR Preferential Agreement, 
entered force in April 2016; (iv) Africa Continental Free Trade Agreement, entered force in 
May 2019; and (v)  SACU, Mozambique and UK Economic Partnership Agreement ; entered into force 
in January  2021.  
1.18.   All SACU countries are Mem bers to the Southern African Development Community (SADC) 
Protocol on Trade, which entered into force in 2000 . SACU has submitted a common/uniform offer 
under this Protocol . In addition, SACU member States in July 2008, signed a Trade, Investment and 
Devel opment Cooperation Agreement (TIDCA) with the U nited States . The Cooperation Agreement 
provides the framework for formal interaction between the two parties and four areas of cooperation 
had been identified which include : (i) sanitary and phytosanitary mea sures (SPS) ; (ii) technical 
barriers to trade (TBT) ; (iii) customs cooperation and trade facilitation ; and (iv)  trade and 
investment promotion activities where further cooperation can be achieved through bilateral 
agreements or Memorandums of Understanding . 
1.19.   These trade agreements, provide for market access opportunities for the member States . 
SACU member States are still engaged in ongoing trade negotiations with the following 
(i) SACU  -India Preferential Trade Agreement ; and (ii)  Review of the SACU -EFTA Fr ee Trade 
Agreement.  
1.20.   Trade in Services : the SACU Agreement, 2002 does not provide for Trade in Services . SACU 
member States advance their trade in services agenda within the context of the SADC Protocol on 
Services of which all SACU member States are signatories . SACU member States are negotiating 
Trade in services in the context of the EU -SADC EPA, Tripartite FTA and AfCFTA negotiations.  
1.7  The SACU Strategic Plan 2022 -2027  
1.21.   The SACU member States adopted a Strategic Plan in 2022, which is structured around five 
(5) core strategic pillars that are supported by a sixth pillar that relates to effective SACU 
Institutions . Further, the pillars themselves are underpinned by a set of cross-cutting issues, 
comprising governance and accountability and institutional arrangements , that will ensure that the 
necessary conditions are in place to facilitate the SACU region's implemen tation of the Strategic 
Plan. The core strategic pillars being (i) industrialization, export and investment promotion ; (ii) trade 
facilitation and logistics ; (iii) implementation and leveraging on AFCFTA opportunities ; (iv) trade 
relations/unified engageme nt with third parties ; and (v)  finance and resource mobilization . 
1.22.   Industriali zation Pillar: SACU identified industriali zation as an overarching objective to 
deepen regional economic integration through the development of regional value chains . The vision 
for industriali zation, was approved in September  2020, namely : "to build a diversified, competitive, 
sustainable and equitable industrial base that supports structural transformation and the economic 
integration of the SACU region" . Investment attraction and export promotion are identified as 
supporting pillars to atta in the industriali zation aspirations. to deepen the regional industrial base WT/TPR/G/447  • Southern African Customs Union  
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  and position the region to take advantage of the opportunities arising from the AfCFTA . 
Industriali zation focus area is consistent with SACU's broad principle to align the regiona l 
industriali zation initiatives with the SADC Industriali zation Strategy and Roadmap (2015 -63), as an 
overarching framework for economic, industrial and trade -related activities in the region.  
1.23.   SACU's priority sectors were identified and endorsed in 2020/21 . These include 
agro-processing ( fruits and vegetables, meat and meat products and leather and leather products), 
textiles and clothing and pharmaceuticals and cosmetics and essential oils. 
1.24.   Trade Facilitation and Logistics Pillar : the SACU Trade Facilitati on Programme has evolved 
over the years and has yielded tangible results which continues to enhance the free flow of goods 
within the Customs Union . As part of the refocused work programmes, the SACU Trade Facilitation 
and Logistics Programme was adopted i n April 2021 to support the industriali zation and trade agenda 
in SACU . It is a framework that outlines six (6) broad parameters for cooperation and collaboration 
on trade facilitation and logistics in SACU namely : customs cooperation ; border coordination, behind 
the border issues (standards, sanitary and phytosanitary standards ; non-tariff barriers ; technical 
barriers to trade) ; transport and logistics ; support to trade negotiations and implementation of trade 
agreements ; and cross -cutting pol icy issues . The Programme will also be supported by a Capacity 
Building and Gender Mainstreaming Plan to upskill and create technical capacity for officials and 
private sector in the respective areas of focus.  
1.25.   In parallel, SACU continues to implement a Cus toms Moderni zation Programme with priorities 
set on Authorized Economic Operator (AEO) Programme and IT Connectivity . This Programme is 
being streamlined and rationali zed to align to the refocused SACU Trade Facilitation and Logistics 
Programme . Some of th e tangible results emanating from implementation of the SACU Customs 
Moderni zation Programme include development of the following tools and frameworks : (i) SACU 
Customs policy; (ii) Annex to the SACU Agreement 2022, on Customs mutual administrative 
assista nce; (iii) manual single administrative document (Customs declaration form that replaced 
multiple forms used for declaration) ; (iv) regional frameworks on IT connectivity, Authori zed 
Economic Operator Compliance Programme (formerly named Preferred Trader P rogramme) and the 
Regional Authori zed Economic Operator Programme including compliance, safety and security ; 
(v) Bilateral and Regional Framework for Automated Exchange of Customs information ; (vi) regional 
customs strategies for risk management and compliance ; Regional Arrangement between SACU 
member States on Mutual Recognition of Customs Accreditation Programmes Aligned to the WCO 
Safe Framework and the SACU Regional AEO Programme ; (vii) roadmap for migration from 
Harmoni zed System (H S) 2017 to HS  2022; (viii) manual monitoring and evaluation framework , and 
subscription to an open -source digital platform for monitoring and evaluation ; (ix) manual system 
to manage tariff rate quotas under the SADC -EU-EPA; and (x)  guidelines for traders and c ustoms 
Officials to simplify implementation of the SACU -EFTA FTA.  
1.26.   In addition, the tools and frameworks developed under the Customs Moderni zation 
Programme were streamlined and implemented . The successes attained from practical 
implementation of the t ools and frameworks include the following : (i) Botswana, Eswatini, Lesotho, 
Namibia have connected their respective customs management systems with South  Africa  and are 
automatically exchanging customs information ; (ii) all member States have established and are 
implementing the National AEO Compliance Programmes, formerly known as Preferred Trader 
Programme ; (iii) the region has registered a total of one  hundred  and seventy -six (176) Authori zed 
Economic Operators under the AE O Compliance Programme ; (iv) all member States simultaneously 
migrated from HS 2017 to HS 2022 ; (v) training and capacity building for more than 1 ,500 Customs 
officials, partner government agencies, and private sector on various elements of the Customs 
Modernization Programme, including novice technologies ; (vi) Provision of technical customs and 
trade facilitation  support for World Trade Organi zation Trade Policy Reviews ; and (vii)  provision of 
technical support on Customs, Rules of Origin, and Trade Facil itation for the negotiations and 
implementation of the AfCFTA, SADC -EU EPA, SACU -EFTA FTA, SACU -MERCOSUR PTA, and Tripartite 
(EAC, COMESA and SADC) FTA.  
1.27.   Regional financing mechanisms : SACU has recogni zed the need to address financing and 
mobili zation of resources to support SACU's industriali zation agenda . In this regard, work is 
underway to consider issues related to financing for industriali zation especially the identification of 
financial resource requirements and to propose options for fundin g the regional value -chain projects 
and infrastructure development in SACU.  WT/TPR/G/447  • Southern African Customs Union  
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  1.28.   Implementation of the AfCFTA : The Agreement Establishing the AfCFTA presents SACU an 
opportunity to diversify its manufactured and services exports as well as integration into cont inental 
value chains . The AfCFTA is an opportune pathway for SACU's drive towards export market 
diversification and enhancement of its industrial capacity . To maximi ze benefits, it has been 
highlighted as imperative to develop national and SACU -level imple mentation strategies to leverage 
AfCFTA opportunities.  
1.29.   Trade Relations/ Unified Engagement with Third Parties : Strengthening trade relations 
with third parties plays an important role in creating opportunities to promote regional 
industriali zation and econ omic growth through market expansion and diversification, as well as 
industrial development . The aim is to ensure unified engagement of the SACU member States in all 
negotiations and implementation of Trade Agreements with third parties, in order to preser ve the 
integrity of the Customs Union in accordance with Article  31 of the SACU Agreement.  
 WT/TPR/G/447  • Southern African Customs Union  
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  BOTSWANA  
1  INTRODUCTION  
1.1.  This report aims at providing information on Botswana's national trade and trade -related 
policies implemented during the period 2015 to 2022 . The report highlights Botswana's 
macroeconomic policy developments as well as trade and trade -related policy developments . The 
report further discusses trade opportunities for the country to drive its economic growth . This report 
is prepared at a time when Botswana like many other countries has been adversely affected by the 
COVID -19 pandemic resulting in harsh spotlight on socio -economic issues such as high 
unemployment and incidences of poverty, among others.  
1.2.  The national economic growth and development objectives are established in Vision 2036 and 
the National Development Plan ( NDP 11) whose theme is "Inclusive Growth for the Reali zation of 
Sustainable Employment Creation and Poverty Eradication" . NDP11 mid -term review rev ealed a 
declining economic growth, a deteriorating fiscal position, the need to diversify exports and the 
economy, mitigating uncertainties around the diamond industry's future and high unemployment.  
1.3.  Botswana Vision 2036 aligns with AU and UN sustainable d evelopment goals, to ensure that 
the country pursues the national aspirations in a way that enables Botswana to meet global and 
regional goals.  
1.4.  Due to the effects of COVID -19 pandemic, Botswana has developed the Economic Recovery 
and Transformation Plan (E RTP) in order to support the restoration of economic activity and incomes, 
accelerate economic transformation and build the resilience of the economy . It is recognized that 
there is devastation to productive capacity and subsequent loss of income from comp anies and 
individuals especially in sectors such as mining, agriculture, trade, hotels and restaurants and the 
informal sectors . The ERTP therefore envisions actions on the stated sectors also including ICT, 
education, health, and the creative sector, in a  bid to take Botswana to high -income status by 2036 
(Vision 2036 objective).  
2  BOTSWANA'S MACROECONOMIC POLICY DEVELOPMENTS  
2.1  Gross domestic product  
2.1.  According to Bank of Botswana 2022 Annual Report, Botswana's economy (GDP) grew by 6.4 % 
in the year ending Sept ember  2022, sustained by a 9.2 % recovery of the mining sector, while there 
was broad -based positive growth across the non -mining sectors . As a result of the recovery of the 
diamond trade, the balance of payments reported a surplus of BWP  8.5 billion in 202 2, positively 
impacting foreign exchange reserves . Foreign exchange inflows, in particular, surpassed outflows 
resulting on a net flow of BWP  3.3 billion.  
2.2  Fiscal Policy  
2.2.  Macroeconomic developments in Botswana are guided by Vision 2036, a transformational 
agenda that defines the national aspirations and goals . It aims at transforming Botswana from an 
upper -middle income country to a high -income country by 2036 . The eleventh National Development 
Plan ( NDP 11) was the first medium -term Plan towards the implemen tation of the country's second 
vision – Vision 2036 . NDP  11 theme is "Inclusiv e Growth for the Reali zation of Sustainable 
Employment Creation and Poverty Eradication" . Which was implemented through six  national 
priorities, namely : developing diversified sources of economic growth ; human capital development ; 
social development ; sustainable use of national resources ; consolidation of good governance and 
strengthening of national security ; and implementation of an effective monitoring and evaluation 
system . The National Development Plan was aligned with global, contine ntal and regional initiatives 
such as ; the UN's Sustainable Development Goals, AU Agenda 2063, and the Revised SADC Regional 
Indicative Strategic Development Plan.  
2.3.  With NDP 11 implementation having ended in March  2023, the country is currently 
implementing  a two (2) year (2023/24 – 2024/25) Transitional National Development Plan whose WT/TPR/G/447  • Southern African Customs Union  
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  fundamental objective is to archive diversified private sector -led growth, building on the NDP  11 
fundamentals of archiving inclusive growth, creation of sustainable environme nt and poverty 
eradication . The Plan identified six (6) national priorities being : digital transformation ; business 
environment reform ; infrastructure development ; value-chain development ; sustaining livelihoods ; 
and climate change.  
2.4.  Fiscal strategy in 2023 /24 and beyond will continue to be strengthened to achieve the 
objectives of running surpluses and re -building buffers . For medium to long -term sustainability . 
There will be focus on strengthening fiscal prudence and discipline ; enhancing revenue mobili zation; 
improving the efficiency of public spending, restoring government's net financial assets and debt 
sustainability.  
2.3  Monetary Policy  
2.5.  Bank of Botswana (BoB), the Central Bank, in its implementation of the monetary policy, aims 
to achieve a low and sustain able level of inflation . In 2022, the Central Bank conducted the monetary 
policy in the context of projected elevated inflation associated with upward adjustment of 
administered prices, a modest recovery was reali zed in domestic demand resulting from the e asing 
of containment measures due to deployment of effective COVID -19 vaccines and relatively high 
foreign inflation These conditions provided scope for a contractionary monetary policy stance in 
support of the attainment of the Bank's price stability obje ctive of 3 –6%. 
2.6.  BoB is also responsible for implementing the exchange rate policy . In 2022, the Pula basket 
weights were maintained at 45 % and 55 % for the South  Africa n rand (ZAR) and the IMF's Special 
Drawing Rights (SDR), respectively, reflecting Botswana's trade pattern and financial relationships 
with the external world.  
2.7.  The Bank implemented an annual downward rate of crawl of 2.87 % with a view to enhancing 
domestic industry competitiveness . In 2022, the trade -weighted nominal effectiv e exchange rate 
(NEER) of the Pula depreciated in line with the rate of crawl of the Pula exchange rate . The real 
effective exchange rate (REER) appreciated by 2.1 % in the same period because of a higher positive 
inflation differential between Botswana and  the trading partners than the 2.87 % downward rate of 
crawl, and this suggested loss in international competitiveness of domestic firms.  
2.4  Economic outlook  
2.8.  Botswana economy showed strong resilience as the country emerged with one of the fastest 
recoveries fr om the impact of the COVID -19 pandemic . The economy grew by 11.8 % in 2021, the 
fastest growth rate in sub -Saharan Africa . It got off to a strong start in 2022, as economic growth 
averaged 6.5 % year-on-year, during the first three quarters of the year . This growth is mainly due 
to better -than-expected performance of both the mining and non -mining sectors – particularly 
diamond trading, manufacturing, water and electricity, ICT, wholesale and retail, as well as public 
administration.  
2.9.  Regarding inflation, dome stic prices remained skewed to the upside as prices of basic 
commodities and manufactured goods escalated during the 2022 . Annual inflation had risen to 
14.6% by August  2022, which was the highest rate since November  2008. There has been temporary 
reductio n in VAT from 14 % to 12 % rate and zero rating of some food commodities, as well as a 
reduction in global and domestic fuel prices.  
2.10.   National real GDP grew by 11.9 % in 2021 after contracting by 8.7 % in 2020 due to the effects 
of COVID -19 pandemic . The broad -based 5.8 % growth in 2022 was driven by a diamond market 
rebound, consumption -supportive government policies, and an effective vaccination drive (over 67 % 
of the population has been vaccinated) . Inflation average 12.2 %, in 2022, which was above the 
Bank of  Botswana's medium -term objective of 3 %–6%, reflecting the domestic pass -through of high 
global commodity prices arising from the Russia n Federation -Ukraine conflict . The Government 
temporarily reduced the value -added tax rate to 12 % from 14 % and zero -rated cooking oil and gas 
to ease living costs, this was from the 1 April 2022 till 3 1 March  2023. The Bank of Botswana raised 
the policy rate to 2.65 % in August  2022 from 1.65 % in May  2022.  WT/TPR/G/447  • Southern African Customs Union  
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  2.11.   There was fiscal deficit of 9.5 % of GDP in 2020/21, 202 2/23 experienced a 1.0 % deficit of 
GDP and the deficit was financed through borrowing and reserves drawdown . The current account 
surplus of 2.2 % of GDP in 2022 signalled rising diamond sales and receipts from the Southern  African 
Customs Union . Internation al reserves stood at USD 4.6 billion  in November  2022 (9.7 months of 
import cover), compared with USD 4.8 billion  at end -2021 (9.9  months) . The banking sector's 
capital adequacy ratio averaged 19.1 % from November  2021 to November  2022, above the 12.5 % 
prudential requirement . The non -performing loans ratio fell to 3.8 % in November  2022 from 4.3 % 
in December  2021. Botswana had a low poverty headcount ratio, 20.8 % in 2021, but high 
unemployment, 25.4 %, driven by youth unemployment of 39.9 % in 2022.  
2.12.   Botswana's economy is expected to reali ze enhanced growth on the margins of anticipated 
performance of the liberalized beef sector, higher diamond prices, and ramped -up copper and 
vaccine production, amongst others.  
3  TRADE AND TRADE -RELATED POLICY DEVELOPME NTS 
3.1  Trade policies and strategies  
3.1.  Botswana's National Trade Policy defines the "Complete Framework of Laws, Regulations, 
International Agreements and negotiation positions as well as Government's Guidelines and 
Pronouncements on Trade which define how the country will conduct bilateral, regional and 
multilateral trade with partners" . The National Trade Policy elaborates the country's vision towards 
providing local producers and consumers with access to the widest choice of international inputs, 
goods and se rvices . The Policy , aligned to supporting policies, contributes to the provision of a 
conducive environment for industrial development, economic diversification, export -led growth and 
economic integration.  
3.2.  Botswana's Industrial Development Policy (IDP) was  approved by the National Assembly in 
July 2014, with the aim of facilitating diversified, sustainable and globally competitive industries . 
The policy is implemented through six (6) strategic policy thrusts namely : industry creation and 
development ; indust ry promotion and facilitation ; industrialization and citizen and economic 
empowerment ; development of infrastructure and industry relevant skills ; private sector capacity 
development ; and other fundamentals (industry financing, research and development, In tellectual 
property, environment , health and safety standards).  
3.3.  The industrial policy has recorded some notable successes in the areas of industry facilitation, 
citizen economic empowerment, small and medium enterprises (SMEs) development and promotion, 
private sector capacity development, and industry financing . These include elimination of certain 
requirement for licensing especially requi rement for businesses which do not have health hazard . 
Despite these successes, challenges still remain due to ineffective coordination ; lack of a proper 
monitoring and evaluation framework ; inadequate analytical capacities within Government and the 
private sector ; inadequate financing and resource mobilization ; and low investment in research and 
development.  
3.4.  The Policy, now due for review, will address the following:  
a) Develop export -oriented industries with a view to overcoming the limitations of 
Botswana's small domestic market and the concomitant small industrial base;  
b) develop a roadmap to close the gap between Botswana and the emerging market 
economies, the newly industriali zed countries and the industriali zed countries – industry 
by industry, secto r by sector and firm by firm;  
c) promote resource -based industriali zation in order to optimally exploit and use the 
country's abundant natural resources;  
d) Promote service -led industriali zation with a view to overcoming Botswana's challenges 
associated with bei ng landlocked;  
e) Unlock business opportunities for the private sector;  
f) Promote the development of regional strategic industries and find a niche in regional 
value chains;  
g) Promote the development of strategic rural industries according to each region's 
compar ative and competitive advantages;  WT/TPR/G/447  • Southern African Customs Union  
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  h) Promote citizen participation in all the opportunities opened by industrial development ; 
and 
i) Promote effective stakeholder coordination and collaboration.  
3.5.  Botswana's Revised Economic Diversification Strategy (2023 –2028) was developed to improve 
Botswana's competitiveness in the global economic space . The Strategy will facilitate lower 
production costs ; remove economic distortions ; as well as enable trade, investment and innovation 
in the identified sectors . The Strategy anticipates a doubling of the volume of investment as 
measured by Gross Fixed Capital Foundation (GFCF) and domestic investment by 2030, as well as 
increased portfolio inflows by 50 % by the same period . Its strategic objectives are:  
a) Growing the contribution of the private sector and private investment to the Botswana 
economy;  
b) Supporting the development of strategic sectors, with a focus on economic 
diversification and external competitiveness;  
c) Upgrading the investment ecosystem through, amongst o thers, new sustainable and 
innovative financing for investment, and improving livelihoods across the country ; and 
d) Expanding and upgrading the country's hard infrastructure and expanding access to 
high-speed internet connectivity.  
3.6.  Regulatory Impact Assessme nt (RIA) system for Botswana was approved through a Presidential 
Directive in November  2019 for a pilot phase of three years focusing on issues that affect the doing 
business environment . Its implementation is carried out with technical assistance from the  UNDP . 
During the pilot phase, government was to produce three (3) RIA projects every six (6) months . 
However, due to the outbreak of COVID -19, implementation was greatly undermined, and the UNDP 
continued providing technical support beyond the three -year pilot phase . The Ministry of Trade and 
Industry also developed the Better Regulation Strategy with the aim of removing regulatory hurdles 
to businesses and reducing the cost of doing business in the country.  
3.7.  Since the implementation of the RIA, only three (3) projects were undertaken, two were 
completed while the other one is yet to be completed . The Ministry of Trade and Industry has 
however taken a decision to undertake RIA on all the review four (4) acts, one (1) policy and two  (2) 
statutory instruments.  
3.8.  Botswana's trade policy is also complemented by the National Export Strategy (NES) . The 
Strategy is implemented by, among other stakeholders, the Botswana Investment and Trade Centre 
(BITC) through trade development and investment promotion in the identif ied priority sectors.  
3.9.  The Special Economic Zones Act was adopted in 2015 for the establishment, development and 
management of special economic zones with a view to creating a conducive environment for local 
and foreign investment . To date six economic zone s have been identified in the areas of : 
international diamond hub ; financial services ; beef and leather ; biogas park ; integrated coal value 
addition ; and mineral beneficiation.  
3.10.   Several investment and trade facilitation measures are undertaken to improve the cost of 
doing business in the country . The Transport Master Plan has been developed to aid the Government 
in moderni zing its entire transport network system . The Plan aims to enhance the transport system 
efficiency in order to reduce the cost o f doing business . The masterplan advocates for financing 
through a Private Public Partnership mechanism.  
3.11.   Botswana has also set up the SmartBots Programme whose objective is to drive digital 
innovation across the economy, government and society . One of its deliverables is to increase digital 
connectivity nationally . Software applications were developed for farmers, SMMEs, primary school 
education services in order to increase their efficiency.  
3.12.   Botswana is at preliminary stages in the development of an au tomated Transit Management 
System . The system will simplify, harmoni ze and streamline border crossing procedures . The system 
is expected to support the establishment of a National Single Window, which is still at infancy stage . 
The WCO will be instrumental  in assessing relevant institutions' readiness to implement the Single 
Window.  WT/TPR/G/447  • Southern African Customs Union  
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  3.13.   The BURS Customs Management System and the BOBS Permit Processing System have been 
integrated to improve efficiency for their customers . Furthermore, the Ministry of Finance has  
established One -Stop Boarder Posts (OSBPs) for effective boarder management . This has resulted 
in reduced clearance times at borders . The Kazungula  Bridge OSBP (with Zambia) is operational, 
while the Mamuno and Tlokweng OSBPs  are under development . There are also considerations to 
establish more OSBP crossings at various ports of entry and exit in strategic places in Botswana . 
The OSBP facility is critical is supporting a sustainable transit system.  
3.2  Multilateral, regional and bilateral trade arrangements  
3.14.   Botswana continues to promote trade by pursuing free trade agreements/arrangements with 
strategic trading partners in a bid to attract investments . To date, the country is party to the 
following trade agreements : SACU; SADC Pro tocols on Trade and in Services ; the SACU -MERCOSUR 
Preferential Trade Agreement ; the SACU -EFTA Free Trade Area ; SACU and Mozambique -UK 
Economic Partnership Agreement (UK -SACUM EPA) ; the EU -SADC Economic Partnership Agreement ; 
and the WTO . Botswana is also a beneficiary under AGOA . Of recent Botswana deposited its 
instrument of ratification to the African Continental Free Trade Area.  
3.15.   The UK -SACUM EPA entered into force in January  2021. The Agreement, concluded after the 
UK left the EU, mirrors the effect of the EU -SADC EPA . Its negotiations were intended to secure the 
regional market access enjoyed when UK was still part of the EU . Currently the process for WTO 
Factual Presentation on the Agreement is ongoing.  
3.16.   Botswana also signed the AfCFTA Agreement on  10 February  2019 and ratified the Agreement 
on 19 February  2023, completing by SACU members . To support implementation of the Agreement, 
Botswana in collaboration with UNECA is developing a National AfCFTA Implementation Strategy . 
The Strategy would assist in identifying opportunities that Botswana can leverage from agreement.  
3.17.   The SADC Protocol on Services entered into force in January  2022 after conclusion of 
negotiations of phase I services, namely : communications, tourism, construction, finance, transport  
and energy . The region is currently at the initial stages of negotiators for the second phase services, 
covering : business ; distribution ; environmental ; educational ; health; and recreational, cultural and 
sporting services . At AfCFTA level services negoti ations are ongoing for business, communication, 
finance, tourism  and transport.  
3.18.   The National E-commerce Strategy was developed through technical assistance from the 
United Nations Conference on Trade and Development (UNCTAD) and funded through the 
EU/SADC -Trade -Related Facility . The Strategy was launched on 2 1 October  2021. Capacity building 
on the strategy for the different stakeholders is ongoing.  
3.3  Intellectual Property and Copyrights  
3.19.   The Copyright and Neighbouring Rights Act (Act No.  6 of 2006) is  under review . The objective 
of the review is to bring the Act in alignment with the Marrakesh VIP Treaty as well as covering other 
Intellectual Property and Copyrights issues that are not provided for in the current version, including 
but not limited to a rtist resale right and expressions of folklore.  
3.20.   In February  2022, the Parliament of Botswana approved the Botswana Intellectual Property 
Policy (BIPP) 2022 . The main objective of the Policy is to enable Botswana to use its intellectual 
property (IP) potent ial towards the realization of a knowledge -based economy and to diversify the 
economy to create prosperity for all . The Policy envisions that, "Botswana will be an IP driven 
economy by 2036" . The Companies and Intellectual Property Authority (CIPA) launche d the Policy 
in November  2022. 
3.4  Government procurement  
3.21.   The Botswana Public Procurement Act was adopted by Parliament in July 2021. The Act led to 
the repeal of the former Public Procurement and Asset Disposal (PPAD) Act, as well as the Local 
Authorities Pro curement and Asset Disposal (LAPAD) Act . It also introduces a "Single Law" governing 
all public procurement in Botswana, i.e. procurement activities undertaken by entities within central 
government, local authorities, state -owned entities, land boards, NGO S, trusts , and any other WT/TPR/G/447  • Southern African Customs Union  
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  entities where government is a significant contributor . The Act further establishes the Public 
Procurement Regulatory Authority (PPRA) whose operations began in 2022 . The Act also seeks to:  
a) Continue the PPAD Board as the PPRA Board  and revises its functions to improve 
efficiency and effectiveness in the regulation and management of the public 
procurement process;  
b) Remove the asset disposal function by procuring entities from the Act and provides for 
it under the Public Finance Management Act;  
c) Make procuring entities fully accountable for all procurement activities;  
d) Maximize economy and efficiency in procurement;  
e) Promote participation of citizens in public procurement;  
f) Promote competition among suppliers and contractors;  
g) Provide for fair, equal, equitable treatment of all suppliers and contractors;  
h) Promote the integrity of, and fairness and public confidence in the procurement process ; 
and 
i) Achieve transparency  in procedures relating to procurement.  
4  SECTORAL POLICY DEVELOPMENTS  
4.1  Manufacturing sector  
4.1.  The manufacturing sector has been identified as an engine for employment creation and 
diversification of the economy . As a result, there has been a number of initiatives both at the national 
and regional levels aimed at developing the sector . Regardless of these initiatives, the manufacturing 
sector has underperformed . According to Statistics Botswana and the World Bank reports, the 
sector's contribution to GDP was 8.5 % in 2010 but dropped down to 5.7 % in 2020 . Regarding 
employment,  manufacturing accounted for 7.7 % of formal employment in 2020 according to the 
new Quarterly Multi -topic Household Survey.  
4.2  Agriculture sector  
4.2.  While agriculture is important for subsistence farming, its contribution to GDP remains 
negligible . For Botswana, the agriculture sector is dominated by arable farming and livestock 
production . Of the two, livestock production, especially cattle, contributes a higher  percentage  to 
the agricultural GDP . Since the beginning of the COVID -19 pandemic, the Government has made a 
conscious effort to build resilience in food supply chains and reliable domestic production that will 
help improve food security and self -sufficiency . In a bid to develop the agricultural sector and 
diversify the economy, farmers have acc ess to funding from the National Development Bank (NDB) 
and the Agricultural Credit Guarantee Scheme . In addition, the Integrated Support Programme for 
Arable Agriculture Development (ISPAAD), was reviewed to address challenges facing farmers and 
the low p roductivity in the arable sub -sector.  
4.3  Mining sector  
4.3.  Botswana did not have a mineral policy before and have in 2022 adopted a Minerals Policy, 
whose objective is to maximi ze national benefit from minerals development while providing a 
competitive environmen t for investors . The Government will ensure adherence to the environmental 
and other related policies for sustainability in accordance with the best international practices . The 
policy provides a framework for minerals development in light of the following  challenges:  
a) Dependency Botswana's economic on minerals, more especially diamonds;  
b) Increasing competition for investors with other countries as more and more mining 
jurisdictions improve their policies and mineral potential;  
c) The need for maximi zation and equitable distribution of benefits such as revenue, 
employment generation and local supply of goods and services;  
d) The need to develop local upstream and downstream linkages to add value to minerals 
development in Botswana ; and 
e) The high -end consumer sen sitivity to the issues of climate change, the environment and 
ethics.  WT/TPR/G/447  • Southern African Customs Union  
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  4.4.  The Policy  aims to achieve the following:  
a) Maximi zation of economic benefits to the nation while enabling private investors to earn 
competitive returns;  
b) A competitive environment to stimu late private sector investment in mineral 
developments;  
c) Improved linkages with the wider economy in generation of local employment 
opportunities;  
d) Sustainable mineral development that supports environmental conservation and 
protection;  
e) Increase opportunitie s for citizens to directly participate in mining, whether as 
contributors of capital, labour, goods or services, to the greatest extend possible 
consistent with the maintenance of commercial conditions attracted to minerals 
investment;  
f) Diversification with in the mineral sector;  
g) Strategic and responsible management of geological and minerals related information;  
h) Creation of a conducive environment for women participation in the mineral sector;  
i) Value addition and beneficiation ; and 
j) Strengthening of local capacity for participation on mineral development.  
4.5.  The Mines and the Mineral Act is currently under review to incorporate policy objectives.  
4.4  Energy  
4.6.  Botswana adopted National Energy Policy (NEP) in April  2021 whose objectives are to create 
an energy system that would secure a reliable supply of modern energy services for all the sectors 
of the economy and to significantly reduce energy -related atmospheric emissions by the year  2040. 
The Policy seeks to provide energy security for the country and to improve a ccess to reliable and 
adequate supply of energy in order to facilitate a sustainable and low carbon economic development.  
4.7.  This Policy is anchored on three main principles : economic development, equity and 
environmental responsibility . In order to drive economic development, NEP ensures that adequate 
modern energy services and products are accessible for commercial activities . Energy will be used 
to generate income for the economy as a key driver of economic diversification by powering the 
country's economic  development activities . This Policy  also ensures equitable distribution to all.  
4.8.  The Botswana Energy Regulatory Authority (BERA) Act, which was approved in 2016, 
establishes the Botswana Regulatory Authority . The mandate of BERA is to regulate the energy 
sector. Following commencement its operations, the Authority developed regulations for the 
products under their rule . Prior to the BERA Act most of these products were partially regulated by 
the Department of Energy with the main focus on price regulation . According to the BERA Act 
licensing is required for any entity that undertakes commercial activities relating to the petroleum 
and gas sector . Government also amended the Electricity Supply Act in 2016 to align it to the BERA 
Act. 
5  TRADE–RELATED TECHNICAL A SSISTANCE  
5.1.  Trade -Related Technical Assistance (TRTA) is still very important for Botswana to build capacity 
on international trade issues to leverage optimise her participation in the global trading system . 
Some of the areas where technical assistance is st ill sought include:  
a) Mainstreaming gender and youth in trade;  
b) Trade and sustainable development;  
c) Trade in services;  
d) Fisheries;  
e) Trade policy formulation;  
f) Technical regulation and standards (Technical Barriers to Trade, Sanitar y and 
Phytosanitary;  
g) Monitoring and evaluation of the implementation of trade agreements;  
h) Analysis/ interpretation of trade agreements;  WT/TPR/G/447  • Southern African Customs Union  
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  i) Trade Negotiations skills ; and 
j) Government procurement . 
6  CONCLUSION  
6.1.  Botswana still performs at a lower level in terms of contribution to the multilateral trading 
system . Economic performance is also low, and this has even been exacerbated by COVID -19 and 
geo-political issues . Her production and trade are still associated with primary goods ; hence 
diversification agenda is st ill relevant.  
6.2.  Government remains committed to the multilateral trading system and will ensure that the 
trading rules or disciples are observed . However, to actively and effectively participate in global 
trade, Botswana is of the view that continuous techni cal assistance from the WTO is necessary . As 
a landlocked developing country, knowledge in developing the trade in services is vital to support 
the economic development.  
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  ESWATINI  
1  ECONOMIC AND TRADE ENVIRONMENT  
1.1  Eswatini's economic environm ent 
1.1.  Eswatini is a landlocked country bordering Mozambique to the northeast and South  Africa  to 
the north, west, south and southeast . The country's main trading partner is South  Africa  with over 
60% of exports going to South  Africa  and over 80 % of imports coming from South  Africa . Eswatini 
is a member of the Common Monetary Area (CMA) together with Lesotho, Namibia and South  Africa  
where the Lilangeni (domestic currency) is at par with the South  Africa n Rand, which is also a legal 
tender in the country.  
1.2.  In 2022, Eswatini's Gross Domestic Product (GDP) declined to an estimated 4.0 % from 7.9 % 
in 2021, partly reflecting the impact of pressures on domestic demand and the weak performance 
in agriculture . The poor performance of agriculture and agro -processing sub -sectors , mainly the 
sugar industry, depicts the impact of higher input costs, below average rainfall and arsons attacks . 
A positive growth was recorded in electricity, tourism, professional, administrative and support 
services.  
1.3.  The Kingdom of Eswatini faces a number of challenges that need to be addressed to ensure 
economic growth and stability . During the current Trade Policy Review, covering the period 2016 -22, 
fiscal deficit increased to 5.5 % of GDP in the financial year 2022/23 from 4.6 % of GDP in the financial 
year 20 21/22 and this has largely been driven by an increase in the wage bill and the decline in 
Southern African Customs Union (SACU) revenue . The goal of the Government of Eswatini is to bring 
the fiscal deficit and debt to GDP rati o to sustainable levels.  
1.2  Trends in foreign trade  
1.4.  During the review period, the trade balance turned positive with merchandi se trade exports 
depicting a growth rate of 17.6 %. The services balance continued to register a deficit, mainly against 
the backdrop of the national shut down brought about by the COVID -19 restrictions which subdued 
inbound tourism demand resulting to a deterioration in travel.  
1.5.  The total value of merchandi se exports from Eswatini increased to US D 2,060  million  in 2021 
from US D 1,812  million in 2015.  
Table 1.1: Total merchandise trade  
(USD million)   
2005  
 2010  
 2015  
 2021  
 
Merchandise exports  
 (e) 1 770  
 (e) 1 800  
 1 812  
 2 060  
 
Merchandise imports  
 (e) 1 900  
 (e) 1 960  
 1 412 
 1 936  
 
Merchandise trade balance  
 (e) -130 
 (e) -160 
 401 
 124 
 
Source:  UNCTAD . 
Table 1.2: Total Trade in services  
(USD million)  
 2005  
 2010  
 2015  
 2021  
 
Services exports  
 203 
 258 
 75 
 (e) 64  
 
Services imports  
 403 
 671 
 199 
 (e) 228  
 
Services trade balance  
 -200 
 -413 
 -124  
 (e) -165 
 
Source:  UNCTAD . WT/TPR/G/447  • Southern African Customs Union  
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  2  ESWATINI'S INTERNATIONAL TRADE RELATIONS  
2.1  The Multilateral Trading System  
2.1.  Eswatini remains committed to maintaining and strengthening the multilateral trading system, 
which is the corner stone of global trade . Since the last Trade Policy Review in 2015, Eswatini 
continues to fully engage in bringing about progress in the world t rading system under the World 
Trade Organization (WTO).  
2.2.  On 6 December  2005, WTO Members approved changes to the WTO's Intellectual Property 
(TRIPS) Agreement in order to make permanent a decision on patents and public health originally 
adopted in 2003 . This was formally built into the TRIPS  Agreement  after acceptance of the Protocol 
amending the TRIPS  Agreement  by two thirds of the WTO's Members . The amendment took effect 
on 23 January  2017 and replaced the 2003 waiver for Members who have accepted the amen dment . 
Eswatini accepted the Protocol amending the TRIPS  Agreement  on 25 May 2022. 
2.3.  Eswatini has also, on 2 1 November  2016, accepted the Protocol of Amendment to insert the 
WTO Trade Facilitation Agreement into Annex 1A of the WTO  Agreement  (the Protocol).  
2.2  The African Continental Free Trade Agreement (AfCFTA)  
2.4.  The AfCFTA entered into force on 30th May 2019, and became operational on 1 January  2021, 
with the main goal of creating a liberali zed continental market for goods and services, facilit ated by 
free movement of persons with a view to better integrate African economies.  
2.5.  Eswatini ratified and deposited her instrument of ratification in April 2018 and continues to 
participate in the ongoing trade negotiations on trade in goods, trade in serv ices, investment, 
competition, intellectual property rights, digital trade and women and youth in trade . 
2.3  Preferential Trade Agreements  
2.6.  Eswatini is a beneficiary of the GSP scheme and the countries that grant GSP include the 
United  States , Australia and the Russia n Federation . A wide range of export products from Eswatini 
enjoys market access through the GSP scheme.  
2.4  SADC -EU-EPA 
2.7.  In June 2016, Eswatini together with other SADC countries, Botswana, Lesotho, Mozambique, 
Namibia and South  Africa  signed an Economi c Partnership Agreement (EPA) with the European  Union  
(EU) which allows all Eswatini's products to enter the EU market duty -free and quota free, except 
for arms and ammunitions.  
2.8.  However, Eswatini's capacity to utili ze benefits offered under the EPA is limi ted by several 
factors including insufficient production capacities ; narrow export base and lack of competitiveness ; 
limited information about the EU market ; inadequate and inappropriate quality and standards' 
infrastructure and technology among others . Utilization of the Economic Partnership Agreement has 
also been hampered by high cost of back -bone services such as energy, communication and 
transport, less than optimal business environment, low competitiveness ranking which is repulsive 
to new domestic an d/or foreign investment, transit related delays and fees across borders, inability 
to meet quality standards by SMMES, and to provide required quantities.  
2.5  SACU – EFTA FTA  
2.9.  As a member of SACU, Eswatini is also a signatory to the SACU – EFTA Agreement . The Free 
Trade Agreement between SACU and the European Free Trade Association (EFTA) States of Iceland, 
Liechtenstein, Norway and Switzerland was signed on 2 6 June 2006. Negotiations commenced in 
May 2003 and the Agreement entered into force on 1 May 2008, to b e phased in over a period of 
10 years, which elapsed in 2018 . The Agreement covers trade in goods and lays the foundation for 
a further engagement of the Parties with regard to intellectual property, investment, trade in 
services, and public procurement . A Joint Committee was established for the supervision and WT/TPR/G/447  • Southern African Customs Union  
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  administration of the Agreement in July 2011, and provisions are included for consultations and 
dispute settlement procedures.  
2.6  SACU – Mercosur Preferential Trade Agreement  
2.10.   The Southern Common Market (Mercosur) consists of Brazil, Argentina, Uruguay and 
Paraguay . The negotiations to conclude the Preferential Trade Agreement commenced in 
December  2002. The SACU -MERCOSUR Agreement was subsequently signed in December  2008 and 
was the first a greement that SACU concluded in accordance with the provisions of the 2002 SACU 
Agreement . This Agreement was also the first agreement that SACU concluded with another 
developing regional trading partner . The Agreement laid out a framework for formal trade  relations 
and included a built -in agenda to finali ze the negotiating process on some outstanding issues 
including customs cooperation, the automotive industry, sanitary and phytosanitary issues, and rules 
of origin.  
2.11.   The Preferential Trade Agreement betwee n the Southern Common Market (Mercosur) and the 
Southern African Customs Union (SACU) was signed on 1 5 December  2008, in Salvador, Brazil ; and 
on 3 April 2009 in Maseru, Lesotho . After being ratified by all signatory parties, the Mercosur -SACU 
PTA entered into force on 1 April 2016.  
2.7  COMESA free trade area 
2.12.   The Common Market for Eastern and Southern Africa (COMESA) was established in 1994 and 
it aims to promote regional integration and boost economic development through various strategies 
and initiatives . With 21 member States, including Eswatini as a founding member, COMESA plays a 
critical role in shaping trade, investment and economic policies within the region.  
2.13.   Eswatini continues to trade under derogation, and this has been linked to the conclusion of 
negotiations under the Tripartite Free Trade Area (TFTA) . Eswatini has ratified and deposited the 
instrument of ratification for the TFTA . By becoming a Member, Eswatini gained access to a wide 
range of benefits that have positively impacted the economy . Some of the key benefits are:  
a) Enhanced market opportunities : Eswatini benefits from a larger market access with 
reduced trade barriers . This has allowed Eswatini -based businesses to expand their 
reach across member States, tapping into a consumer base of over 500  million  people.  
b) Trade facilitation : COMESA promotes streamlined processes and procedures for 
cross-border trade, making it easier and more efficient for Eswatini to import and export 
goods and services . This has positively impacted Eswatini's trad ing activities, fostering 
economic growth and stability.  
c) Investment promotion : COMESA encourages Foreign Direct Investment (FDI) by 
providing a conducive business environment . Eswatini has witnessed an increase FDI  
inflows, as investors recognize the country's potential and benefits of operating within 
a larger regional market.  
d) Economic diversification : Membership to COMESA has encouraged Eswatini to diversify 
her economy, reducing reliance on a few industries and s timulating growth in sectors 
with untapped potential . This has resulted in job creation and increased revenue 
streams for the nation.  
e) Capacity building and technical assistance : COMESA provides various training programs, 
capacity building initiatives and t echnical assistance . Eswatini has leveraged these 
resources to enhance its institutional and regulatory frameworks, contributing to 
improved governance and economic development.  
2.8  SADC FTA  
2.14.   Eswatini is a member of SADC and have ratified the SADC Protocol on T rade. There are 
multiple benefits for Eswatini as a member of SADC and some of the key advantages are:  
a) Economic integration : SADC promotes regional economic integration, which can lead to 
increased trade and investment opportunities for Eswatini . It provid es for a platform for 
Eswatini to negotiate and establish trade agreements with other member States, leading 
to improved market access and economic growth;  WT/TPR/G/447  • Southern African Customs Union  
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  b) Infrastructure development : SADC emphasizes infrastructure development, including 
transportation, en ergy and telecommunications . This facilitate Eswatini's connectivity 
with neighbouring countries and support the development of cross -border infrastructure 
projects, enhancing trade and regional connectivity;  
c) Resource sharing : SADC Members benefit from sharing resources, experiences and 
knowledge . Eswatini continues to tap into expertise of other countries within the region 
to develop her own industries, improve productivity and enhance competitiveness ; and 
d) Health and social welfare : SADC collaborates on  various health and social welfare 
initiatives and Eswatini benefits from such collaboration in areas such as healthcare, 
education and social development.  
2.9  COMESA -EAC-SADC Tripartite -FTA negotiations  
2.15.   The COMESA -EAC-SADC Free Trade Area was launched in June 2015. A number of countries, 
including Eswatini, signed the Agreement . As a member of SADC, Eswatini is expected to access a 
Tripartite Free Trade Area market of around 600  million  consumers with a combined Gross Domestic 
Product of US D 1.3 trillion . This initiative would serve as an opportunity for our business persons 
and exporters of goods to access a free African market with opportunities for growth and 
employment creation . Lot of efforts would have to be put in place in order to benefit from these 
economic integrations . The need to expand our industrial base now more than ever, should become 
an important policy output hinging on the Public Private Partnership relationship taking into account 
our own adopted industrial policy. 
2.16.   As a member of SADC, Eswat ini has signed and deposited the instrument of ratification for 
the COMESA -EAC- SADC Tripartite Free Trade Agreement on 17th November  2022; an agreement 
which is expected to provide diversified market access for Eswatini exports as well as alternative 
comp etitive sourcing for industrial inputs . The Tripartite Free Trade Area represent an integrated 
market of 26 countries with a combined population of over 600  million  consumers and a combined 
Gross Domestic Product of US D 1.3 trillion . 
2.10  Africa Growth Opportunity Act (AGOA)  
2.17.   Eswatini also benefits from the African Growth and Opportunity Act (AGOA), which was 
enacted on 18th May, 2000, as Public Law 106 of the 200th United  States  (US) Congress . AGOA 
originally covered an eight -year period ( October  2000 to  September  2008), but legislative 
amendments signed into law by U S President George W.  Bush in July 2004 extended it to 2015 . 
Upon completion of its initial 15 -year period of validity, the AGOA legislation was extended on 
29 June 2015 by a further 10 years , to 2025, through the AGOA Extension and Enhancement Act 
(AEEA).  
2.18.   The major purpose of the Act is to enhance market access to the United  States  for qualifying 
sub-Saharan African (SSA) countries by offering incentives for African countries to continue thei r 
efforts to open their economies and build free markets . AGOA is non -reciprocal and offers eligible 
SSA countries duty -free access to the U S market . It extends the number of tradable products beyond 
the Generalized System of Preferences, which specifies 4 ,600 items, to more than 6,400 items . The 
current ten -year extension of AGOA from 2015 to September  2025 recommends that each AGOA 
beneficiary country develops an AGOA utilization strategy to maximize export trade and investment 
from U S companies.  
2.19.   Eswatini  has been an AGOA beneficiary since 2001, however, the country was suspended from 
the program in 2015 and reinstated in 2017 . In January  2018, Eswatini's AGOA benefits were fully 
restored ; hence, the Ministry of Commerce, Industry and Trade (MCIT), in the spirit of private - and 
public -sector partnership, undertook the development of a national AGOA Utilization Strategy and 
Action Plan which was eventually launched in February  2021. 
3  NEW TRADE REFORMS  
3.1  Industrial Development Policy  
3.1.  Eswatini finalized its Indus trial Development Policy (IDP) for the period 2015 -22 which sets out 
what the country intends to achieve (the vision, mission, objectives, policy interventions and WT/TPR/G/447  • Southern African Customs Union  
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  strategies) in the area of industrial and trade development . Of note is that Eswatini has ha d no 
industrial policy before ; and, over the past decade, economic growth, investment, and exports have 
slowed down, while the business environment has at best stagnated, unemployment has risen, 
production and exports have not diversified.  
3.2.  The objectives of the IDP are as follows:  
a) To enhance manufacturing and services sectors contribution to GDP to be above 50 % 
and increase manufacture exports by 5 %; 
b) To promote diversification of the country's industrial activities and increase employment 
in the manufacturing sector by 5 % per year;  
c) To increase utili zation and beneficiation of local and regional raw materials in the 
production of goods for domestic and export markets by 50 %; and 
d) To promote broad -based industrialization path by inc reasing the participation of SMMEs 
in the manufacturing sector by 10 %. 
3.3.  It focuses on a wide range of strategic areas that have been derived from stakeholder 
consultations, sector consultations, benchmark studies and policy framework.  
Value addition and ben eficiation of primary products (resource -based industriali zation)  
3.4.  The government of the Kingdom of Eswatini will promote value addition and beneficiation of 
local primary products into high value processed products and the development of national, regional  
and global value chains in key sectors.  
Human capacity and skills development  
3.5.  The government of the Kingdom of Eswatini will increase and strengthen human capacity and 
skills development for industriali zation.  
Standards, technical regulations and quality infrastructure. regulatory and quality 
infrastructure ( standards, metrology, quality assurance, accreditation and technical 
regulations)  
3.6.  The government of the Kingdom of Eswatini will ensure industrial support in the regulatory and 
quality infrastructure a reas, i.e.  standardization, metrology, quality assurance, accreditation and 
technical regulations for a competitive industrial development . 
Promoting industrial upgrading through innovation, technology transfer and research & 
development.  
3.7.  The government of  the Kingdom of Eswatini will promote research and development and 
innovation to increase the manufacturing base.  
Liberalization of trade in services to accelerate industrialization  
3.8.  The government of the Kingdom of Eswatini will liberali ze the trade in ser vices sector for 
economic transformation.  
Industrial cluster development  
3.9.  The government of the Kingdom of Eswatini will form cluster and sector driven industriali zation, 
through agglomeration of interlinked production activities.  
Industrial financing  
3.10.   The government of the Kingdom of Eswatini will increase opportunities for access to finance 
for domestic investors within the industrial sector.  WT/TPR/G/447  • Southern African Customs Union  
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  Industrial infrastructure development programme  
3.11.   The government of the Kingdom of Eswatini will continue the developm ent of quality 
infrastructure to support industrialization.  
Investment promotion  
3.12.   The government of the Kingdom of Eswatini will improve the investment climate to encourage 
both domestic and foreign investment.  
Small medium and micro enterprise development and inclusive growth  
3.13.   The government of the Kingdom of Eswatini will create an enabling environment to support 
development of small medium and micro enterprises.  
Inclusive industrial development  
3.14.   The government of the Kingdom of Eswatini will create an enabling environment for the 
participation of women, youth, and people living with disabilities.  
Sustainable industrial development  
3.15.   The government of the Kingdom of Eswatini will create a sustainable environment for 
industriali zation.  
Competition  
3.16.   The government of the Kingdom of Eswatini will encourage fair competition to enhance both 
efficient and cost -effective marketing.  
Trade for Industriali zation  
3.17.   The government of the Kingdom of Eswatini will support the liberalization of goods and 
services.  
3.18.   For a successful industrial development, the government recogni zes the importance of 
harmoni zing policies through aligning the industrial policy and mainstreaming it into other sectoral, 
national and regional programmes.  
3.2  Special Economic Zone Act 
3.19.   The government of the Kingdom of Eswatini has, in 2018, enacted an Act to provide for the 
establishment of Special Economic Zones, Special Economic Zones Committee, Special Economic 
Zones Tribunal and incidental matters.  
3.20.   The Special Economic Zones Act, 2018 has, as  of October  2022, designated two sites as SEZs 
and they are the Royal Science and Technology Park and King Mswati III International Airport.  
4  TRADE – RELATED TECHNICAL ASSISTANCE  
4.1.  Eswatini has benefited from several technical assistance and capacity building  initiatives offered 
by the WTO . During the period under review, two officials benefited from the French and Irish Mission 
Internship Programme and one official participated in the Advanced Trade Policy Course . Eswatini 
has also benefited from the Young Pr ofessional Program me offered by the WTO . Several other 
short-term training program mes and seminars have also been extended to both our Mission in 
Geneva and Capital based officials.  
4.2.  Eswatini joins other developing countries and least developed countries to  encourage developed 
countries to continue providing technical assistance towards building capacities of our countries . WT/TPR/G/447  • Southern African Customs Union  
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  Eswatini further wish to request for more technical assistance for the implementation of her category 
"C" commitments under the WTO Trad e Facilitation Agreement.  
4.3.  Eswatini is also in the process of reviewing her National Export Strategy and this will be through 
support from the United Nations Development Programme . The NES is aimed to achieve the following 
policy objectives, which are:  
a) To expand the export base and ensure an increased mix of exports, thus reducing the 
burden on the sugar industry as the main foreign exchange earner;  
b) To strengthen the existing relationships with current markets to ensure that Swaziland 
takes full advantage o f preferences offered by these markets;  
c) To enhance market access for exports from Swaziland through branding and improved 
product quality;  
d) To improve trade facilitation through the establishment of strong public -private 
partnerships ; and 
e) To pave the way for technological innovations that will enhance the competitiveness of 
Swaziland's exports by ensuring the use of low cost production methodologies that do 
not compromise the national objective of employment creation.  
5  CONCLUSION  
5.1.  The Government of the Kingd om of Eswatini remains committed to the sustenance of the 
multilateral trading system and will continue to ensure that the trading rules or disciplines are 
observed . Eswatini believes that the multilateral trading system remains the relevant global platfor m 
that provides equal opportunity to all its members in the elaboration and execution of WTO rules 
regardless of their economic status.  
 WT/TPR/G/447  • Southern African Customs Union  
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  LESOTHO  
1  INTRODUCTION  
1.1.  The 5th Trade Policy Review outlines Lesotho 's trade policy developments during t he review 
period of 2016 -22 in pursuit of her WTO obligations . These developments were anchored on both 
the National Strategic Development Plan (NSDP) I (2012/13 – 2016/17) and NSDP II (2018/19 – 
2022/23).  
1.2.  The NSDP II is a blueprint for all development eff orts and emphasi zes on the private sector 
development . It builds on the achievements and lessons drawn from the implementation of the 
NSDP  I. The emergence of the COVID -19 pandemic hindered progress towards achieving the NSDP  II 
objectives . Lesotho has not  been immune to external trade shocks including effects of COVID -19, 
lingering geo -political tensions and inflationary pressures which affect her developmental 
aspirations.  
1.3.  The report further provides details on the initiatives undertaken to improve the trade and 
investment climate in Lesotho, and interventions that the Government of Lesotho has made to 
address these challenges . The Government of Lesotho implemented various mitigating strategies 
such as supporting agricultural and financial sectors as wel l as the private sector . In addition, 
Lesotho developed the National Trade Policy Framework in 2020 towards implementation of the 
NSDP  II. 
2  MACROECONOMIC DEVELOPMENTS  
2.1  Gross domestic product  
2.1.  After experiencing significant supply and demand shocks caused by t he pandemic in 2020, 
economic activity improved in 2021 -22 with GDP growth recovering to 1.8 % from a negative 6 % in 
2020-21. The increase was mainly supported by an improvement in private sector and household 
spending following opening of the economy . Meanwhile, investment activity profited from continued 
capital spending on large -scale infrastructure projects . External demand also provided additional 
support to Lesotho 's textiles exports.  
2.2.  Economic recovery continued in the first half of 2022 . Growth in the  first quarter expanded by 
1.4%, supported by strong growth of 52.6  per cent in mining and quarrying sector and construction 
which expanded by 17.3 %. However, growth was offset by poor performance in agriculture sector 
which contracted by 11.9 %. Growth in t he second quarter slowed to 0.4 % as a result of weak 
economic performance.  
2.2  Fiscal policy  
2.3.  For the period under review, Lesotho has not been able to adequately grow to reali ze 
anticipated employment creation and poverty reduction . Growth has always been vola tile, 
nonetheless, major economic growth was anchored by significant injection of capital into the 
economy to support massive projects that have specific lifespan and after completion would leave a 
gap in economic growth . The downward trend in public expen diture increases alongside buoyant 
SACU transfers but fails to be pared back when they fall . A reduction in receipts typically leads to a 
fiscal adjustment and contractions in domestic absorption, weakening short -term economic growth, 
worsening fiscal and external balances while increasing government debt, and lowering international 
reserves.  
2.4.  Fiscal restraint had been exercised for the period under review, serving to halt the upward 
trend in overall spending and restoring fiscal sustainability, albeit tempo rarily. Wage spending 
remains the largest component of overall expenditure and has been on an increasing trend over 
time. In 2016 -17 through 2019 -20 government operations recorded overall deficits ranging 
from 1.3 to 7.6% of GDP . The deficits were attribut able to continued volatility of SACU receipts and 
slower growth of nominal GDP over the reference period.  WT/TPR/G/447  • Southern African Customs Union  
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  2.5.  The total revenue including grants and SACU receipts grew slightly at an annual average of 
1.7% from 2016 -17 to 2019 -20. The sluggish growth in total revenues was a result of poor 
performance of tax revenue, which grew at a slower pace than the growth rate of nominal GDP and 
CPI with exception of 2018 -19 where it grew by 20.6 %. 
2.6.  Expenditure continued to be driven by high wage bill, which averaged 1 7.1% of GDP and 
made -up 32.9 % of the total expenditure between 2016 -17 and 2019 -20. 
Table 2.1: Lesotho : Growth and fiscal operations 2016 -17 – 2021 -22 
 
2016 -17 2017 -18 2018 -19 2019 -20 2020 -21 2021 -22 
National accounts ( real sector)  Act. Act. Act. Act. Act. Act. 
Nominal GDP at market prices  31,010.4  31,508.2  34,171.1  35,111.6  34,911.0  33,123.6  
Nominal GDP growth  2.2 1.6 8.5 2.8 -0.6 -5.1 
Real GDP at market prices  22,331.4  21,720.9  21,437.8  21,015.2  20,195.3  20,519.0  
Real GDP growth (%)  1.9 -2.7 -1.3 -2.0 -3.9 1.6 
Change in GDP deflator (%)  0.3 4.5 9.9 4.8 3.5 -6.6 
Inflation ( annual average) (%)  6.2 5.8 4.7 4.9 5.4 5.7 
Government accounts              
Revenues  14,051.7  14,914.4  16,013.7  16,257.6  18,632.8  17,569.4  
% of GDP  45.3 47.3 46.9 46.3 53.4 53.0 
Revenue without SACU  9,532.7  8,760.2  10,471.4  10,031.4  9,652.2  11,561.4  
% of GDP  30.7 27.8 30.6 28.6 27.6 34.9 
Taxes  6,397.4  6,314.3  7,616.8  7,346.5  6,778.6  7,756.5  
% of GDP  20.6 20.0 22.3 20.9 19.4 23.4 
Taxes on income, profits and capital gains  3,726.5  3,487.3  4,313.1  4,052.1  3,722.1  4,087.9  
% of GDP  12.0 11.1 12.6 11.5 10.7 12.3 
Taxes on goods and services  2,669.0  2,826.2  3,299.6  3,294.4  3,056.4  3,668.5  
% of GDP  8.6 9.0 9.7 9.4 8.8 11.1 
Excise taxes  388.0  406.8  393.2  372.6  420.1  596.7  
% of GDP  1.3 1.3 1.2 1.1 1.2 1.8 
Grants  1,229.0  822.1  1,076.8  1,255.9  1,049.0  1,756.6  
% of GDP  4.0 2.6 3.2 3.6 3.0 5.3 
Non-tax revenue  1,906.3  1,623.8  1,777.8  1,429.0  1,824.7  2,048.3  
% of GDP  6.1 5.2 5.2 4.1 5.2 6.2 
SACU Revenue  4,519.0  6,154.2  5,542.2  6,226.2  8,980.5  6,008.0  
% of GDP  14.6 19.5 16.2 17.7 25.7 18.1 
Expenditures  16,780.7  15,566.5  17,629.2  18,935.1  16,749.7  19,171.5  
% of GDP  54.1 49.4 51.6 53.9 48.0 57.9 
Expenses  12,622.7  12,113.0  13,102.7  13,521.0  12,835.7  13,583.8  
% of GDP  40.7 38.4 38.3 38.5 36.8 41.0 
Compensation of employees  5,277.4  5,436.1  5,994.7  5,890.6  6,029.7  6,130.2  
% of GDP  17.0 17.3 17.5 16.8 17.3 18.5 
Use of goods and services  3,465.8  2,667.3  3,112.5  3,161.1  2,330.5  2,152.5  
% of GDP  11.2 8.5 9.1 9.0 6.7 6.5 
Source:  Ministry of Finance and Development Planning.  
2.7.  In 2020 -21, Lesotho 's fiscal policy was fixated on reprogramming public expenditure and 
mobili zing additional external resources to contain the COVID -19 pandemic while mitigating the 
negative economic shock associated with pandemic containment measures . Government also 
shouldered the population and various economic activities by supporting agricultural and financial 
sectors as well as private sector . Further to this, social protection measures, softer monetary policy, 
tax exemptions and tax holidays were implemented . The fiscal performance of 2020 -21 was better 
than expected as a result of savings realiz ed due to suspension of other governmental operations 
during 2020 -21. 
2.8.  Nevertheless, Lesotho will continue to monitor the various economic risks and effectively 
manage any external shocks that may affect the wellbeing of the nation . The medium -term priority  
is to implement structural reforms by among others : increasing inclusive and sustainable economic 
growth ; private sector job creation ; strengthening human capital and enhancing transparency as 
well as accountability of public institutions ; promoting regio nal collaboration to ensure resilient 
infrastructure development and energy provision.  WT/TPR/G/447  • Southern African Customs Union  
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  2.3  Monetary policy  
2.9.  The Central Bank of Lesotho (CBL) implements and oversees the monetary policy in Lesotho . 
The CBL  is mandated to maintain price stability . The primary objective of maintaining price stability 
is attained by preserving Net International Reserves (NIR) at a level that is consistent with the 
country's exchange rate policy, that is, the parity between the  Loti and the South  Africa n Rand . The 
NIR target floor (expressed in U .S. dollars), is determined as the level that covers  120.0 % of narrow 
money (M1) . This provides for full coverage of M1 liabilities and provides an additional 20.0 % cushion 
over the 100 % for unexpected shocks.  
2.10.   The NIR hovered between 100.0 and 120.0 % of M1 in 2018 and 2019 . In nominal terms, NIR 
averaged around US D 730 million . In 2018, the government incurred a sizeable spending on 
procurement of services, which led  to a significant dent in NIR position . The effects of that spending 
filtered into 2019 as NIR struggled to recover, despite a growth of 6.3 % in SACU receipts . From 2020 
onwards, NIR remained above the 120 % of M1 mark, benefit ing mostly from an increase of  36.9% 
in SACU receipts in 2020, emergency assistance from the IMF through Rapid Credit Facility and 
Rapid Financing Instrument, and Special Drawing Rights (SDR) allocation in  2021. NIR rose by 9.1 % 
between 2018 and closed the review period at an average o f USD 770 million, which is equivalent 
to 128% of M1.  
Chart 2.1: NIR as a  percentage  of M1  
 
Note:  Figure 1 : NIR as a percentage of M1.  
Source:  Central Bank of Lesotho . 
2.11.   The Bank operationali zes the monetary policy decision through conduct of open market 
operations (OMOs), which influences the discount rate on treasury bills (T -Bills) (intermediate target) 
in line with developments in the Common Monetary Area (CMA), particularly South  Africa . 
Regional ly, competitive discount rates are expected to enhance the attractiveness of the government 
of Lesotho securities relative to foreign securities, and concurrently curb, as far as possible, the 
capital outflows.  
4005006007008009001,000
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2018 2019 2020 2021 2022MILLIONS OF USDNIR Target @120% of M1NIR level
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Figure 1: NIR as a percentage of M1
Source: Central Bank of Lesotho. WT/TPR/G/447  • Southern African Customs Union  
- 29 - 
  2.12.   Overall, domestic T -Bills discount rates cont inued to remain within the desired range in 
comparison to the South  Africa n counterpart rates . In 2020 and 2021, domestic T -Bills rates 
experienced a substantial decline as CBL reduced the policy rate in a quest to support economic 
activity following the C OVID -19 pandemic induced economic slump . In 2022, the T -Bills discount 
rates surged following the global policy rate hikes aimed at haltering the soaring inflation stemming 
from Russia -Ukraine war . Nonetheless, the auctions carried out during the period un der review were 
successful and oversubscribed . The oversubscriptions signal the structural liquidity surplus facing 
Lesotho, given limited avenues for investment.  
2.13.   Regulation of the Financial Sector : As the Regulator of the financial sector, the Bank 
contin ually reviews existing laws and proposes new ones in order to address the changing needs of 
the sector . The following pieces of legislation were gazetted during the review period:  
• Security Interests in Movable Property Act was enacted and the implementing 
regulations were published in 2020 . The Act and the regulations, in essence, lay down 
a legal framework which is intended to make it possible for registration of movable 
assets as collateral for borrowing . This will improve access to finance for both 
house holds and businesses consequently has a huge potential to reduce the costs of 
borrowing;  
• Subsequent to the enactment of the Pension Funds Act in 2019, the Pension Funds 
Regulations were promulgated in order to implement the Act in 2020 . The Act and the 
regulations strive to protect the interests of people who make contributions with the 
aim of building a fund from which they will draw when they reach their retirement age 
and develop the domestic capital market by requiring that a portion of the pensions 
fund contributions be invested in Lesotho;  
• Insurance (Registration and Licensing Requirements for insurers) Regulations 2021 . 
This law outlines the application process and requirements for obtaining a license to 
carry on insurance or re -insurance business in Lesotho under the Insurance Act, 2014;  
• Financial Institutions (Know your Customer) Guidelines, 2021 . These supersedes the 
Financial Institutions (Know Your Customer) Guidelines, 2007;  
• Money laundering and financing of terrorist activities are now regula ted under a more 
modern regime, namely : the Money Laundering and Proceeds of Crime Act, 2008, as 
amended in 2016 ; and the Money Laundering and Proceeds of Crime Regulations, 2019 ; 
and 
• Insurance (Qualification Requirements for Insurance Intermediaries) Noti ce, 2021 . This 
law prescribes the minimum qualifications which insurance intermediaries and principal 
officers should hold in order to qualify to lawfully conduct insurance business in Lesotho . 
It applies to insurance agents, insurance brokers, and princip al officers.  
2.4  Tax policy  
2.14.   Lesotho 's Tax Policy objective is to collect adequate revenue necessary for delivering 
government policies and priorities in an efficient and equitable manner . This is achieved directly 
through improvement in tax policy -making  proce ss. The Lesotho Tax Policy is based on four strategic 
principles : to enable economic growth and development ; to provide stable resources for 
development ; to pursue fairness and distributive equity and ; simplicity, certainty and clarity.  
2.15.   The Revenue Service s Lesotho (RSL) formerly known as the Lesotho Revenue Authority (LRA) 
is principally responsible for implementation of the Tax Policy in Lesotho . It was re -named following 
the enactment of the Revenue Services Lesotho Act 2022 with a view to enhance brand reputation 
and build a service brand to emphasi ze that organization strives to be more service oriented entity . 
There are two main domestic tax categories ; Tax on Income and Profits and Value Added Tax.  
2.16.   Taxes levied under the Income Tax Act are:  
• Company/Co rporate Income Tax (CIT) currently 25 % (10% for manufacturing and 
commercial farming sectors);  
• Pay As you Earn ; rates range from 20 % and 30 %; 
• Withholding Tax charged 5 % for residents and 10 % for non -residents . Withholding 
taxes are levied on supply of serv ices and are applicable on both resident and 
non-resident suppliers ; and WT/TPR/G/447  • Southern African Customs Union  
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  • Fringe Benefit Tax charged 40 %, imposed on the employer, based on the employers' 
fringe benefit taxable amount afforded to the employee . This has to be filed for every 
quarter of the financial year.  
2.17.   Value -added tax is the main consumption tax in Lesotho and is imposed on every taxable 
supply in Lesotho and on all imported goods and services . The standard rate is 15 % effective 
from 2018-19 financial year, there are however other substandard rates of 0 % for selected items 
considered to be basic commodities and exports out of Lesotho and 10 % for electricity and Telecoms 
increased from 12 % to 15% with effect from April  2020.  
2.5  Economic outlook  
2.18.   Consistent with projected GDP growth of 1. 9% in 2022 -23, the overall fiscal operations are 
expected to remain elevated at 7.7 % of GDP, due to reduced SACU revenue shares which fell by 
M608.5  million  against the M6.01  billion  received in 2021 -22. However, in 2023 -24 government 
operations are projec ted to record a surplus of 2.5 % of GDP at the back of improved SACU revenue 
shares . The Government wage bill is projected to grow marginally by 2.9 % for the 2022 /23 financial 
year. 
2.19.   Investment spending is projected to slow to 15.2 % of GDP in 2022 -23 before picking up 
by 14% of GDP in 2023/24 and is projected to average 14 % of GDP between 2024 -25 and 2025 -26. 
2.20.   Over the medium term, the Government will reinforce a long -term fiscal sustainability plan 
while providing buffers to safeguard against domestic and ext ernal shocks . To achieve this, Lesotho 
will reduce her dependence on volatile SACU revenues and ensure that recurrent expenditure is 
covered by domestic tax and non -tax revenues . The development component of SACU revenue will 
be used to finance development  spending.  
3  OVERVIEW OF TOP ECONOMIC SECTORS  
3.1  Agriculture, fisheries  
3.1.  Agriculture is one of the key sectors in  terms of contribution to the sustenance of livelihoods of 
Basotho . Efforts to increase productive capacity in the sector have been undertaken including 
increase of livestock and livestock products as well as food production . Farming of animals is the 
largest contributor to the sector performance . The contribution of the Agricultural Sector to GDP has 
been on the decline during the rev iew period . The sector contribution was 4.9 % in 2016 and 4.2 % 
in 2021, generally the average contribution was 4.6 % during this period.  
3.2  Mining  
3.2.  The mining sector in Lesotho has registered minimal growth from 4.6 % to 5.1 % contribution 
to GDP between 2016 and 2021 at current prices . The mining sector recorded an increase of 3.3 % 
in 2020, as a result of increase in mining activities, opening of the economy and diamond exports . 
However, the sector declined by 3.4 % in 2021 . However, most of the mining activities a re high 
capital intensive and have recorded low employment . Initiatives for value addition in the sector are 
in the pipeline.  
3.3  Manufacturing  
3.3.  Manufacturing sector in Lesotho is one of the main employers in Lesotho . Its contribution 
to GDP is relatively high,  however, its contribution has declined during this period . Although it has 
declined from at 17.6 % in 2016 to 7.7 % 2021. Manufacturing sector recorded a decline of 9.1 % 
in 2020 as a consequence of the COVID -19 pandemic . The traditional export markets were therefore 
affected as the borders were closed and this led to drastic loss of business and jobs . Additionally, 
the supply chains were disrupted leading to closure of almost all manufacturing industries as they 
were not producing essential goods . Textiles, clothing, footwear and leather industries are the largest 
contributors to manufacturing . The sector has since recorded a 7.7 % growth in 2021 buoyed by the 
easing of the restrictions due to COVID -19 and the recuperated manufacturing activities leading to 
increase in exports.  WT/TPR/G/447  • Southern African Customs Union  
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  3.4  Services sector  
3.4.  Services trade has been the largest contributor to GDP for last 10 years inclusive of the period 
under review . The services sector contributed 60 % to GDP in 2021, however, some sectors such as 
Tourism were adversely affec ted in 2020 recording a decline of 42.6 % in 2020 due to movement 
restrictions in both domestic and international markets . Financial services` contribution to GDP has 
recorded negative growth from 2016 to 2021 with recorded contribution ranging between of -9.2% 
and -3.1%. The sector performance has been volatile further registering ; -3.9, -1.9%, 51.5 %, 
and 6.3% in 2017,2018,  2019 and 2020 respectively . Public administration makes a large 
component of the services sector recording 17.3 % in 2016 and 22.3 % in 2021 . Information and 
Communication averaged 4.1 % during the review period . There is still a lot of scope for the growth 
in the services trade and certain sectors have been identified to increase job creation and economic 
growth.  
4  EXPO RT AND IMPORT TRADE  
4.1.  Total export value has been increasing albeit at a slow pace between 2016 and 2021, recorded 
figures are : M8,9 billion , M8,7  billion , M10  billion , M13,3billion, M13,9  billion  and M13,8  billion  
respectively.  
4.2.  On the other hand, imports re mained much higher than exports in the same period . The 
recorded imports from 2016 to 2021 are M21.5billion, M27.5  billion , M20.9  billion , M25.0  billion , 
M22,7  billion  and M26,9  billion  respectively . As a result, there was a trade deficit was maintained on  
the negative side during this period . Imports declined by 9.3 % in 2020 to M22.7  billion . 
4.3.  Exports : regional partners play an important role for Lesotho's exports, the same goes for 
North America and Europe . In 2021 export value of/in major markets constitu ted 99.1 % of the total 
exports . Exports destined to South  Africa  were 45.4 %, followed by United  States  of America and 
Belgium with 32.1 % and 19 % respectively . Eswatini, Germany, Canada, Botswana, Egypt, Mexico 
and United  Kingdom  contributed 3.5 % of exports in 2021 . Main export products were : clothes, 
footwear and textile ; diamonds ; wool fine or coarse animal hair ; bulk water ; food and beverage ; 
and electricity machinery and parts.  
4.4.  Imports : the majority of top sources of imports f or Lesotho were South  Africa  and the Asian 
Countries . In 2021 imports from South  Africa  were 76.0 %, followed by China with 9 %, 
Chinese  Taipei  with 5.3%. The main imported products were : petroleum products, miscellaneous 
manufactured articles ; machinery and  transport equipment ; chemicals and related products and 
manufactured goods.  
5  TRADE AND TRADE -RELATED POLICY DEVELOPMENTS  
5.1  Trade policies and strategies  
5.1.1   National Strategic Development Plan II (2018 -19 – 2022 -23) 
5.1.  The second 5 -year National Strategic Developme nt Plan (2018 -19 – 2022-23) – with the theme, 
"In pursuit of economic and institutional transformation for private sector -led job creation 
and inclusive growth " was a blueprint for all development efforts in Lesotho and served as a basis 
for the National T rade Policy Framework.  
5.2.  The NSDP II emphasi zes private sector development and gives priority to pursuing 
people -centred development . The Plan identifies four key strategic goals, referred to as key priority 
areas, to foster job creation and inclusive growth and to further reduce poverty:  
• Enhancing Inclusive and Sustainable Economic Growth and Private Sector -led job 
creation ; 
• Strengthening Human Capital ; 
• Building Enabling Infrastructure ; and 
• Strengthening National Governance and Accountability . WT/TPR/G/447  • Southern African Customs Union  
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  5.3.  The NSDP II targets economic growth of 5 % annually, anchored on the four productive sectors : 
agriculture, manufacturing, tourism and cr eative industries, and technology and innovation.  
5.4.  The COVID -19 pandemic negatively affected the growth projections due to delays in 
implementation of the projects and high job losses as a result of deteriorating economic growth 
prospects . The NSDP II will be revised and extended for the next five years to 2027 -28 Fiscal Year, 
the revision will incorporate resilience measures to external shocks in order to stabilize growth.  
5.1.2   National Trade Policy Framework (2021 -25) 
5.5.  Lesotho formulated a comprehensive National  Trade Policy Framework to provide policy 
direction towards achieving sustainable economic growth as identified in the NSDP II anchored by 
manufacturing, services and development of requisite infrastructure for job creation and sustainable 
development . Launched in December  2020, the National Trade Policy Framework provides 
transparent guidelines for implementing Lesotho's  trade agenda . This policy framework embraces 
Lesotho membership and participation in regional and international trade.  
5.6.  Lesotho's  National  Trade Policy is built on nine (9) thematic areas:  
• Domestic market infrastructure and trade;  
• Trade agreements;  
• Regional integration and export competitiveness;  
• Trade in services;  
• Trade facilitation;  
• National quality infrastructure;  
• Intellectual property;  
• Competition and consumer protection ; and 
• Trade and sustainable development.  
5.1.3   National Trade Strategy  
5.7.  The National Trade Strategy, which is an integral part of the National Trade Policy Framework, 
orients the country 's trade development to address challenges and identify strengths and 
opportunities for export development in Lesotho . The trade strategy aims to improve the capacity 
of Lesotho 's private sector to compete in regional and international markets, enhance the business 
ecosystems and strengt hen the country`s ability to use trade as an engine for growth . The Strategy 
identifies three priority sectors namely, horticulture, textiles and apparel, and light industry.  
5.8.  Under the theme "Export competitiveness for sustainable growth " implementable wit hin 
five years, the trade strategy identifies three strategic objectives:  
• Strengthening the competitiveness of the business ecosystem and improving trade 
facilitation;  
• Intensifying existing trade relationships and diversifying the range of export 
destinati ons; and 
• Expanding the national productive capacity and diversifying the export basket.  
5.9.  Through implementation of the strategy Lesotho will be in a position to exploit all preferential 
regional and international markets.  
5.2  Quality infrastructure development  
5.10.   The Lesotho Standards Institution (LSI) was established in 2021 through the legal notice 
No. 131 of 2021 . The legal notice implements the Lesotho Standards Institution Act, 2014 . The LSI 
is mandated to:  
• develop and publish Lesotho  Standards;  
• carry out conformity assessment services (testing, certification and inspection) ; and 
• offer training services and house the WTO/TBT Enquiry Point.  WT/TPR/G/447  • Southern African Customs Union  
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  5.3  Comprehensive National Agricultural Policy  
5.11.   Lesotho is in the process of developing a comprehensiv e National Agricultural Policy . The 
comprehensive Agriculture Policy follows two principal policy frameworks that guided the agriculture 
sector for over 16 years, namely the Agriculture Sector Strategy and Lesotho Food Security Policy 
and Strategic Guideli nes 2005 . The major objectives of the policy include:  
• building of sustainable infrastructure for Agriculture;  
• improved management of rangelands;  
• building capacity of farmers;  
• improving production of high value crops and livestock products ; and 
• development of value chains in agriculture.  
5.12.   The National Agriculture Policy is inspired by the need to develop an overarching agricultural 
sector policy that will provide strategic direction to agricultural sub -sectors and all programmes 
relevant to agriculture . The policy will further ensure sustainability of commercial agriculture and 
food security.  
5.3.1   National Irrigation Master Plan  
5.13.   Development of irrigated Agriculture in Lesotho gains topmost priority for combating hunger, 
food security, poverty and creation of employ ment opportunities . The National Irrigation Masterplan 
in Lesotho focuses on developing irrigation infrastructure and increasing acreage under irrigation 
from 2021 to 2050.  
5.3.2   Livestock policy  
5.14.   The Policy has four pillars, these broadly focus securing access t o basic production of inputs, 
strengthening institutional capacity and support services and promoting gender mainstreaming and 
the youth . The implementation of the Policy  began in 2021 and will pave way to moderni ze 
legislation.  
5.4  Trade facilitation  
5.15.   Lesotho submitted her instrument of ratification of the WTO Trade Facilitation Agreement in 
January  2016. The National Trade Facilitation Committee (NTFC) was established in 
September  2017, to coordinate all trade facilitation activities in Les otho. The NTFC has facilitated 
the development of National Trade Facilitation Roadmap in 2019 which outlines the trade facilitation 
agenda for five years.  
5.16.   In recent times, Lesotho has embarked on several initiatives constituting a strong base for 
customs m odernization and trade facilitation, including roll out of ASYCUDA World system in 2016, 
which was subsequently upgraded in 2019 . In addition, the reforms included upgrading of the 
Lesotho Trade Information Portal in 2021 . The implementation of the Nationa l Single Window System 
is underway having started in 2021 . Phase I of the National Single Window, connecting two 
Government agencies, was launched in June 2022. 
5.17.   The second phase of the project will roll out the National Single Window to connect ten more 
government agencies and implementation will begin in 2023 . Once fully commissioned the Single 
Window will lead to reduction of transaction costs for businesses, faster clearance and release of 
goods, increased transparency and predictability . Lesotho is impl ementing a Coordinated Border 
Management System.  
5.5  Industrial policy  
5.18.   The Lesotho Industrial Policy developed in 2015 is currently under review . The review will 
among other key areas emphasi ze: 
• Development of entrepreneurship and business linkages;  
• Increased value  addition;  WT/TPR/G/447  • Southern African Customs Union  
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  • Diversification of export products ; and 
• Improvement of the Standards and Quality infrastructure.  
5.6  Investment policy  
5.19.   The Investment Policy  of 2015 is also under review . Its objectives are to create a conducive 
investment environment  for investment promotion and facilitation and to connect foreign and 
domestic investment for economic transformation.  
5.7  Competition legislation  
5.20.   Lesotho has made strides towards the establishment of a body to regulate competition issues 
during the period und er review . The Competition Bill provide for promotion and protection of 
competition by establishing a Competition Commission, prohibiting restrictive agreements and the 
abuse of dominant position as well as establishing a system for control of mergers was developed 
and has been approved by Cabinet . The Commission will be an overseer of all competition issues 
with powers to monitor, regulate and control acts or behaviour likely to adversely affect competition . 
The Bill is going through the final stages of en actment.  
5.8  Intellectual property rights  
5.21.   Lesotho has made a number of notable developments in relation to intellectual property rights. 
These entail automation of the Industrial Property Registry System (IPAS4.0) in 2022 . The system 
automates the processing of trademarks, patents and industrial designs applications, examinations 
and gazette publication . Furthermore, five technology and innovation support centres were 
established.  
5.8.1   National Intellectual Property Policy and Strategy (NIPPS)  
5.22.   The review  of national development policies, strategies and plans was undertaken in 2022 . 
Lesotho is in the process of developing the policy and strategy . Upon the completion of the NIPPS, 
Lesotho's  IP Laws will be revised and updated as they are currently outdated.  
5.9  Government procurement  
5.23.   Government Procurement is an important development tool for Lesotho . The Public 
Procurement Policy was developed in 2018, among others to improve transparency, development of 
policies, legislation and public procurement processes . The Policy  envisages the establishment of the 
Public Procurement Authority that will be responsible for monitoring, regulating procurement 
activities and harmoni zing processes.  
5.10  Lesotho energy policy  
5.24.   The Electricity Master Plan 2018 -2028 was developed to imp rove electrification rate in line 
with the Sustainable Development Goal 7 which states that energy will be accessible to all by 2030 . 
The Plan foresees utilization and acceleration of sustainable energy resources, such as hydropower 
for energy generation . The Energy Policy 2015 -2025 was also developed to reform the energy sector . 
In this context, the Energy Bill has been drafted and it will facilitate implementation of the Policy  
and effect the reforms once enacted . The proposed reforms include establishmen t of the National 
Energy Fund, Energy Investment Facilitation Unit and Rural Energy Agency.  
6  REGIONAL AND MULTILATERAL TRADE RELATIONS  
6.1  SACU, SADC, SACU -EFTA FTA, SACU –MERCOSUR PTA  
6.1.  Lesotho continues to pursue market access opportunities for goods and service s through her 
Membership to SACU and SADC . The SACU Agreement forms the basis for engagement with third 
parties . Since 2021, SACU has embarked on the industriali zation path to improve economic 
development in all member States and has prioriti zed five secto rs to attain this goal . The five sectors 
include : cosmetics ; leather and leatherworks ; meat and meat products ; fruit and vegetables ; and WT/TPR/G/447  • Southern African Customs Union  
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  textiles and clothing . SADC is similarly implementing the SADC Industriali zation Strategy and 
Roadmap that covers similar value chains.  
6.2.  The focus is on building regional partnerships and cooperation . Lesotho is in the process of 
developing the regional value chains for private sector to take advantage of the initiatives that SACU 
and SADC have initiated . Regional trad e and investment promotion initiatives are also at the centre 
of her development agenda.  
6.3.  Lesotho as a member of SACU has concluded a number of trade agreements . SACU-EFTA Free 
Trade Agreement and SACU -MERCOSUR Preferential Trade Agreement are therefore suc h 
agreements under SACU . The purpose is to improve trade with these countries focusing on exports . 
The SACU -EFTA Free Trade Area is undergoing a review that started in 2016.  
6.2  SADC -EU EPA, SACUM -UK EPA  
6.4.  The SADC -EU Economic Partnership Agreement (EPA) came into force in October  2016 (for 
Trade in Goods) following conclusion and finali zation of 10 -year trade negotiations . The SADC – EU 
EPA is development oriented in nature granting an asymmetric market access to SADC EPA States . 
Furthermore, the EU provi des technical and financial assistance on identified areas to enhance trade . 
For Lesotho, the EPA provides a great opportunity for her products and is becoming one of the 
important markets to diversify exports . There is also scope to increase non -diamond e xports into 
the EU market under this Agreement and efforts are underway to achieve this goal . The Agreement 
is currently under review after five years of implementation . Trade in services negotiations are on 
hold; therefore, the agreement covers trade in g oods thus far.  
6.5.  The EU has also provided training on rules of origin specifically the application of diagonal 
cumulation . These training workshops were held regionally and nationally and Lesotho has benefit ed 
from the capacity building.  
6.6.  The UK was also one of the important markets in the EU for most SADC EPA States including 
Lesotho, with B REXIT  in play SACU and Mozambique entered into a trade agreement essentially to 
maintain the market access preferences . The SACUM -UK EPA entered into force on 1  January  2021. 
The benefits accruing to the EPA are similar to those of the EU, since the EU -SADC EPA has been 
replicated for the SACU+Mozambique -UK EPA.  
6.3  African Growth and Opportunity Act  
6.7.  The African Growth and Opportunity Act (AGOA) provides preferences for about  
6,400 tariff lines to African countries . Itis set to expire on 30  September  2025, following an 
extension by the US Congress in June 2015. 
6.8.  Lesotho has benefited significantly under the AGOA dispensation especially in the textiles and 
clothing sector . The sector has become one of the highest employers in Lesotho since AGOA entered 
into force in 2000 . Lesotho had developed the National AGOA Response Strategy and Action Plan 
but revised it for the period, 2019 -25. The Strategy focuses on export diversification  to increase her 
market share and take full advantage of AGOA by minimi zing reliance on textiles and apparel 
products.  
6.9.  The implementation of the Strategy was affected by the COVID -19 pandemic from 2020 . 
Lesotho hopes that AGOA is extended beyond 2025 in or der to be able to implement this Strategy, 
at the least an arrangement with the same benefits would be beneficial to countries such as Lesotho 
given the significant economic development contribution AGOA made over the years.  
6.4  African Continental Free Trade Area  
6.10.   The African Continental Free Trade Area (AfCFTA) Agreement is one of the important trade 
agreements for the African Continent and for Lesotho . This is one of major projects under the 
African  Union 's Agenda  2063. Its goal is to increase intra -African t rade and reduce high 
unemployment across the continent . The AfCFTA brings together 55 countries of the African 
Continent to create a huge continental market of about 1.3  billion  people with a combined GDP of 
USD 3.4 trillion for both goods and services . The AfCFTA entered into force in May 2019 with the WT/TPR/G/447  • Southern African Customs Union  
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  operational phase of the AfCFTA launched in July 2019 while actual trading commenced in 
January  2021. The Agreement also covers investment, competition, intellectual property and dispute 
settlement which have recently been approved during the February  2023 Summit in Addis Ababa.  
6.11.   Lesotho deposited her instrument of ratification on the 27  November  2020, signalling her 
commitment to i mplement the agreement and participate in all initiatives brought including the 
industriali zation efforts within the continent . For Lesotho, the AfCFTA paves a way to enter into new 
markets to advance trade in value -added production and sourcing of inputs across the continent on 
liberal terms . For trade in Goods, Lesotho is looking for enhanced market on agricultural products, 
textiles and apparel and general manufactured products.  
6.12.   Trade in services is essential to achieve the developmental aspirations for Lesotho and the 
AfCFTA provides a platform for development of more services for export.  
6.5  Tripartite Free Trade Area  
6.13.   Lesotho is taking part in the Tripartite Free Trade Area (TFTA) . It provides opportunities for 
trade in terms of exports and sourcing of inpu ts. The TFTA has a large combined market with a 
combined population of about  600 million and a combined GDP of over USD 1.3 billion . This provides 
latitude for export diversification and sourcing of inputs . Lesotho is in the process of signing and 
ratifyin g the TFTA to cement her commitment to trade with regional partners.  
6.6  World Trade Organi zation  
6.14.   Lesotho has been a Member of the WTO since 1995 . She participates in different groupings of 
countries within the WTO based on development and geographical interes ts. These include the Africa 
Group and African, Caribbean and Pacific Group of Countries as well as Least -Developed Countries 
(LDCs) . Lesotho subscribes to multilateral trading system and acknowledges the importance of trade 
for economic transformation to achieve growth and prosperity which ultimately lead to poverty 
alleviation and sustainable development . There has been slow or no progress on the Doha 
Development Agenda (DDA) and many issues that are still pertinent and solutions are needed for 
levelling the playing field in the multilateral trading system . These include Agriculture and 
Development issues . The development pillar in the WTO remains relevant especially in times of great 
global trade shocks such as those brought by the COVID -19 pandemic in 20 20-21. 
6.15.   The rules -based system works for all Members of the WTO and that the functional dispute 
settlement will improve global discipline in trade . The Trade Facilitation Agreement is one of the 
major strides in the WTO that is contributing to major reforms  that are taking place in Lesotho.  
6.16.   Lesotho's membership in the WTO is meant to deliver multitudes of people out of poverty 
hence ensuring that the multilateral system works for all countries for them to be liberated from the 
socio-economic challenges that they are currently facing.  
7  TRADE -RELATED TECHNICAL ASSISTANCE  
7.1.  Lesotho has benefited from technical assistance initiatives provided by development partners 
and the international organi zations for the period under review . The support covered, among others, 
training workshops organi zed by the WTO focusing on Technical Barriers to Trade (TBT), Sanitary 
and Phytosanitary (SPS) issues, Trade Facilitation and notifications.  
7.2.  Other international organizations such as UNCTAD provided training on Trade Facilitation by 
training the National Trade Facilitation Committee on various topics including how to use the Reform 
Tracker.  
7.3.  Lesotho further received support from the Enhanced Integrated Framework (EIF) tier 
2 programme . The project provided funding for p olicy development ; marketing strategies, SPS and 
TBT programmes.  
7.4.  With respect to the Trade -Related Facility, funding from the SADC Secretariat from the 
11th European Development Fund supported various activities such as Trade Facilitation ; upgrading 
Sanita ry and phytosanitary measures and TBT systems ; support for horticulture value addition ; WT/TPR/G/447  • Southern African Customs Union  
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  development of the National Trade Policy Framework and capacity building on competition policy ; 
strengthening the standards and quality infrastructure and operationali zation of the Trade and Tariff 
Administration.  
7.5.  The Private Sector Economic Diversification Project had specific objectives which included 
improvement of the business environment, skills development for the private sector, improving 
access to finance, produc t development and diversification of export products under different 
sectors . Registrar General's Office received virtual and physical training on the effective and efficient 
use of the Industrial Automation System from the World Intellectual Property Orga nization (WIPO).  
7.6.  Additional support on, but not limited to : SPS; TBT; Productive capacity ; Trade Facilitation and 
Institutional Capacity development is still required for efficient participation in the multilateral 
trading system.  
8  CONCLUSION  
8.1.  Lesotho has un dertaken significant reforms during the period under review to improve the 
economic landscape and livelihoods of the populace . Nonetheless, the major challenge is building 
productive capacity for successful economic transformation ; this to some extent slow s the pace of 
economic growth and development . Lesotho being a landlocked country is facing myriad challenges 
that limit her potential gain from trade . The cost of doing business is relatively high for LLDCs due 
to cross -border issues like lead -times, cumb ersome procedures, and inefficient transport and 
logistics systems.  
8.2.  Lesotho is advancing her economic recovery agenda by undertaking much needed planning and 
investment prioritization . This will be achieved through implementation of the necessary reforms to 
promote healthy competition in the business ecosystem and improvement of trade facilitation to 
attract investments while maintaining existing ones.  
 WT/TPR/G/447  • Southern African Customs Union  
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  NAMIBIA  
1  INTRODUCTION  
1.1.  Namibia is strategically located on the southwestern coast  of Africa and serves as a 
quintessential trade conduit with the rest of the world for landlocked neighbouring countries such as 
Botswana, Malawi, Zambia, Zimbabwe, and the Democratic Republic of Congo through the port of 
Walvis Bay . With a surface area of  824,292 square kilometers, Namibia is  one of the most sparsely 
populated countries in the world with an estimated population of 2,64  million  (World Meter of the 
UN). 
1.2.  Namibia is endowed with natural wind and sun resources and is amongst the most competitive 
destinations in the world with potential to become a producer and exporter of green hydrogen, 
reckoned to catalyse the decarboni zation of the planet . In this regard, a green hydrogen Council has 
been established in November  2022 to spearhead th e green hydrogen project . Namibia's primary 
infrastructure is well -developed and modern, with a good transport system whose road infrastructure 
quality is ranked the best in Africa, an efficient communication system with global cellular networks 
and global ly competitive Broadband, as well as a sophisticated financial sector . The economy is 
mostly export – driven, with mining, tourism, fishing, and agriculture being Namibia's key sectors.  
1.3.  In the transport and logistics sector, Namibia is positioning as an In ternational Logistics Hub1, 
compared to other ports in the region, the congestion -free port of Walvis Bay offers shipping line 
time savings of up to five days to Europe and the Americas, and a springboard into the Southern 
African Development Community (S ADC) trade block, with a market access of 330  million people.  
1.4.  Namibia is a founding Member of the World Trade Organization (WTO) in 1995 and continues 
to follow steps aimed at implementing consistent policies in the multilateral trading system . It is in 
view of the Preamble of the Marrakesh Agreement  establishing the WTO that, Namibia attaches 
great importance and commits to accelerate the implementation of any WTO reform that considers 
development as a core priority of any negotiation outcome . Namibia is r anked amongst the world's 
most politically stable countries, characterized by a stable democracy with low or no political risks . 
However, continues to grapple with key socio -economic challenges such as poverty, a high 
unemployment rate and income inequalit y. 
1.5.  Namibia is also vulnerable to climatic conditions, such as severe drought and floods that has in 
the past effected some parts of the country causing extensive damage food supply, infrastructure 
and grazing for animals.  
1.6.  The COVID -19 pandemic emerged towa rds the end of 2019 posing challenges to the Namibian 
economy and its people . Timely policy interventions and measures were put in place to contain the 
spread of the COVID -19 to protect lives, support businesses as well as to contain all unanticipated 
socio-economic impacts of the COVID -19 pandemic . Moreover, measures that were put in place for 
the nationwide lockdown during the State of Emergency in 2020 had also negatively impacted the 
Namibian workforce especially those employed in the informal sector.  
1.7.  During the review period, a few reforms such as those related to institutional and tax reforms 
were initiated to formalize the economy, increase efficiency in the public and private sector as well 
as to improve the ease of doing business . The purpose of th is 5th Trade Policy Review is to highlight  
Namibia' s trade and trade -related policy developments as well as the macroeconomic policy 
developments transpired under review period.  
2  MACROECONOMIC ENVIRONMENT  
2.1  Monetary policy  
2.1.  Given its Common Monetary Area membe rship, the Bank of Namibia which is responsible for 
formulation of the monetary policy and ensure price stability in the interest of sustainable economic 
 
1 Viewed at: https://www.npc.gov.na/wp -content/uploads/2021/11/Logistics -Hub-Master -Plan.pdf . WT/TPR/G/447  • Southern African Customs Union  
- 39 - 
  growth reduced the repo rate by 2.75 percentage points during 2020 to mitigate the adverse effects 
of COVID -19. The repo rate remained unchanged in 2021 and was increased by 300 basis points 
during 2022, from 3.75 % to 6.75 %. The 3.75 % repo rate was the lowest recorded in Namibia's 
history since the country gained its independence in 1990 . The monetary poli cy stance was adopted 
to support the struggling economy, while safeguarding the exchange rate and pegging arrangement 
of the Namibian dollars to the South  Africa n Rand.  
2.2  Inflation  
2.2.  On average inflation registered at 4.3 % during the period under review (2016 -21). Namibia 
has a limited scope over monetary policy discretion therefore it is unable to control imported 
inflation . Namibia's inflation rate rose to 3.6 % during 2021 compared to 2.6 % recorded in 2020 . 
This was largely driven by an increase in inflation for transport, housing and food and non -alcoholic 
beverages and a rise in international oil prices . The highest inflation was recorded with 6.7 % in 2016 
whilst the lowest rate of 2.2 % was recorded in 2020.  
2.3  Fiscal policy  
2.3.  Political stability and sound economic management, and a sustained fiscal commitment to social 
programs helped Namibia to confront developmental activities however the challenging domestic 
economic environment continued to impact the fiscal policy . During the FY 2017/18 and 2018/19, 
the budget deficit was maintained at 5.4 %, this was due to the higher SACU receipts and improved 
revenue collection from personal income and corporate tax compared to the budget deficit of 8.3 % 
recorded in FY 2015/16 . This further contributed to the decline in the deficit compared to the budget 
deficit of 6.9 % recorded during the FY 2016/17 . The downward revision was mainly a result of 
additional budgetary provisions to settle arrears and provision for critical services.  
3  ECONOMIC GROWTH AND SECTORAL PERFORMAN CE 
3.1.  COVID -19 presented exceptional challenges for the Namibian economy, resulting in a sluggish 
growth which caused economic contraction of 8 % in 2020, whilst economic growth improved to 2.7 % 
in 2021 . A negative growth of 8 % was the biggest contraction reco rded in the country's history . The 
Namibian economy was stagnant from 2016 to 2019.  
3.2.  Namibia's Gross Domestic Products (GDP) contracted by 1.6 % in 2019 compared to a growth 
of 1.1 % recorded in 2018 . Such a slow performance in 2019 was mainly due to the primary industries 
that declined by 8.9 % mainly caused by a decline performance recorded across all sub -sectors 
namely 'mining and quarrying with 11.1 % and agriculture, forestry, and fishing 5.7 %. 
3.3.  The mining sector accounted for 9 % of GDP on average betwee n 2015 and 2019 and 
contributed more than 50 % of foreign exchange earnings . Furthermore, the growth of GDP  growth 
in 2021, was mainly due to the improved performance in the primary and tertiary industries and 
attributed to a recovery in the production of d iamonds and uranium, coupled with positive real value 
addition in the wholesale and retail trade, hotels and restaurants and information, and 
communication sectors.  
3.4.  Tertiary industries remained the main contributor to GDP . On average it accounted for 65 % 
during 2017 -21 while primary and secondary industries each contributed around 17 % of GDP during 
period 2017 -21. WT/TPR/G/447  • Southern African Customs Union  
- 40 - 
  Figure 3.1: Gross Domestic Product (GDP) at constant prices, 2015 -21 
 
Source:  Namibia Statistics Agency, 2023.  
3.5.  Agriculture is one of Namibia's most important sectors since around 70 % of the country's 
population depends directly or indirectly on agriculture for their income and livelihood, mostly in the 
subsistence sector major crops . The ag ricultural sector is one of the largest employers in the country . 
The agricultural sector experienced massive challenges during 2021 . Among others, the locust 
outbreak destroyed the grazing land in some of the regions in the country . During the period unde r 
review the sector was characterized by the up and down effects of natural disasters such as floods 
and drought as well as human and wild animal conflicts especially in the northern and western parts 
of the country.  
3.6.  Tourism makes a significant contributio n to the Namibian economy and employment . The 
impact of COVID -19 which led to a subsequent travel restriction had a huge negative effect on the 
tourism industry and the Namibian economy at large . The number of international tourist arrivals in 
Namibia decl ined with 89 % from 1,595,973 in 2019 to 169,565 in 2020 . According to the 2018 
Labour Force Survey, tourism industry employed 83,056 people, however when the COVID -19 
pandemic hit the globe in 2020 it resulted in employment losses as over 80 % of the survey ed 
businesses, reduced staff numbers and a reduction in wages and salaries . During the pandemic, 
tourism related businesses faced challenges of a reduction in demand and inability to repay loans . 
In addition, only 24 % of the surveyed businesses have access ed the government stimulus support 
packages . Under WTO General Agreement on Trade in Services (GATS) Schedule, Namibia has no 
restrictions related to market access or national treatment with respect to any modes of supply for 
hotels and restaurants or trav el agencies and tour operators' services in its Schedule of Specific 
Commitments as well there are no restrictions on foreign ownership of hotels and restaurants in 
Namibia.  
3.7.  Manufacturing  Namibia manufacturers do no longer benefit from EPZ tax incentives . This was 
due to the amendments in the Income Tax Amendment Act, 2020 that  repealed the provisions of 
the Export Processing Zone that was contained in the Income Tax Act No 24 of 1981 . The phasing 
out of these base -eroding tax exemptions is now replaced by the introduction of the Sustainable 
Special Economic Zones . The National Policy on Sustainable Special Economic Zones Policy (SSEZ) 
aims to introduce a new framework to govern Namibia's approach to the industrial agglomeration 
strategy as well as to update and improve on the existing Export Processing Zones (EPZ) regime.  
3.8.  Since the inception of the Namibia EPZ regime, over 150 enterprises have been certified to 
operate as EPZ enterprises of which 29 were operating as at end of 2021 . However, due to a mix of 
inhibiting factors, many of the approved investments never took off . In 2021, six (6) companies 
were granted EPZ status without any tax incentives following the amendment of the Income Tax Act 
which repealed Sections 5, 6, and 7 of the EPZ Act in December  2020. Production of the EPZ 
125,000130,000135,000140,000145,000150,000
2015 2016 2017 2018 2019 2020 2021NAD(Million)Figure 1: Gross Domestic Product (GDP) at Constant Prices, 2015 -2021
Source: Namibia Statistics Agency, 2023WT/TPR/G/447  • Southern African Customs Union  
- 41 - 
  companies in the key sectors such as manufacturing, mineral processing, and vehicle assembling 
has declined to the value of ZAR  1.9 billion  in 2021 compared to ZAR  2.4 billion  recorded in 2020 
with the COVID -19 pande mic having been one of the contributing factors . The mineral processing 
sector continues to be the largest employer in EPZ with a total number of 1,454 jobs created . The 
value of exports from the EPZ slightly declined by 0.24 % from NAD  5,48 billion  in 2020  to 
NAD 5,46 billion  in 2021 . On the other hand, imports increased by 1.45 % to NAD  4,75 billion  in 
2021 compared to NAD  4, 69  billion  recorded in 2020.  
Figure 3.2: Total value -added by the manufacturing sector 2015 -21 
 
Source:  Namibia Statistics Agency, 2023.  
4  TRADE  BALANCE  
4.1.  Namibia continues to be a net importer of goods and services over the period under review . 
Namibia, hence, recorded trade deficits for the periods 2015 to 2022 with the to tal trade recorded 
at NAD  224.7  billion  for 2022 . The country recorded imports valued at USD  128.3  billion  in 2022, an 
increase of 34.8 % when compared to the previous year, when the imports were recorded at 
NAD 95.2 billion . On the other hand, the country recorded exports to the value of NAD  96.4 billion  
during 2022, which is a significant increase of 46.3 % in comparison to the NAD  65.9 billion  recorded 
during 2021.  
4.2.  The main export destinations in 2021 were : South Africa  20.1%; China 17.9 %; 
Botswana  12.6%; Zambia 7.3 % and Spain 6.3 %. Namibia sourced 49.1 % of her products from 
South  Africa , China 7 %, India 4.7 %, Peru 3.7 % and U nited States  2.6%. Namibia imports of 
petroleum oils topped the list of products that Namibia sourced from the rest of the world in 20 21 
accounting for 12.7 % of the total import followed by copper ores and concentrates 5.4 ; motor 
vehicles for transport of goods 3.1 %, pearls and precious stones (diamonds) 2.8 % and vessels 
2.4%. 
02,0004,0006,0008,00010,00012,00014,00016,00018,00020,000
2015 2016 2017 2018 2019 2020 2021NAD(Million)Figure 2: Total value added by the Manufacturing sector 2015 -2021
Source: Namibia Statistics Agency, 2023WT/TPR/G/447  • Southern African Customs Union  
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  Figure 4.1: Total trade statistics 2015 -21 
 
Source:  Namibia Statistics Agency.  
4.3.  The above is a graphical presentation clearly depicts the fluctuating trade statistics between 
Namibia and the rest of the world. It is also evident that the  COVID -19 pandemic had a negative 
impact on the overall trade statistics of the country when compared to prior years . Furthermore, it 
can be observed that trade between Namibia and the rest of the world has started to pick up again 
after 2021.  
5  INSTITUTIONA L REFORMS  
5.1  Establishment of autonomous bodies  
5.1.  The following structural reforms were affected to formalize the economy activities, increase 
efficiency in the public and private sector as well as to bring some improvements in the ease of doing 
business:  
5.1.1   Namibia Revenue Agency (NamRA)  
5.2.  Namibia established the Namibia Revenue Agency (NamRA) through the enactment of the 
Namibia Revenue Act 2017 (Act No.  12 of 2017) . The Ministry of Finance has merged the Department 
of Inland Revenue and the Directorate of Cus toms and Excise into a semi -autonomous institution 
called Revenue Agency (NamRA) . Since its establishment NamRA became an Agency of the State 
responsible for assessment and collection of State revenue . In addition, NamRA's  mandate also 
includes providing customs and excise services that facilitate trade, maximize revenue collections 
and protect Namibian borders from illegal importation and exportation of goods.  
5.1.2   Namibia Investment Promotion and Development Board  (NIPDB)  
5.3.  The Namibia Investment Promotion and Development Board (NIPDB) was established under 
Section  21 of the Companies Act No.  28 of 2004 as an autonomous entity in the office of the 
Presidency . NIPDB took over some of the functions previously performed by its prede cessor Namibia 
Investment Centre (NIC) a Directorate in the Ministry of Industriali zation and Trade.  
5.4.  NIPDB serves as the first point of call for potential investors wanting to do business in Namibia . 
The aim is to make Namibia the investment destination of  choice by improving the ease of doing 
business in Namibia by eliminating red tape and driving policy reforms . In addition, the Board 
promotes and facilitates investment by foreign and local investors as well as facilitates joint venture 
arrangements  that contribute to economic development and job creation . The Ministry of 
-60,000-40,000-20,000 - 20,000 40,000 60,000 80,000 100,000 120,000
2015 2016 2017 2018 2019 2020 2021
Exports Imports Trade BalanceNAD(Million)Figure 3: Namibia Total Trade statistics 2015 -2021
Source: Namibia Statistics AgencyWT/TPR/G/447  • Southern African Customs Union  
- 43 - 
  Industriali zation and Trade (particularly the Investment Policy Division) has  remained with functions 
of investment policies development . Due to the establishment of the NIPDB in 2021 and  other 
factors, the Foreign Investment Act is being reviewed . Meanwhile, Namibia has put on a moratorium 
on the negotiation and signing of new bilateral  investment treaties until such time that the revision 
of the Foreign Investment Act is finali zed. 
5.1.3   Namib ia Industrial Development Agency (NIDA)  
5.5.  NIDA was established in 2018 through the enactment of the Namibia Industrial Development 
Act, 2016 (Act No.  16 of 2016) to  merge the Namibia Development Corporation (NDC) and the 
Offshore Development Corporation (ODC) . NIDA has a mandate to advance Namibia's 
industrialization agenda in line with the country's policies and developmental strategies . NIDA also 
aims to promote private sector driven industrialization by creating conducive investment in orde r to 
enhance local employment and export -oriented economic growth.  
5.1.4   Business and Intellectual Property Authority (BIPA)  
5.6.  BIPA is established in terms of Section 3 of the Business and Intellectual Property Authority 
Act, 2016 (Act No.  8 of 2016), and became t he competent authority which regulates, administers, 
and conducts registration of business and intellectual property rights in Namibia . The Authority has, 
since establishment in 2017, made concerted progress towards developing and enhancing its 
regulatory frameworks, both in the corporate business side and in the area of intellectual property 
right.  
5.7.  Business registration in Namibia is regulated through two (2) major legislations namely the 
Companies Act, 2004 (Act No.  28 of 2004) and the Close Corporations Act, 1988 (Act No.  26 of 
1988) . In 2019, the Ministry of Trade, together with BIPA conducted an assessment on the latter 
laws and pronounced the laws to be outdated and none -responsive to Namibia economic climate . A 
corporate law reform project was put int o motion, with the development of a policy document, that 
aimed to ensure the review and ultimate reform on Namibia's corporate law landscape . However, 
due to the COVID -19 pandemic in the later parts of 2019, the project has not made much progress 
until 20 22. The project is currently at advance stage and is envisioned to submit a draft bill to 
parliament in early 2024 and possibly have the law passed by the end of 2024.  
5.8.  BIPA remains a catalyst for business conduct in Namibia . Although the functions business 
registration was transferred to BIPA from the then Ministry of Trade, the systems remained manual 
and posed various challenges . One major challenge related to BIPA contributions towards the ease 
of doing business (EDB), speci fically as it relates to the number of days it takes to start a business . 
In the World Banks 2020 (and last) report on the EDB, Namibia ranked 104 out of 190 economies . 
The low ranking, specifically on BIPA's contribution, rested on its manual processes fo r registering 
businesses, compared to its neighbo rs. BIPA has since 2021 adopted a new Integrated Business and 
Strategic Plan, in which its primary focus is automation and digital transformation . The Authority 
remains the only competent authority in the co untry to hold verified data on businesses registered, 
types of entities . BIPA's current business register have exceeded 200,000  legal entities.  
5.9.  In terms of Intellectual Property Rights (IPR's), Namibia has made significant progress 
in the area of IPR's ove r the review period . Although Namibia's primary IP law, namely the Industrial 
Property Act, 2012 (Act No.  1 of 2012) was passed in 2012, the Act only came into force on 
1 August  2018, when the Minister of Trade gazette the regulations . This saw the introdu ction of a 
monthly IP Bulletin which publishes all proposed rights to be registered and may be opposed . The 
law also introduced a quasi -judicial body namely, the IP  Tribunal, which was formerly put into 
operation in April  2022.  
5.10.   In addition to the Industria l Property Act, 2012 which registers and grants IP right in the areas 
of trademarks, utility models, patents and industrial designs, BIPA also administers the Copyright 
and Neighboring Rights Protections Act, 1994 (Act No.  6 of 1994) . This Act has also bee n deemed 
outdated and as such a review process was set in motion in 2019 . The amendment of the Copyright 
law is at an advanced stage, as it is currently undergoing constitutional scrutiny before being 
submitted for tabling in the Namibian Parliament.  WT/TPR/G/447  • Southern African Customs Union  
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  5.11.   Namib ia is signatory to and has acceded to a number of international legal instruments . BIPA 
has been duly designated to lead negotiations in the current rounds of the AfCFTA IP Protocol 
negotiations.  
5.2  Tax reforms  
5.12.   Namibia implemented some tax reforms to enhance the resilience of domestic revenue 
generation as well as promoting investment and revenue to support the successful implementation 
of the fiscal consolidation program and support higher and inclusive growth . Below are the tax 
reforms implemented during the  trade policy review period:  
5.2.1   Integrated Tax Administration System (ITAS)  
5.13.   An Integrated Tax Administration System (ITAS) was rolled out in 2020, its overall objectives 
are to improve service delivery to taxpayers . The system provides many online benefits su ch as 
24/7 real -time access to a taxpayer tax account, taxpayer self -service facility, online filing and tax 
returns submission, single view of taxpayer's account and, accelerated processing of tax forms which 
real-time notification on outcome . The system is convenient, user friendly and cost -effective.  
5.2.2   Export levy 
5.14.   Namibia implemented an export levy by imposing an export levy on certain goods in order to 
improve Namibia's value share in its resource base, to encourage further processing or beneficiation 
of or value addition to such goods, to support national or regional industrial development, to promote 
the development of regional value chains to meet revenue needs ; and to provide for incidental 
matters.  
5.15.   Export levy is charged on exportation of minerals, fo restry products, fish products, indigenous 
plants, animal hides and skins as well as live animals and animal products . Tariff rates are contained 
and listed in the Export Levy Act, 2016.  
5.16.   The coverage of the export levy was expanded to include other specifi c agricultural, forestry 
and game products and other mining products currently not covered by the export levy regime . As 
such, the export levy for dimension stones was increased from the current 2 % to 15% and an export 
levy of 15 % for timber was introduced.  
5.2.3   Environmental levy 
5.17.   Namibia introduced the Environmental Levy in 2016 to steer the country towards a green 
economy and the sustainable exploitation of its natural resources and equally to increase the benefits 
of the exploitation  of natural resources to the population as well as preserving the environment . 
Ultimately the goal is to ensure that Namibia sustainably manages its environment while making 
reasonable revenue from it.  
5.18.   The introduction of environmental levies is an importa nt strategic focus in line with Namibia's 
fifth National Developmental Plan implementation.  
5.19.   Revenue generated through environmental levies is ploughed into National Waste 
Management and recycling, biodiversity, and ecosystem management and ultimately the r eduction 
of carbon emission to the atmosphere by industry and automobiles . Environmental levy is charged 
at importation of plastic carrier bags, disposable batteries, car and truck batteries, electric filament 
lamps, new, used or retreaded pneumatic tyres and second -hand vehicles.  
5.20.   New Environmental Levy items are introduced under Schedule 1 to Customs and Excise Act, 
1998 (Act No.  20 of 1998) on the importation of Lubricant oils, Plastic carrier bags and disposable 
batteries including car/truck batteries . These levies are as follows:  
a) a levy on Lubricant oil of NAD  1.80 per litre ; and 
b) an environmental levy of 5 % of the cost of battery cells. WT/TPR/G/447  • Southern African Customs Union  
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  5.2.4   Phasing out of the base -eroding tax exemptions  
5.21.   Income Tax of 24, 1981 was amended, by removing provisions of benefits for EPZ to phase 
out the current tax incentive for manufacturers and exporters of manufactured goods (as explained 
above under manu facturing).  
6  NAMIBIA BOARD OF TRADE  
6.1.  In the last Trade Policy Review report, it was reported that Namibia was busy developing her 
Board of Trade . However, due to some challenges Namibia has not yet managed to establish the 
Board of Trade (Trade Management Co mmission) . Namibia is currently busy with the Trade 
Management Bill that will create the establishment of the Board of Trade as well busy developing 
the legislative framework towards the establishment of the Board of Trade . Establishment of the 
Namibia Boa rd of Trade is envisaged to provide for the administration and management of 
international trade, investigation of tariffs, safeguards, anti -dumping and countervailing duties, and 
import and export procedures in relations to SACU Agreement and management o f international 
trade.  
7  TRADE IN SERVICES  
7.1.  Trade in services and the service sectors in general are important economic activities to the 
Namibian economy . They are the fastest growing components of the Gross Domestic Product (GDP) 
and the largest component o f foreign -direct investment in Namibia . Namibia 's involvement in Trade 
negotiations is always guided by WTO (GATS) . Furthermore, Namibia has participated in negotiations 
of Trade in services at the level of SADC and AfCFTA.  
7.2.  At SADC level, the first round covered negotiations in the following service sectors : 
communication, construction, energy -related, financial, tourism and transport . After the adoption of 
Member States' Lists of Commitments in the first round, the SADC Committee of Ministers of Trade 
(CMT), at their 32nd meeting held in July 2021, adopted the Negotiating and Scheduling Guidelines 
for the Second of Round Negotiations . The second round of negotiations will cover all the remaining 
services sectors, namely business, distribution, educational, environmental, health, recreational, 
cultural and sporting services, and other services not included elsewhere as per W120 Classification 
list. 
7.3.  At AfCFTA level, Namibia is amongst State Parties whose Schedule of Specific Commitments 
on the pri ority sectors where adopted . These are business, communication, financial, tourism and 
transport services . Namibia is now expected to prepare trading under the Secretariat Guided Trade 
Initiative (GTI) for local companies to benefit under the GTI . The seco nd round is still to commence.  
8  TRADE FACILITATION  
8.1.  Implementation of WTO Trade Facilitation Agreement  
8.2.  Namibia is in the process of revitalizing its National Trade Facilitation Committee (NTFC) which 
was established in 2018 as the Trade Facilitation negotiat ing structure at the time, through reviewing 
and adopting the ToRs for the NTFC . The revised NTFC ToRs makes a provision for the establishment 
of a 3 -tier governance structure (Secretariat, Technical and Steering), revised composition for the 
NTFC Secretar iat, and development of a Communications Strategy.  
8.3.  Once revitalized and strengthened, the NTFC will be in better position to effectively monitor the 
progress in implementation of the WTO Trade facilitation through the online tool "Reformer Tracker" 
impleme nted by UNCTAD.  
8.4.  Currently, Namibia Revenue Agency serves as Chair of the NTFC while the Namibia Trade Forum 
under the auspices of the Ministry of Industrialization and Trade serves as Secretariat of the 
Committee . The Terms of Reference for guiding the Sec retariat have since been developed and 
forwarded to UNCTAD for guidance.  
8.5.  Regarding the notification of Category B and C commitments under the WTO Trade Facilitation 
Agreement, Namibia has notified the WTO Committee on Trade Facilitation in February  2023 in  WT/TPR/G/447  • Southern African Customs Union  
- 46 - 
  accordance with Article  17 and Article  19 of the WTO Trade Facilitation Agreement . Namibia notified 
shifting Category B provisions to Category C.  
8.1  Advance  ruling program me 
8.6.  Namibia Revenue Agency (NamRA) step into the right direction by advancing with the 
implementation of advance rulings as their obligation towards the fulfillment of their international 
commitment of WTO Trade Facilitation Agreement (TFA).  
8.7.  Article  3 of TFA encourages member States to reduce time and cost of doing business across 
the borders  of any country in international trade, whilst Standard 9.9 Revised Kyoto Convention sets 
the standards for and simplification and harmoni zation of customs procedures, processes, and fees . 
Therefore, NamRA's drive and mandate to cultivate the reforms, impr ove on quality service, enhance 
efficiency, and improve on revenue collection as well as adapting processes & system to meet best 
international standards.  
8.8.  To foster such an enabling business environment, NamRA as part of its ongoing efforts to 
facilitate t rade and support economic operators developed a system of advance rulings that can is 
utilized by importers, exporters, or any other interested persons.  
8.9.  Advance rulings cover three areas, namely, Customs Classification, Valuation and Origin. 
(1) Advance ru lings for classification provide information on the applicable commodity code and the 
rate of tariff duty on imported goods, (2)  Advance rulings on valuation provide information on 
specific matters relating to the assessment of the Customs value of importe d goods and (3)  Advance 
rulings on origin provide information on whether imported goods are originating from a particular 
country.  
8.10.   Advance ruling system is an international proven trade facilitation tool for both traders and 
Customs administrations that enhance certainty and predictably of Customs operations . Traders can 
obtain precise information in advance of the actual transaction and for analogous future transactions 
for a specified period . Such information is issued in the form o f a ruling, which is binding on the 
authority issuing it as against the applicant . This represents the safest approach for a trader to 
ensure that Customs clearance of the products covered by advance rulings is completed without 
delay and with predictabili ty. 
8.2  One-Stop Border Post with Botswana  
8.11.   Section 6A of the Customs and Excise Act 20 of 1998 as amended allows for the establishment 
of a One -Stop Border Post (OSBP) between Namibia and other SACU member States adjoining border 
countries . To date Namibia signed the OSBP Agreement with Botswana in 2022, the actual 
implementation of the OSBP is still pending . Once operational all clearances will be carried out on 
either the Namibian or Botswana side . 
8.3  Namibia  national single window environment  
8.12.   Namibia has embarked upon the establishment of a National Single Window with the aim to 
enable parties involved in trade and transport to lodge standardized information and documents with 
a single -entry point to fulfil l all import, export and transit relat ed regulatory requirements . Efforts 
on the establishment of National Single Window are ongoing.  
9  TRADE POLICY FRAMEWORK  
9.1.  Namibia has started to develop its National Trade Policy Framework, which is currently at the 
final stage . The trade policy framework is developed in order to guide Namibia's trade relations with 
the rest of the world in engagements on trade in goods and services related matters at bilateral, 
regional, and multilateral level . The National Policy Framework is formulated within the scope of t he 
country's long -term national development aspiring to take Namibia into a developed country status.  
9.2.  Since independence in 1990, Namibia's trade -related interactions with the rest of the world has 
made references to a myriad of national trade -related laws  and regulations administered by various 
Ministries and government agencies ; obligations and commitments related to the country's WT/TPR/G/447  • Southern African Customs Union  
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  membership in the Southern African Customs Union (SACU), the World Trade Organi zation (WTO), 
and other bilateral trading arrangements.  
9.3.  The overall objective of Namibia's trade policy is to contribute towards Namibia's economic 
diversification by promoting and stimulating a competitive trade sector to increase exports of goods 
and services.  
10  NATIONAL DEVELOPMENT PLAN A ND VIS ION 2030  
10.1.   Namibia Vision 2030 is designed as a broad unifying vision which would serve to guide the 
country's Five -year Development Plans from NDP1 through to NDP6 and at the same time, provide 
direction to government ministries/offices and agencies, private sector, NGOs, civil societies, 
regional and local government authorities . 
10.2.   Namibia developed a short -term plan namely, Harambee Prosperity Plan (HPP) 1 in 2016 in 
order to complement the National Development Plans and Vision 2030 . The HPP was a focu sed and 
targeted approach to achieve high impact in defined priority areas.  
10.3.   To date, Namibia has developed the 5th National Development Plan (NDP5), which was 
implemented from the financial year 2017/18 up until 2021/22 . This is the 5th series of a total o f six 
(6) NDPs that are aimed to implement and achieve the objectives and aspirations of Namibia's 
long-term Vision 2030 . Efforts will be underway in the financial year 2023/24 to review the NDP5 
(which is currently extended for 2 years) to enable completi on of its programmes and projects . The 
review of NDP5 will supplement the findings and recommendations of the Vision 2030 review, in 
documenting its achievements, challenges, and recommendations across thematic areas and sectors 
for future consideration.  
10.4.   Cabinet directed for NDP6 to be developed covering the period 2025/26 to 2030/31 financial 
years and for HPP II programmes and projects to be accelerated.  
11  TRADE AGREEMENTS  
11.1  International and regional trade arrangements  
11.1.   Being an open economy, Namibia attaches  great importance on trade, both at regional and 
global levels, as a means of securing and enhancing export markets and to foster strong regional 
international economic cooperation . Namibia continues to be a signatory to a number of regional 
and internatio nal trade agreements . These include the Southern African Customs Union (SACU), the 
Southern African Development Community (SADC), SACU -MERCOSUR, SADC -EU-EPA, SACU 
Mozambique -UK EPA, SACU -EFTA FTA etc.  
11.2  African Continental Free Trade Area (AfCFTA)  
11.2.   At African Continental level, Namibia  signed the AfCFTA on 2  July 2018 and ratified it on 
25 January  2019. The instrument of ratification has been deposited with the African Union 
Commission on 1 February  2019. Namibia is committed to the full implementation of the AfCFTA, in 
this regard Namibia has launched a National Strategy for Implementation of the AfCFTA which 
provides an opportunity for Namibia to increase its intra -African exports and enhance the country's 
export -led manufacturing and services capabili ties across the African continent.  
11.3  Tripartite Agreement (SADC, EAC, COMESA)  
11.3.   Namibia signed the Tripartite Agreement (SADC -EAC-COMESA) on 10  June 2015 and ratified 
the Tripartite FTA on 29  October  2019. Namibia submitted her Trade in services offers in five  priority 
service sectors such as financial, business, tourism transportation and communication services.  
11.4  Namibia –Zimbabwe Preferential Trade Agreement  
11.4.   Namibia continues to cooperate with Zimbabwe on a Preferential Trade Agreement . This is 
the only prefer ential trade agreement Namibia has at bilateral level which is governed  by rules of WT/TPR/G/447  • Southern African Customs Union  
- 48 - 
  origin and subjected to a  reciprocal duty -free treatment with Zimbabwe . The Agreement was  jointly 
notified by the Parties to the WTO in 2021 in accordance with Article  XXIV of the GATT.  
11.5  Africa Growth Opportunity Act (AGOA)  
11.5.   Namibia is designated is an eligible Sub - Saharan African country benefiting from the Africa 
Growth Opportunity Act which provides preferential market access into the United State of America 
under a unilat eral trade arrangement . Namibia developed and launched her AGOA utilization strategy 
on 10 May 2021. The aim of the Strategy is to increase Namibian exports to the USA . During the 
period under review Namibia traded under the AGOA arrangement, as a result p roducts were 
exported to the U nited States  market such as beef, charcoal, beer and marble granite.  
11.6  World Trade Organi zation  
11.6.   Namibia has been a Member of the WTO  Agreement  since 1995 . The Permanent Mission of 
Namibian to the WTO in Geneva, continues to coordinate activities related to the WTO matters in 
conjunction with the Ministry of Industriali zation and Trade which is a national focal point on the 
WTO issues.  
11.7  SACUM -UK EPA  
11.7.   The BREXIT necessitated the negotiations of the SACU+ Mozambique -UK Economic 
Partnership Agreement . This Agreement came into force on 31  December  2020, it was transposed 
from the SADC -EU-EPA Agreement in order to ensure that there were no disruptions of trade 
between the SACU countries and UK.  
11.8  SACU -EFTA  
11.8.   One of the benefi ts for Namibia to be Party to the SACU -EFTA is secured market access for 
Namibia's products such as beef, which enjoy reduced customs tariffs for exports to EFTA and for 
other sources of imports . Namibia's goods are treated differently compared to other g oods from 
those countries without a free trade agreement with EFTA . The COVID -19 pandemic has also affected 
the conclusion of the review process of the agreement.  
11.9  SADC -EU-EPA 
11.9.   Namibia is also part of the Economic Partnership Agreement (EPA) between the SADC  EPA 
Group and the European  Union  (EU). This Agreement entered into force fully on 28  February  2018. 
Namibia has been benefiting from this agreement by exporting beef and grapes to the EU.  
11.10.   In order for Namibia to fully implement the SADC -EU EPA, Namibia wi th EU technical support 
launched the National EPA Implementation Plan in 2022 in order to ensure that the potential benefits 
that can accrue from this instrument are fully utili zed by the intended beneficiaries, such as the 
exporters, importers, consumers,  and the entire business fraternity . As a party to the Agreement, 
Namibia also participates in the SADC -EU EPA review process currently underway.  
12  WTO TECHNICAL ASSISTANCE  
12.1.   Namibia continues to benefit from the WTO's technical assistance and training through short 
courses training provided by the WTO . This includes an Advanced Trade Policy Courses (ATPCs) 
regional Intermediate Trade Policy Courses, regional seminars, workshops and training events on 
several trade topics . During the period under review,  Namibia enhanced trade capacity needs for its 
officials on trade -related activities such as those that addressing the specific WTO agreements, 
i.e. on General Agreement on Services, General Agreements on Trade in Goods, the Agreement on 
Sanitary and Phyto sanitary Measures, and the Technical Barriers to Trade Agreement, and other 
issues deal with a range of trade.  
12.2.   To almost a decade now, since 2012 -19, Namibia was not benefiting from the 10months 
internship programme, however in 2020 Namibia commenced takin g part in the internships 
programme, which resulted to four officials benefited from the WTO internship programme during 
2020 to 2023.  WT/TPR/G/447  • Southern African Customs Union  
- 49 - 
  13  CONCLUSION  
13.1.   As Namibia review s the 5th Trade Policy, there are still steps to be taken for Namibia to 
accelerate economic growth, enhance local and foreign direct investment as well implore on 
opportunities to increase value addition of raw materials . The Government is continuing to adopt a 
much more expansionary fiscal and an accommodative monetary policy stance to support e conomic 
activities geared towards the alleviation of poverty.  
13.2.   Namibia continues to maintain its trade relations with trading partners and remain committed 
in support of free and liberal trade at the multilateral trading system.  
 WT/TPR/G/447  • Southern African Customs Union  
- 50 - 
  SOUTH  AFRICA 
1  INTRODUCTION  
1.1.  The fifth Southern African Customs Union Trade Policy Review period (2015 -23) is marked by 
multiple crises, including a steady global economic slowdown, the COVID -19 pandemic, the 
Russia -Ukraine conflict, and increasing climate -related disasters . These global developments have 
deepened the challenges of poverty, unemployment, and inequality that continue to confront 
South  Africa . The challenges reflect in tepid economic growth, continued dependence on volatile 
global markets for South  Africa's mineral production, and general underperformance including in the 
share of value -added production for exports . Increasing evidence of unilateral trade measures that 
have constrained access to important global markets has also mar ked the changed global 
environment.  
1.2.  The SACU Trade Policy Review is an important instrument to reflect developments in the 
economic environment . Accordingly, deepening regional integration has culminated in significant 
reduction in tariff and non -tariff ba rriers.  
1.3.  South  Africa remains convinced that efforts to industrialization, value -added manufacturing, 
increase in exports, and implementation of regional industriali zation through programmes of the 
Southern African Customs Union (SACU), Southern African Dev elopment Community (SADC), and 
the African Continental Free Trade Agreement (AfCFTA) are fundamental to placing our economy on 
a new path of sustainable growth . The central task henceforth will be to ensure inclusive economic 
growth, transformation, and an  increase in employment . This has a number of dimensions but 
requires, among other things, that our industrial policy impact be increased to the point that 
industrial development becomes a key driver of higher levels of growth along a qualitatively differe nt 
new growth path . The elements of "Higher Impact Industrial Policy" include building on and 
expanding the infrastructure development programme, implementing a number of mineral 
beneficiation projects, pursuing active development integration on the Africa n continent, and 
re-positioning South  Africa n manufacturing in a continent that seeks to industrialize.  
2  GLOBAL AND SOUTH  AFRICA 'S ECONOMIC OUTLOOK  
2.1.  The outlook for the global economy has been improving over the last three decades ; marked 
by volatile improve ments for developing countries such as South  Africa.  
Figure 2.1: Global and South  Africa  economic outlook , 2015 -22 
 
Source:  World Bank and South  African Reserve Bank (SARB) . 
3.12.83.4 3.3
2.6
-3.15.9
1.3
0.71.21.5
0.3
-6.34.9
-8-6-4-202468
2015 2016 2017 2018 2019 2020 2021
World GDP growth (Annual %) SA GDP Growth (Annual%)Figure 1 Global and South Africa Economic Outlook (2015 -2022)
Source: World Bank & South African Reserve Bank (SARB).WT/TPR/G/447  • Southern African Customs Union  
- 51 - 
  2.2.  The average global growth between 2015 and 2022 was 2.6 % while South  Africa's economic 
growth was 0.5 % during the period under review . South Africa 's economic growth has been below 
the global economic growth rate since 2015 supporting the widely held view that South  Africa 's 
export s have grown at a much slower pace than the rest of the world . Additionally, South  Africa  has 
underperformed against the middle income and some sub -Saharan comparators . Following the 
COVID -19 pandemic in 2020, South  Africa 's real GDP growth contracted 6.3 % from real GDP growth 
of 0.3 % in 2019 . In the same tune, World Real GDP growth slides by 3.1 %. While COVID -19 
contributed to the sharp decline of South  Africa 's real GDP in 2020, social unrest and contraction in 
manufacturing and mining output became significant factors in the waning real GDP.  
2.3.  The effect of the COVID -19 pandemic, coupled with continued inadequate electricity supply, 
reduced the potential for econom ic growth in South  Africa , consequently undermining 
industriali zation programmes to contribute meaningfully to employment creation, poverty 
alleviation, and resolving inequalities.  
3  SOUTH  AFRICA 'S TRADE PERFORMANCE  
3.1.  South  Africa 's exports have lagged behind relative to exports from the rest of the world (some 
developing and developed countries) over recent decades, and this has likely constrained overall 
economic growth . There are multiple reasons for this trade performance, including the structure of 
the cou ntry's export basket (which remains dominated by commodity products), its dependence on 
a limited number of large but mature export markets, and the high cost and deteriorating 
competitiveness of the general business environment . South Africa 's manufacturi ng trade with the 
rest of Africa is considerably increasing owing to the country's important role as a logistics and 
services hub in the region.  
Figure 3.1: Global and South Africa economic outlook, 2015 -22 
 
Source:  World Bank . 
3.2.  South  Africa 's trade openness appears to track GDP growth as indicated in Figure 2 above . 
South Africa  recorded economic growth of less than 1.2 % from 2015 up until 2018 . In 2019, 
South  Africa 's economy contracted by 6.3 %. Trade openness proved to be an important factor for 
South  Africa  economic trajectory . South Africa  remained open during the COVID -19 period 
particularly to the importation of pharmaceutical products . Export expansion contributed to GDP, 
while moderate economic g rowth drew in increased imports . South Africa 's future growth is therefore 
likely to be influenced by its ability to access inputs at competitive prices and its ability to expand 
its exports in new and existing markets.  
2015 2016 2017 2018 2019 2020
Trade Openness 55.9 53.5 54.6 54.1 50.8 56.2
GDP Growth (%) 0.7 1.2 1.5 0.3 -6.3 4.9-8-6-4-20246
48495051525354555657
Trade Openness GDP Growth (%)Figure 2 Global and South Africa Economic Outlook (2015 -2022)
Source: World Bank
Trade Openness
%for economic growthWT/TPR/G/447  • Southern African Customs Union  
- 52 - 
  4  SOUTH  AFRICA 'S TRADE WITH THE REST O F THE WORLD  
4.1.  There is significant trade between South  Africa  and the rest of the world. In particular with the 
European  Union  bloc, the BRICS countries combined, the United  States  of America, the 
United  Kingdom and several countries in the Middle East . In Africa, Botswana, Namibia and Nigeria 
are important trade partners.  
Figure 4.1: Trade with the EU, BRICS, Unite d States  and UK for 2021  
(ZAR billion ) 
 
Source:  The DTIC.  
4.2.  The European  Union  (EU) is South  Africa 's largest trading partner accounting for 22 % 
(ZAR 687 billion) of the total trade in 2021 . This is followed by the United  States  of America and 
United  Kingdom with the following trade values of ZAR 290 billion and ZAR 149 billion respectively . 
Trade with these countries is supported by the preferential access to the EU, US and UK markets via 
the EU -SADC EPA, AGOA, and UK -SACUM EPA respectively . The total  trade between South  Africa  
and BRICS countries totalled R  667 billion with exports accounting for 41 % and 59 % accorded to 
imports.  
5  SOUTH  AFRICA 'S TRADE WITH THE REST OF AFRICA  
5.1.  African integration remains important for African countries to overcome the lim its of small and 
fragmented economies.  
R290
R149R687 R667
R0R100R200R300R400R500R600R700R800
United States UK EU BRICSFigure 3 : SA Trade with the EU, BRICS, USA and UK for 2021 (Billion Rands)
Source: the dtic.WT/TPR/G/447  • Southern African Customs Union  
- 53 - 
  Figure 5.1: South Africa 's trade with Africa  
(%) 
 
Source:  World Bank . 
5.2.  For the period 2018 to 2020, intra -Africa exports stood at 16.3 %. African markets were vital 
to African exporters, and the majority of the products were value -added manufactured products . In 
terms of South  Africa 's total global exports between 2018 and 2020, 25.5 % went to Africa . 
South Africa 's exports to Africa consisted of 64.3 % manufactured produc ts, in comparison to 43.9 % 
in its global export basket . This was mainly value -adding trade, not commodities . Because of its 
huge percent age of oil imports, SA's trade balance with Africa – excluding the SADC – fluctuated 
between surplus and deficit.  
6  NATION AL DEVELOPMENT PLAN  
6.1.  The National Development Plan (NDP) spells out a vision of South  Africa  for 2030, characterized 
by higher levels of inclusive economic growth capable of reducing the triple scourges of 
unemployment, poverty, and inequality . The NDP is a  national vision, where all stakeholders broadly 
share a government plan and is key in the transformation of the South  Africa n economy . To reach 
this vision, the NDP sets long -term targets for investment, growth, and employment creation, and 
provides a holistic plan for reaching these targets, drawing on other policies and programmes . Core 
themes in these strategies have been an accent on infrastructure both to support growth and bring 
about greater equality, the need for sector strategies to encourage diversification of the economy 
into more employment -friendly sectors, the imperative of improving basic education and skills 
development, and the recognition that African development is critical for South  Africa 's own growth.  
7  POLICY DEVELOPMENT A ND RESPONSE  
7.1  Economic reconstruction and recovery plan  
7.1.  Against the challenges that emanated from the COVID -19 pandemic, South  Africa  introduced 
the Economic Reconstruction and Recovery Plan (2020) for the purposes of stimulating equitable 
and inclusive econ omic growth . The outbreak of COVID -19 pandemic found a vulnerable 
South  Africa . At the time COVID -19 pandemic reached South  Africa , the economy has experienced 
two consecutive quarters of recession as well as long -standing structural inequalities, unemploy ment 
and poverty.  
7.2.  Fundamentally, consensus amongst social partners is that generating growth and inclusive 
development, within the context of the South  Africa n historical trajectory, requires an exceptional 
form of state – a capable state . A capable state is an important enabling factor without which the 
13.3
7.610.125.5
1118.5
051015202530
Africa's share (%) to SA exports Africa's share (%) to SA imports Africa's share (%) to SA total trade
2004-2006 2018-2020Figure 3: South Africa's (SA) Trade with Africa
Source: World Bank.WT/TPR/G/447  • Southern African Customs Union  
- 54 - 
  Economic Reconstruction and Recovery Plan will not achieve South  Africa 's determination to revive 
the economy.  
7.3.  The South  Africa n Economic Reconstruction and Recovery Plan has three phases namely:  
• Engage and  preserve, which includes a comprehensive health response to save lives 
and curb the spread of the COVID -19 pandemic;  
• Recovery and reform, which includes interventions to restore the economy, while 
controlling the health risks ; and 
• Reconstruction and transformation that entails building a sustainable, resilient, and 
inclusive economy.  
7.4.  The South  Africa n Economic Reconstruction and Recovery Plan prioritizes (i)  aggressive 
infrastructure investment, (ii)  industriali zation and investment  promotion, (iii)  resolving the energy 
crisis, (iv)  supporting tourism growth, (v)  ensuring inclusive growth in terms of gender equality 
including woman and youth participation, (vi)  food security and (vii)  massive employment 
interventions.  
7.5.  Institutional a rrangements for the implementation of the Plan are put in place including 
monitoring the implementation of programmes identified in the Plan. The social compact aspect and 
the associated mobili zation of resources are aimed at ensuring that there is cooperation and 
collaboration toward s growing the economy, protecting the poor and vulnerable, transforming the 
patterns of ownership in the economy, and enhancing competitiveness.  
7.2  Re-imagined industrial strategy and master plans approach  
7.6.  Since 2019, South  Africa  instituted its Re -Imagined Industrial Strategy as a significant step 
forward in scaling up its efforts to promote long -term industriali zation and industrial diversification 
beyond its current reliance on traditional commodities and non -tradable ser vices. It contributes to 
the structural changes needed by expanding production in value -added sectors with high 
employment and growth multipliers . The Re -Imagined Industrial Strategy accordingly places 
emphasis on more labour -absorbing production and servi ces sectors, on increased participation of 
historically disadvantaged people and regions in the economy and aims to facilitate, in the medium 
term, South  Africa 's contribution to industrial development in the African region.  
7.7.  The RIS re-emphasi zes the role of the state in changing the growth trajectory of the 
South  Africa n economy by supporting improved industrial performance, dynamism, and 
competitiveness . Therefore, the focus is on encouraging the upgrading of value -added, 
labour -absorbing industrial produ ction and diversifying the economy away from an over -reliance on 
commodities and non -tradable services.  
7.8.  A key pillar of the RIS is the development of Masterplans and central to these Masterplans is 
the strong social compact between government, industry and  organi zed labour, where each social 
partner commits to implement concrete interventions to transform and build the economy . Focused 
programs that include ongoing work on sectoral master plans to address competitiveness challenges, 
with an emphasis on localisation and beneficiation, together inform South  Africa 's trade policy . These 
efforts are essential to foster a more dynamic and inclusive economy that creates new opportunities 
for small businesses, women, and youth to participate as workers and entr epreneurs in the economy.  
7.9.  Masterplans outline the long -term vision, including the respective strategic pillars and 
objectives, of the various sectors . The sectors with Masterplans are agriculture, agro -processing, 
aerospace and defence, digital economy, fo restry, health economy, oceans economy, renewable 
energy, tourism, automotive, furniture, steel, sugar, poultry, retail clothing, textile leather, and 
footwear . The RIS and its associated Masterplans aim to expand industrial output, save jobs and 
increase the level of employment in South  Africa . A collaborative approach and strong partnerships 
between SMMEs and large firms will revitali ze the economy and lead to effective re -industriali zation.  
7.3  Trade policy and strategic framework  
7.10.   The South  Africa n governmen t, through the DTIC, pursues a strategic approach to trade 
policy, primarily geared to supporting South  Africa 's industrial development, employment growth, WT/TPR/G/447  • Southern African Customs Union  
- 55 - 
  and economic growth . The policy is part of a broader strategy to accelerate growth along a path that  
generates decent jobs and reduces the poverty and the extreme inequalities that characterize our 
society and economy . As such, trade policy supports the objectives and program mes to diversify 
and upgrade industrial production for sustained and inclusive e conomic growth.  
7.11.   The Trade Policy and Strategy Framework (TPSF) was finali zed in 2010 and revised in 2012 ; 
on both occasions, Cabinet approved it . The TPSF sets out how trade policy can contribute to 
government's economic development objectives . It seeks to improve South Africa 's trade 
performance by increasing exports of higher value -added manufactured goods.  
7.12.   In 2021, a trade policy statement was released, "Trade Policy for industrial development and 
employment growth ". The Statement frames South Africa 's trade policy and its international trade 
engagements on S outh Africa's industrial policy objectives . It speaks to building industrial capacity, 
unlocking development across the Africa Continent, driving manufacturing exports and opening 
markets f or South African  goods, enhancing S outh Africa's role at the WTO and the future of the 
multilateral trading system (MTS) for resilience and building back better for the digital economy and 
for environmental sustainability. (See attached Minister of Trade, Industry and Competition : Trade 
Policy Statement (Annex  1)). 
7.13.   In its engagements with the rest of Africa, South Africa  has worked to advance continental 
economic integration and industriali zation. The priority is to focus on African development, 
industriali zation, and integration . South Africa pursues developmental integration in SACU, SADC, 
T-FTA, and the AfCFTA . This approach, in contrast with the traditional linear integration model, 
combines market integration, industriali zation and regional value chains , and infrastructure 
development.  
7.14.   Multilaterally, South Africa  adopts a developmental approach that seeks to address existing 
imbalances in the rules ; secure policy space to pursue industriali zation, and ensure new challenges 
(e.g. pandemic, environment, a nd climate change) are addressed on the basis of fairness and equity . 
South Africa continues to advance a development outcome to the WTO's Doha Round.  
7.15.   Trade and investment relations with industriali zed economies are also an important aspect of 
our trade policy . Work to build industrial complementarities with the objective of shifting the 
structure of trade with dynamic economies of the South is ongoing e.g.  with the BRICS countries.  
7.4  Tariff policy approach  
7.16.   South  Africa  sees tariffs as instruments of industrial policy, an orientation that calls for 
developmental tariff setting : tariff setting must support industrial and employment objectives . This 
approach implies that tariff setting represents a purposeful intervention and a strategic approach to 
tariff policy to build production capabilities, investment in human capital, research and innovation & 
technology and support industrial and employment objectives . An evidence -based, case -by-case 
assessment informs changes to tariffs (i.e.  no a priori position ). The full range of trade policy tools 
and trade defence measures are utili zed to promote industrial development : import duties, rebates 
and draw-back of duties ; anti-dumping duties, countervailing duties, and safeguards ; and import 
and export control . The International Trade Administration Commission (ITAC) plays a pivotal role 
in tariff investigations and trade remedies.  
7.17.   South  African tariff policy has exerted a major influence on the composition and aggregate 
growth of trade . In the early 1990s, South  Africa's average tariff was around 23 %. It currently 
stands at 8.2 %. The SACU Tariff Book as of January  2023 contained a total number of 
8445 tariff lines, with 4545 lines (54 %) duty 'free' . There has also been considerable simplification 
of the tariff regi me. In 1990, the tariff schedule consisted of 13609 tariff lines of which 28 % were 
subject to import control . By 2006, import controls were eliminated . The South  Africa -EU TDCA, the 
SADC -Trade Protocol and the SACU -EFTA FTA have further reduced the overall incidence of tariff 
protection . The South  Africa n economy is now moderately protected by tariffs as indicated in 
Figure 5 below.  WT/TPR/G/447  • Southern African Customs Union  
- 56 - 
  Figure 7.1: Tariff statistics , 2023  
 
Source:  WTO. 
8  CONCLUSION  
8.1.  South  Africa supports the MTS as it provides a rules -based approach and ensure predictability 
that enables economic operators to plan their business operations in the global arena . Continued 
participation in the MTS will contribute to South  Africa 's economic growth  and thereby contribute to 
positive structural changes in the economy.  
8.2.  South  Africa  remains convinced that efforts to industriali zation, increase in manufacturing 
value -added products, increased exports and implementation of regional industriali zation through 
the programmes of SACU, SADC and the AfCFTA is fundamental to placing our economy on a new 
path of sustainable growth . The central task henceforth will be to ensure inclusive economic growth, 
transformation and increased employment . This has a number of dimensions but requires, among 
other factors, that our industrial policy impact be increased to the point that industrial development 
becomes a key driver of higher levels of growth along a qualitatively different new growth path . The 
eleme nts of "Higher Impact Industrial Policy" include building on and expanding the infrastructure 
development programme, implementing a number of mineral beneficiation projects, pursuing active 
development integration on the African continent, and re -positioni ng South  Africa n manufacturing 
in a continent that is itself seeking to industrialize.  
 
39
15.6
9 8.87.6 7.812.4
5.66.3
051015202530354045
Agriculture Non-Agriculture Total
Final Bound Simple MFN applied average Trade Weighted MFN averageFigure 5: Tariff statistics 2023
Source: WTO.WT/TPR/G/447  • Southern African Customs Union  
- 57 - 
  ANNEX 1 – SOUTH  AFRICA  TRADE POLICY STATEMENT  
Trade policy for industrial development and employment growth , 20 May 2021 
The context of trade policy  
1.1. The South African  government, through the DTIC, pursues a strategic approach to trade 
policy, primarily geared to supporting SA industrial development and employment growth . The policy 
is part of a broader strategy to accelerate growth along a path that gen erates decent jobs and 
reduces the poverty and the extreme inequalities that characterize our society and economy . As 
such, trade policy is informed by, and must support, the objectives and programs to diversify and 
upgrade industrial production for sustai ned and inclusive economic growth.  
1.2. South  Africa 's level of unemployment, poverty and inequalities define the overall context 
within which economic policy – including trade – are conducted . The context is severe : by various 
measures, S outh Africa is among t he most unequal countries in the world ; the expanded definition 
of unemployment (including discouraged job seekers) was at 42.6% in the 4th quarter of 2020, and 
more than 50 % of SA citizens live in poverty . Prior to the COVID -19 pandemic, the real 
unemployment level was over 30 %. This has grown significantly as a result of the pandemic . Even 
during the Great Depression, industriali zed economies did not experience this level of 
unemployment.  
1.3. Fragile and uneven global trade growth since the 2008 finan cial crisis, largely due to 
persistently weak global demand, gave way to a precipitous fall in trade in the wake of the COVID -19 
pandemic in 2020 . The ensuing global public health and humanitarian crisis exposed vulnerabilities 
associated with an over -dependence  on fragile global supply chains for therapeutics, diagnostics, 
PPEs, medicines and even food imports . Global policy -making has, in response, increasingly focused 
attention on rebalancing (shortening) global supply chains and addressing trade rules t hat inhibit 
efforts to strengthen national and regional manufacturing capacity.  
1.4. In fashioning the economic recovery, we need to avoid a return to the "crisis before the crisis" 
and to build back better, including by restoring a more appropriate and sustain able balance between 
the objectives of trade growth and national industrial development . COVID -19 has also highlighted 
the need for more resilient production systems and a degree of "strategic autonomy" in the 
international production and trading system so  that countries have the policy space to diversify their 
economies and add domestic value to production and exports.  
1.5. This Statement frames South Africa  trade policy and its international trade engagements on 
South Africa 's industrial policy objectives . The next two sections in turn outline prominent features 
of South Africa 's trade structure that inform the approach to trade matters in key priority 
engagements, and then highlight the importance of ensuring that trade policy benefits workers, 
women and commu nities . Subsequent sections consider South Africa 's approach to trade in respect 
to African integration, bilateral engagements and the multilateral trading system . The final sections 
set out S outh Africa 's broad policy approach to the trade aspects of thre e issues that are high on 
the international policy -making agenda : Boosting vaccine production to address the COVID -19 
pandemic, digitisation and environmental sustainability.  
A trade policy to build industrial capacity  
1.6. Economic development requires the exp ansion and diversification of the industrial sector, 
which is still the main catalyst of productivity growth, rising wages, innovation and a key driver for 
service sector expansion . For this transformative process, capital goods need to be acquired and 
production must occur on sufficient scale, making trade a necessity . While imports can lower input 
costs and provide access to a range of products, trade is double -edged, as durable improvements of 
living standards require that domestic production and markets  expand as well . These complexities 
require a carefully calibrated, balanced and strategic approach to trade.  
1.7. South Africa is a comparatively small and open economy, accounting for 0.53 % of world 
merchandise trade and approximately 0.28 % of world services trade . International trade in goods WT/TPR/G/447  • Southern African Customs Union  
- 58 - 
  and services is 60.4 % as a percentage  of GDP . Import growth tends to outstrip exports, resulting in 
a persistent deficit in goods trade . This was particularly evident in the period from 2000 to 2008 
when South Africa enjoyed strong GDP growth . Since 2009, growth in S outh Africa has been subdued 
and while the trade balance has fluctuated year -on-year, trade in manufactured products is 
consistently in deficit.  
1.8. While S outh Africa recorded its biggest trade  surplus on record in 2020, largely off a sharp 
reduction in imports due to the economic downturn, the longer -term trend line must be reversed . 
In 2019, South Africa  imported a significantly higher proportion of goods, measured as a  percentage  
of GDP, than  many other economies . While South Africa 's imports accounted for 25 % of GDP, Brazil 
stood at 9,6 %, the U nited States at 12%, the EU at 14 %, the Russian  Federation  and China at about 
14,4% and India at just under 17 %. 
1.9. High levels of manufactured imports an d a comparatively high import -propensity underscore 
not only the lack of diversified domestic production but also, if given appropriate focus and support, 
the possibilities for domestic industrial expansion . The Re -imagined Industrial Strategy encourages 
upgrading value -added, labour -absorbing industrial production and diversifying the economy away 
from an over -reliance on commodities and non -tradable services . Focused programs that include 
ongoing work on sectoral master plans to address competitiveness ch allenges, with the emphasis 
on localisation and beneficiation, together inform South Africa 's trade policy . These efforts are 
essential to foster a more dynamic and inclusive economy that creates new opportunities for small 
business, women and youth to participate as workers and entrepreneurs in the economy.  
1.10.  As tariffs are a key instrument of industrial policy and because they have implications for 
capital accumulation, technology change, productivity growth and employment, changes to the tariff 
regime n eed to be carefully calibrated to the specificities of each sector . While there is no a priori 
position on the appropriate levels of duties, decisions on applications for tariff adjustments or rebates 
are determined on the basis of case -by-case, detailed i nvestigation and analysis . Decisions may be 
accompanied by requirements for reciprocal commitments from applicants and firms that benefit 
from rebates or tariff adjustments . These may, for example, require undertakings to increase 
investment and jobs, intr oduce skills development programs or other productivity enhancements, 
and to ensure price stability in the domestic market . In short, tariff support should not blunt 
competitive pressures on firms.  
1.11.  While trade can contribute to growing the domestic industr y and create jobs, fair competition 
must be maintained between domestic and foreign producers . South Africa will step up efforts to 
ensure that trade defen ce instruments are deployed effectively against unfair and injurious imports . 
In this regard we are r eviewing the applicable legislation to streamline the application and 
investigation processes to enable swift and more effective action . We will also continue to strengthen 
coordination with SARS to eliminate illicit trade and the under -invoicing of import s that cause 
enormous damage to the economy in revenue, lost jobs and industrial capacity . These efforts also 
require stronger collaboration with the relevant authorities of our trading partners . The commitment 
by BRICS countries at the 2019 BRICS Summit D eclaration on cooperation against under -invoicing 
require active follow -up and implementation.  
A trade policy for workers, women and communities  
1.12.  Trade policy must promote and facilitate the development of inclusive economies . South 
Africans  workers should expect that government policy and actions on the trade front should increase 
employment and promote decent work opportunities . Where workers are displaced by trade reform, 
policy should as far as possible seek to put in place measures to better manage adju stment costs 
through more effective safety nets and job (re -) training to enter growing sectors of the economy, 
as well as competitiveness enhancement actions for domestic firms . Employment sensitive sectors 
require a degree of support while reform measure s through master plans (such as for example, 
poultry) are implemented to enhance overall competitiveness and performance . In previous rounds 
of tariff liberalization, the absence of adequate support measures resulted in devastating outcomes 
for many worker s and communities . Many women workers in the clothing industry, for example, lost 
their primary means of livelihood.  
1.13.  Communities expect opportunities for young people, women and rural enterprises to grow and 
find opportunity in local and global markets . Trade policy measures encompass the range of actions WT/TPR/G/447  • Southern African Customs Union  
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  from agreements at the WTO, to the use of trade instruments (decreasing or increasing duties 
applicable) and bilateral efforts to open markets.  
1.14.  The DTIC, will also seek to spell out opportunities for worke rs and communities in the conduct 
and outcomes of trade policy.  
1.15.  For the first time, South Africa is taking the deliberate and necessary step of pursuing a 
gender -sensitive and gender responsive trade policy . Women have been hardest hit by the COVID -19 
pandemic, as a result of long -standing  global structural inequalities pre -dating the crisis . Women 
make up over 50 % of the population in South  Africa  and globally, yet remain the least economically 
active members of society.  
1.16.  Deliberate and targeted measure s that deliver tangible and practical programs for the 
empowerment of women are an essential part of South Africa 's trade policy to creating a better and 
inclusive world . Some of the steps needed include closing the gender gap in access to finance, 
buildin g the export and manufacturing capacity of women -led business, creating market 
opportunities for women -led businesses through linkages to new buyers, and sector strategies to 
promote the emergence of women exporters in traditional and non -traditional secto rs. This will 
include exploring regional value -chain opportunities and digital trade solutions, amongst others.  
1.17.  A gender -sensitive and responsive policy will need to carefully consider the distributive impact 
of South Africa 's trade and economic policies o n women and must nurture and protect sectors with 
large number of women workers and entrepreneurs.  
1.18.  These programs will also inform our engagements in the AfCFTA, in bilateral engagements 
and other strategic platforms . This stance coincides with the start o f the new Decade of Women's 
Financial and Economic Inclusion and gives expression to the UN SGD 5 on Gender Equality . The 
33rd Ordinary Session of the Assembly of Heads of State and Government of the African Union (AU) 
adopted the "New African Women's Deca de" (2020 -30), as the decade of "Women's Financial and 
Economic Inclusion ". 
A trade policy to unlock development across the African continent  
1.19.  South Africa subscribes to the developmental integration approach as elaborated in the 
AU "Agenda  2063: The Africa  We Want ". In this conception, free trade agreements in Africa are part 
of wider efforts to promote cross -border infrastructure development and industrial development 
cooperation . Indeed, constraints to intra -African trade are in many cases narrow producti ve capacity 
and inadequate infrastructure, not tariffs per se . 
1.20.  Industrialization must thus be at the heart of transformation of the African economy . With 
17% of the world's population but just 3 % of world manufacturing, Africa's path to prosperity lies in 
increased levels industrial production and there is some evidence showing that since 1990 
manufacturing employment share has grown in a number of African countries, but with modest 
value -added gr owth. Countries can build on their acquired manufacturing experience to produce for 
markets on the continent as a step towards competing in other international markets in a range of 
industrial sectors . Further, apart from its obvious direct benefits, cross -border infrastructural 
development provides enormous opportunities for African firms to supply a range of industrial inputs 
for construction and maintenance of rail, road and ports.  
1.21.  The launching of the AfCFTA represents a significant milestone in the Afr ica's continental 
integration project . As a first step in stitching together existing integration projects across the 
continent, it will provide greater incentives for new investment to take advantage of a more open 
and integrated continental market . Final tariff reduction commitments with rules of origin that give 
preferences to "Made in Africa" products will boost manufacturing and industrial development in 
Africa.  
1.22.  In this context, South  Africa  will set out the case for rules  of origin that increases the level of 
African value -add. The continent, and South  Africa  as part of it, must avoid the trap of simply 
becoming basic assemblers or finishers of product largely produced elsewhere in the world . This is 
essential to deepen industrial development and with it, growth, investment and good quality jobs.  WT/TPR/G/447  • Southern African Customs Union  
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  1.23.  In preparing for this transformation, the dtic is incorporating an AfCFTA Chapter in sector 
master plans and the district development strategy . In addition, we have begun consultations with 
other African countr ies on the development of cross -border value chains covering a range of 
industries . Dedicated discussions focusing on these sectors are already underway with SACU 
member States and we will expand the discussion with others over time.  
A trade policy to driv e manufacturing exports and open markets for S outh African goods  
1.24.  South Africa 's bilateral engagements are focused on expanding opportunities for higher 
value -added exports and encouraging inward investment to support our industrial policy objectives . 
The details of such engagements depend on the trade and investment profile of the partner country, 
whether the relationship is underpinned by binding or cooperative trade agreements and the 
interests of the partner . In each engagement, South Africa advocates th at our partners increasingly 
view Africa as an investment destination rather than simply a market for exports in light of the 
AfCFTA.  
1.25.  To illustrate the general approach, we take three examples of focus on engagements with key 
trading partners . The EU, as a  block, remains South Africa 's largest trading partner, with the 
SADC -EU EPA underpinning the relationship . Prior to the pandemic, bilateral trade had continued to 
grow but at a declining rate . South Africa  consistently ran a deficit, driven primarily by m anufactured 
imports from the EU . Over the past two years, this has begun to change but the composition of trade 
still needs to shift to greater export by South Africa  or manufactured and other value -added 
products . As part of our ongoing bilateral engagements, including in the upcoming review of the 
SADC -EU EPA, we will seek to expand exports of manufactured goods and higher value -added 
agricultural products.  
1.26.  China is South Africa 's largest single country trading partner and Chinese investment in SA  
has been increasing . Through cooperative efforts we aim to promote inward investment to support 
our industrial development . There is agreement to change the basket of S outh African  exports to 
China, now dominated by minerals, to include a greater portion of higher value -added manufactured 
and agricultural products.  
1.27.  Trade with the U nited S tates has in general been balanced . The U.S. runs a surplus in 
manufactured goods and services, agricultural trade is balanced and  South Africa runs a surplus in 
mineral e xports . While bilateral trade grew significantly in the first decade of the millennium, it has 
declined steadily over the past decade, particularly in South Africa' s value -added exports under 
AGOA . In future engagements with the new U .S. administration, we  will seek to correct this decline . 
Such discussions should also encompass the future of AGOA and removal of barriers to South African  
exports of high value -added products and agriculture.  
1.28.  Opening market opportunities at the product level are also importan t to expand S outh African  
exports . For example, South Africa  is now the world's second largest exporter of citrus but is limited 
in some markets through sanitary and phyto-sanitary measures that South Africa  does not believe 
is justified . More engagement w ith trading partners will be held on products such as fruit (citrus, 
avocadoes,  and others), steel and aluminium, vehicles and beverages.  
A trade policy to enhance South  Africa 's role at the WTO and the future multilateral trade 
system  
1.29.  South Africa supports the principles of a rules -based multilateral trading system where 
independent arbitration rather than power relations resolves disputes . Like many other developing 
countries, however, we have expressed concern at the imbalances and inequities in 
WTO agreement s that prejudice our trade and development interests . These imbalances are evident 
in rules on trade -distorting agricultural support, the selective approach to prohibiting industrial 
subsidies and constraints to technology transfer that can su pport development . South Africa's 
treatment as a developed country during the Uruguay Round (during the Apartheid era) is a source 
of considerable concern as the tariff reduction commitments contributed significantly to 
de-industrialization . This historic injustice has unduly limited South Africa 's policy space to use trade 
to support its industrial development.  WT/TPR/G/447  • Southern African Customs Union  
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  1.30.  These considerations inform South Africa  approach to ongoing discussions on WTO reform . 
We advocate an approach premised on the principles of inclu sivity and development . The keys to 
the legitimacy and sustainability of the WTO lie in its ability to advance developmental interests of 
developing countries that will constitute new sources of global growth and prosperity in the world 
economy . Meeting th is challenge will serve to strengthen the multilateral, rules -based trading 
system, enhance its legitimacy and also create the basis for economic growth from which all WTO 
Members can benefit.  
1.31.  Inclusivity would require, at a minimum, preserving consensus d ecision and the multilateral 
character of the WTO . It would also require recognition of the value of economic and institutional 
diversity, including through reaffirmation of the principles of special and differential treatment and 
the right to regulate in the public interest . African industrialization must be enabled, not inhibited in 
WTO policies . Reform should, in short, enshrine the right of states to pursue national development 
strategies within the broad framework and principles of a rules -based system . 
A trade policy for resilience and to build back better  
1.32.  The COVID -19 pandemic exposed the vulnerabilities of limited industrial capabilities and an 
over-dependence on fragile global supply chains . South Africa , like many other countries, particularly 
in Africa, was unable to access or produce sufficient supplies of essential medical products at the 
start of the pandemic . While the country was able to overcome some constraints through 
extraordinary efforts to repurpose existing capacity and produce medical grade face -masks, hand 
sanitisers, ventilators and more recently vaccines, the lack of preparedness pointed to inadequate 
levels of prior investment in research and development and manufacturing capabilities . For greater 
economic resilience, now and in the  future, South Africa 's trade and industrial policy must focus on 
building more diversified production centres both in South Africa  and across Africa.  
1.33.  The WTO has a vital role to play in addressing the global public health crisis wrought by the 
COVID -19 pandemic . The immediate and urgent challenge is to scale up the production of vaccines 
and to distribute them in an equitable manner to citizens around the world . South Africa  and India, 
with growing support amongst WTO Members, parliamentarians and across  civil society, have 
proposed a temporary waiver on intellectual property rights for certain products required to fight the 
spread of COVID -19 (including vaccines) to ensure that the requisite technology and know -how is 
widely shared in order to boost glob al vaccine production.  
1.34.  In the context of the deadly pandemic, intellectual property should be understood as global 
public goods, particularly in light of the enormous public funding that went into the research and 
development of the vaccines . The discussio n on this matter continues at the WTO . More broadly, we 
have proposed a package of related measures that include deeper levels of cooperation to expand 
production of medical essentials ; new protocols to enhance transparency of contracts and price 
stability  in undertakings between governments and pharmaceutical companies ; a global 
commitment to avoid vaccine nationalism ; and a WTO provision to deal with future pandemics that 
provides automatic rights of use and obviates the need for special arrangements and waivers in 
future.  
A trade policy for the digital economy  
1.35.  South  Africa  is considering how best to respond – in a comprehensive and integrated manner 
– to the challenges and opportunities arising from digital transformation . There are clearly many 
opportuni ties that arise from the application of the new technologies to work and society, including 
new products and services, easier communication and production or distribution efficiencies . At the 
same time, challenges must be addressed, including the persisten t and growing digital divide, the 
impact of digitisation on net employment levels, increasingly concentrated markets and 
anti-competitive practices . In particular, the impact of concentration on smaller businesses can have 
negative distribution effects in society . The resulting high levels of concentration in digital trade also 
severely constrain e -commerce's potential to deliver sustainable and beneficial outcomes for 
developing countries.  
1.36.  In this context, many developing countries have observed that it is  premature to develop WTO 
rules that could have far reaching consequences for development, including the risk of "locking in" 
current imbalances and foreclosing options to address many of the evident challenges . Further WT/TPR/G/447  • Southern African Customs Union  
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  assessment is required on a range of  matters including overcoming the digital divide, the implications 
of customs duties on electronic transmissions on revenue and industrial policy ; the role of data 
management for development ; and technology transfer, amongst others.  
A trade policy for environment sustainability  
1.37.  South Africa is committed to environmental sustainability as part of the overall UN Sustainable 
Development Goals . Meeting these objectives will require significant transformation in patterns of 
global production, consumption and  distribution . The Paris Treaty sets out a coherent framework to 
effect a green transition and reduce greenhouse gas emissions . It requires that advanced economies 
undertake and meet their nationally determined reduction commitments and also provide financ e 
and technology to assist countries with less capability and resources to undertake the needed 
economic transformation.  
1.38.  While there are considerable opportunities for a range of green industriali zation initiatives, 
forging greater coherence between the UN FCCC framework and WTO rules will be essential . 
Multilateral discussions are required on a range of matters including on intellectual property, 
technology transfer, subsidies as well as the application of product standards and labelling to ensure 
that meas ures are mutually supportive and do not unduly shift the burden of adjustment to 
developing countries.  
1.39.  Unilateral trade measures, such as border adjustment taxes on the carbon content on imports, 
could undermine coherence in multilateral climate policy -making. Border taxes that penalize already 
resource and financially constrained economies will make their economic transformation more 
challenging and it would be difficult to justify such measures if they are imposed on countries that 
have taken on – and are  meeting – their national commitments under the UNFCCC . These measures 
also risk a spike in trade frictions and legal challenges.  
1.40.  In order to avoid such outcomes, the contours of such trade measures – how they are 
calculated and how they would comply with WTO rules – need to part of the multilateral dialogue . 
To maintain a coherent multilateral framework to enable climate action, trade measures should be 
carefully calibrated, timed and sequenced with green technology transfer and financing for many 
developi ng countries to effect the green transition . As global public goods, the challenges of 
environmental sustainability and their trade -related aspects need to be addressed multilaterally, 
through international cooperation and dialogue for legitimacy and for sustainability.  
1.41.  A conclusion of negotiations on fishery subsidies at the WTO can contribute to our 
environmental sustainability objectives . The outcome should ensure countries that provide the 
largest subsidies that result in over -capacity and over -fishing undertake significant reduction 
commitments while providing space for developing countries to support artisanal,  subsistence and 
commercial fishing in a sustainable manner.  
Conclusion  
1.42.  Trade policy must support S outh Africa's industrial development obj ectives to drive 
sustainable growth, to generate decent well -paying jobs and to widen economic inclusion, including 
for women and youth . In response to a decade of low growth, growing inequality, unemployment 
and increasing job insecurity, policy making ar ound the world is undergoing a shift with greater 
attention to striking a more appropriate balance between trade and building national industrial 
capabilities.  
1.43.  For South Africa , the imperatives of trade growth and expanding national production 
capabilities  require a carefully calibrated strategic trade policy based on ever -closer collaboration 
and coordination between government, business, labour and communities.  
1.44.  African economic integration, structural transformation and industrialization lie at the heart of 
South Africa's trade policy agenda . African prosperity, growth and development industrialization, 
market integration and cross -border infrastructure development should create a dynamic for greater 
prosperity from which all African economies should benef it. Our engagements beyond the continent 
should support these objectives, both for Africa and South Africa , and should be geared to steadily 
correcting the manufacturing deficit in our international trade profile.  WT/TPR/G/447  • Southern African Customs Union  
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  1.45.  Multilateralism remains vital to address t ransnational challenges . The public health crisis 
brought on by the COVID -19 pandemic and environmental challenges, including climate change, 
underscore the necessity for strengthened multilateral cooperation and dialogue . Global trade policy 
can play an i mportant and positive role in addressing these challenges if it is framed by the principles 
of fairness, equity, inclusivity and development.  
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