Sizwe Dlamini
The Minister of Finance, Neal Rijkenberg has announced a significant downturn in the Southern African Customs Union (SACU) revenue receipts for the 2025/26 fiscal year.
Rijkenberg announced a sharp decline of 20.4%, with projected earnings plummeting to E10.4 billion for the upcoming fiscal year, from E13.06 billion in the current financial year.
Rijkenberg attributed this reduction to lower-than-expected collections within the Common Revenue Sharing Pool (CRP) during the 2023/24 fiscal year.
The Minister highlighted that this shortfall will affect the national budget.
He said the decline was exacerbated by decreased revenues from specific excise duties, particularly those on cigarettes and tobacco products.
Rijkenberg speaking from his office at the Ministry of Finance building, expressed concern over ongoing revenue volatility stemming from fluctuations in collection rates, a trend expected to persist in the medium term, thereby continuing to impact revenue predictability.
In response to the precarious revenue situation, Rijkenberg outlined proactive measures aimed at maintaining fiscal stability. He disclosed the government’s plan to tap into the SACU revenue stabilization fund, established in 2023 with a current balance of E2.47 billion.
The fund was created following parliamentary approval of its regulations and serves as a buffer against revenue fluctuations. Part of these reserves will be deployed in the upcoming 2025/26 budget to stabilize the fiscal outlook amidst uncertain revenue prospects.
The Minister highlighted the government’s commitment to managing economic volatility effectively, ensuring that essential public services and developmental initiatives are not compromised.
As SACU revenue continues to pose challenges, Rijkenberg emphasized the importance of prudent fiscal management and strategic resource allocation to safeguard the kingdom’s financial resilience in the face of economic uncertainties.