The Authorised Economic Operator (AEO) is a programme by which the Southern African Customs Union (SACU) aims to enable its member states to grow their economies.
This came to light when Executive Secretary of SACU, Thabo David Khasipe, spoke in consultations with the private sector in Gaborone recently. “The belief is that when we accredit businesses within our member states, we encourage intra-SACU trade,” he said. “Not just intra-SACU trade but even intra-Africa trade.” He noted that African countries trade more with the rest of the world than among themselves. “This is an anomaly that is unique to Africa,” Khasipe noted.
He gave minerals as an example, in particular diamonds, which he said are exported and come back as high value-added consumables. “The idea, especially under the African Continental Free Trade Agreement (AfCTA), is to try and reverse that trend and encourage trade within Africa through boosting export-led growth,” he noted. Khasipe said one way of achieving that is to engage in programmes such as the AEO bcause it ensures that businesses are competitive enough to be able to export to other regions of the continent and the rest of the world.
Until SACU provides seamless trade within member states, he asserted, it is hopeless to think of competing with other trading blocs. “They also have their AEO programmes that they are putting together to ensure that they become competitive and can conquer SACU through the AfCTA with high-quality goods which are priced competitively,” he pointed out.
Khasipe revealed that SACU recently submitted its own tariff offer to other regions of Africa. “This was to say as SACU we want to trade with you and are committed to reducing our tariffs in various identified product lines so that they can trade with us at rates that will over a period of five years be reduced,” he said. Khasipe emphasised that what SACU is doing for businesses through this AEO programme is to give them a leg up when it comes to competing with countries from other regions.
Challenges
He pointed out that for a country to develop economically, it has to have a complex export basket. “For a country to develop, we have to realise that it is not so much about you doing more of the same but about you diversifying export basket,” he said.
“This is what you produce in the country. Also not just producing more, but producing increasingly more complex commodities such as machinery, pharmaceuticals and so on and so forth.” Khasipe said one common feature with African countries, SACU included, is that they lack product diversity and produce simplistic and non-complex goods. “So our export basket is not complex,” he noted. “But the logic is simple – if you produce complex goods, invariably the productivity of your workers will be higher.”
He said this is because the skills requirements to produce something like a computer are higher than those needed to produce a cabbage. “Therefore, workers in a factory producing machinery will invariably be more productive,” he said. “The secret is in unlocking the complexity.” Khasipe stated that Botswana, whose export basket is mainly diamonds, has a challenge in terms of complexity, saying it is through programmes such as AEO that SACU is trying to support industrialisation of member states.
“This AEO programme is one of the many ways to ensure that we give SACU businesses a leg-up so that when they go to compete in the AfCFTA market and the rest of the world, they are more productive,” said Khasipe. He called Botswana businesses to embrace the AEO programme because it is intended to benefit everyone, noting that Botswana currently has three accredited operators under the programme. The Commissioner General of Botswana Unified Revenue Service (BURS), Jeanette Makgolo, noted that the programme is aimed at segregating traders according to their compliance status.
“The AEO is a globlally accepted trade facility programme whose genesis dates as far back as 1999,” she said, adding that the programme promotes custom-to-custom relations. “In line with the set standards and international best practices, BURS continues to collaborate with tax revenue authorities through Memoranda of Understanding on mutual administration assistance and system interfaces of information exchange,” she said. Makgolo stated that BURS is in the process of undertaking an organisational structure realignment exercise with a view to ensuring effective implementation of initiatives like the AEO.
