The Southern African customs union: A reappraisal

The paper attempts to evaluate, as far as possible quantitatively, the costs and benefits to the countries of the ‘Southern African periphery’ (Botswana, Lesotho and Swaziland) of participation with South Africa in the current customs union agreement. On balancing the agreement's measurable effects (on industrial development, exports, government revenue and the cost of living) against one another, it appears that on sanguine assumptions only, there would be a substantial benefit to Botswana and a much more moderate benefit to Lesotho if the customs union were dismantled and replaced by separately protected national markets. Such a calculation, however, neglects what may be the most important benefit and cost to the ‘peripheral’ countries of leaving the customs union, namely the increase of ‘economic independence’ and the risk of South African retaliation respectively: themes which are explored in the final section.