EU aid to cushion the effects of SA trade deal

The European Union (EU) has given Swaziland an estimated US $1.3 million as part of a regional initiative to help the country deal with the economic impact of a South Africa - EU trade agreement signed earlier this year. Pierre Bide an economist with the EU in Swaziland told IRIN on Wednesday: "The idea is help Swaziland cope with any fall out or effects from the South Africa - EU free trade agreement. We want to help build economic capacity in that country." He said one of the effects would be the loss of revenue derived from trade taxation, which accounts for an estimated 50 percent of total government revenue. "The agreement between South Africa and the EU seeks to liberalise 80 percent of all trade between the two, making all EU goods coming in to South Africa duty free and to some extent much cheaper. This could, and possibly will, see the tax collected by the Swazi government on imported goods decline." He added: "We want to help them move away from tariff-based income to other means of supplementing the national budget." Bide said the EU was also looking at offering a similar kind of package to Botswana, Namibia and Lesotho, which along with Swaziland and South Africa form the Southern African Customs Union (SACU). He said a meeting scheduled for June had been postponed, possibly for some time in September. In a press release last week, the EU Head of Delegation Richard Zink said it is was critical that "Swaziland is able to capitalise on the present and future opportunities as well as mitigate the threats associated with economic globalisation." Zink added: "The project should contribute to further development of the private sector which will in turn lead to job creation for the Swazi people."