Analysing the sustainability of intra-SACU trade in the context of existing infrastructure challenges

Abstract

This dissertation investigates the sustainability of intra-regional trade within the Southern African Customs Union (SACU) amidst persistent infrastructure challenges. Employing a qualitative Systematic Literature Review (SLR) methodology, the study synthesises evidence from 28 peer-reviewed articles, institutional reports, and policy documents published between 2010 and 2025. The research is grounded in classical and contemporary trade theories including comparative advantage, New Trade Theory, and global value chain frameworks to contextualise SACU's trade dynamics. The findings reveal that intra-SACU trade sustainability is critically undermined by three interconnected challenges: severe infrastructure deficits (deteriorating road networks, port congestion, and unreliable energy supplies); pervasive non-tariff barriers (cumbersome customs procedures, regulatory fragmentation, and inconsistent standards); and structural economic asymmetry institutionalised by the SACU Revenue Sharing Formula, which creates fiscal dependency for Botswana, Lesotho, Namibia, and Eswatini (BLNE countries) while entrenching South Africa's dominance. These challenges form vicious cycles: road freight dependency generates excessive carbon emissions, exposing members to carbon border taxes; infrastructure disparities perpetuate inequality; and administrative inefficiencies inflate logistics costs with border delays raising significant costs for operators. Comparative analysis using the Logistics Performance Index, Global Competitiveness Index, and Road Quality Index demonstrates that while SACU outperforms the East African Community regionally, all members except South Africa fall below global benchmarks. The study's key contribution is a phased implementation roadmap addressing these challenges through immediate actions (digitisation, NTB removal), medium-term measures (SME support, regulatory harmonisation), and long-term strategies (regional value chain development, Revenue Sharing Formula reform). The research concludes that sustainable intra-SACU trade requires coordinated investment in both hard and soft infrastructure, genuine political commitment to regional integration, and systemic policy reforms that move the union from fiscal dependency toward productive, equitable, and environmentally sustainable trade.