South Africa: Common Monetary Area 2014/15 Budgets Overview

Last Updated: 16 April 2014
Article by Celia Becker

Most Read Contributor in South Africa, September 2018

Each of the Common Monetary Area (CMA) Member States presented their 2014/15 Budgets during February 2014. An overview of the Budgets of Lesotho, Namibia and Swaziland reveals Namibia as the only country proposing fiscal amendments of any significance. A common theme of these Budgets is a concern about the increased uncertainty regarding the future of the South African Customs Union (SACU) and a firm intention to reduce reliance on SACU revenue.


The Minister of Finance, Dr Leketekete Victor Ketso, presented the 2014/15 Budget on 20 February 2014.

Government expenditure for 2014/15 is estimated at M15.4 billion (a 7.6% increase from the 2013/14 Budget), of which M10.4 billion is allocated to recurrent expenditure and M5 billion to capital expenditure. The Minister admitted that the growth of the wage bill is alarming and proposed an across-the-board increase in public sector salaries and wages of only 4 percent, despite the projected inflation rate of 6 percent.

The proposed financing of this Budget is estimated at M15.7 billion. This will include domestic tax revenue of M6.3 billion, M1.3 billion non-tax revenue, M7 billion from the SACU and M1 billion through budget support, donor grants and loans to achieve the proposed overall fiscal surplus of 1.3 percent of GDP.

Given the volatility surrounding the SACU revenue, it is proposed that, to the extent possible, SACU receipts are restricted to the investment budget and additional domestic revenues be mobilised to reduce dependence on SACU.

A draft minerals and mining policy is currently under review and expected to be finalised during the first half of 2014. With the assistance of the International Monetary Fund (IMF), the Government reviewed the fiscal regime governing the mining sector and it is expected that a new mining tax regime will be finalised as part of a wider review of the mining code.

A geological survey to determine the country's potential mineral resources will be advanced and a feasibility study will be conducted in 2014/15 for the establishment of a diamond centre, which will provide facilities for the sale of raw diamonds, cutting and polishing. The construction of the Letaeng cutting and polishing centre, aimed at supporting local production and beneficiation, has been completed and awaits agreement with Government on its operation.

The Money Transfer and Forex Regulations and Credit Reporting Regulations have been promulgated during the past year and the Insurance and the National Payment Systems Bills are being considered in Parliament and expected to become laws by end of 2014.

It is admitted that Lesotho's 'Doing Business' ranking is still very low at 136 out of 189 countries, which compares unfavourably with the rest of the sub-region. To improve the investment climate, Government intends to pursue legislative and regulatory reforms, including development of an investment policy.

To reduce the personal tax burden and encourage tax compliance, the Budget proposes reduction in both the lower and upper personal income tax rates, from 22 to 20 and 35 to 30 percent, respectively.

It is proposed that the 15 percent Value Added Tax (VAT) rate on alcohol and tobacco be abolished in order to simplify the VAT system. With the exception of zero-rated items, electricity and telecommunications (which is subject to VAT at 5 percent), all items will be taxed at the standard VAT rate of 14 percent. To curb abuse of alcohol and tobacco that could possibly arise from a reduction in the cost to consumers it is proposed that an additional 4 percent levy be imposed on purchases of these two items.

In order to promote regional integration and eliminate unfair competition, it is proposed to abolish the zero corporate tax rate on extra-SACU exports and the standard 10 percent rate to apply to all manufacturers.


Namibia's 2014/15 Budget presented on 19 February 2014 by the Minister of Finance, Ms Saara Kuugongelwa-Amadhila, announced that the budget deficit is expected to narrow to 5.4% of GDP from 6.4% of GDP in 2013/14, while the GDP growth rate is expected to average around 5.0%. Government expenditure for the 2014/15 financial year is expected to increase by 26.7 percent to N$60.28 billion. 79.6% of the spending commitment (N$48 billion) is allocated to operational expenditure. Analysts questioned the considerable allocations towards wage increases for civil servants.

N$5.3b was allocated to finance the 800 mega-watt Kudu gas-to-power plant and state-owned mining company, Epangelo Mining.

Members of the private sector raised a number of concerns at a public discussion on the Budget, including the need to start diversifying revenue sources and reduce reliance on the SACU receipts due to the uncertainty regarding the future of SACU revenues. Namibia's share of revenue from the SACU is estimated at R18.1b in 2014, constituting 34.7 percent of the country's total revenue collection of N$52.5 billion. Several businesses are also still facing challenges that arise from the slow processing of VAT refund claims.

It was announced that the non-mining company income tax rate will be reduced by a further 1% to 32% and the withholding tax on royalties payable to non-residents will be reduced to 9.6%. The VAT registration threshold will be increased from N$200 000 to N$500 000.

To broaden the revenue base, the introduction of environmental taxes was proposed, which will encompass a carbon dioxide emission tax on motor vehicles, incandescent light bulbs, and motor vehicle tyres. The Minister also proposed an export levy on primary commodities and natural resources including minerals, crude oil, gas, fish and game in order to promote domestic value-addition.

Government undertook to continue with tax reforms to enhance efficiency, broaden and deepen the revenue base and increase the competitiveness of the tax regime.


Minister of Finance, Martin G. Dlamini presented the 2014/15 Budget on 21 February 2014, announcing an expected growth rate of 2 percent.

The total amount of resources available in fiscal year 2014/15 is estimated at E15.3 billion (a 19 percent increase from 2013/14). E5.9 billion (51 percent) of the 2014/15 Budget is projected to be financed by non-SACU revenue. This is in line with Government's plan to reduce dependency on SACU receipts which stood at 56 percent in 2013/14.

The balance of the Budget will be financed through grants by development partners and loan funding to achieve an estimated deficit of 3 percent of GDP.

Overall recurrent expenditure will increase from E9.7 billion in 2013/14 to E10.6 billion in 2014/15, with wages and salaries increasing to E4.7 billion in 2014/15.

Capital spending will increase by 44 percent to E3.7 billion in 2014/15. Approximately 81 percent of this funding will be allocated to completing the ongoing projects, including the completion of Sikhuphe International Airport, the Sikhuphe-Mbadlane Road, and the Sicunusa-Nhlangano road.

New capital projects include the construction of the Hotel and International Convention Centre, the Mhlume Siphon scheme, rehabilitation of Malkerns Canal and various roads projects.

Swaziland Railways and South Africa's Transnet have partnered to construct a railway line approximately stretching 146km from Lothair to Sidvokodvo, Lavumisa and into South Africa through Golela. Significant progress has been made towards the completion of the feasibility study which is projected to be completed in the second quarter of 2014. The project is expected to allow quicker and cheaper access to major ports.

To ensure optimal and responsible exploitation of the minerals and mining sector, the Government enacted the Mines and Minerals Act and Diamond Act in 2011. Government has allocated E4.4 million in the 2014/15 Budget to continue implementing the 2011 Mining legislation and to encourage mining investors to process minerals within the Kingdom.

The Government plans to develop an Independent Power Producer policy in collaboration with the Southern African Trade Hub, to enable more power generators to enter into the electricity industry. In addition, hydro power generation capacity at the Dwaleni Power station along Ngwempisi River is to be increased and the exploration of renewable energy sources such as wind and solar power is to continue to be promoted.

Government through the Swaziland Investment Promotion Authority (SIPA) has prioritized the creation of an investment climate that is conducive for doing business in the country, through the implementation of the Investor Road Map (IRM). As a consequence of implementing the IRM, the country's ranking improved by 10 places in the Global Competitiveness Index from 134 in 2012 to 124 in 2014.

SRA, in partnership with COMESA, has embarked on upgrading the Automated System of Customs Data (ASYCUDA), which will provide an improved customs administration platform, including the direct payment of VAT refunds at the border.

Government vowed to continue supporting the Anti-Corruption Commission (ACC) and the Directorate for Public Prosecution (DPP) to enhance their fight against corruption in Swaziland and allocated E20.2 million to them.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions