The Revenue we Keep Calling Ours

For decades, a fifth to a third of Namibia’s budget has come through the Southern African Customs Union revenue pool, a shared regional arrangement that moves with the region’s trade. This year it shifted by billions, a timely moment to examine how that revenue works and how to build on it.

Every national budget contains one number the country would rather not dwell on. For Namibia, it is the line marked SACU. Each year a large share of what the government spends does not come from taxes we levied or income we earned. It arrives as a transfer from SACU; the common pool of customs and excise duties shared among its members. In 2024/25 that transfer was worth N$28 billion. In 2025/26 it fell to N$21.1 billion, roughly a quarter gone in a single budget. It has since clawed back some ground: a quarter of the state’s money swings by billions year to year, on forces beyond our control.

The Namibia’s total revenue for the FY2026/27 stood at N$89.6 billion. For most of the government revenue, SACU has historically been the second-largest source, after VAT. Despite this, it is not money Namibia earns in any ordinary sense. The allocation is driven by regional trade dynamics and apportioned through a revenue-sharing formula that Namibia participates in shaping yet does not solely determine. For instance, when South Africa imports less, or commodity prices soften, or the formula is adjusted, our revenue moves, and none of those levers sit in Namibia.

The fall of almost N$7 billion this time came from a softer commodity cycle, a shrinking regional import pool, a weaker South African economy that drives the customs take, and changes to the sharing formula itself. Not one of them was a Namibian policy choice. All of them landed on a Namibian budget. That is the nature of the line: real money, spent on real services, resting on decisions taken elsewhere.

The consequences are not abstract. Government is the largest employer and the biggest single spender in the country, and its wage bill alone runs to around N$37 billion, close to a third of the budget. When a revenue line that large contracts, the choices are hard: cut spending into a fragile economy or borrow to fill the hole.

Domestic issuance has been among the heaviest in our history, and last year’s US$750 million Eurobond, redeemed in full through a disciplined sinking fund and to real national credit, still drew that fund down and added N$6 billion in domestic debt. Interest payments already absorb roughly a seventh of revenue.

The deeper challenge, though, is not any single year’s number. It is the model beneath it. For more than three decades we have funded a modern state with revenue we did not raise, drawn from an economy we have not yet diversified, and allowed ourselves to treat the cheque as permanent. That was always, in part, a wager on someone else’s trade. This year the wager showed its edge, as it always would.

There is a way forward, and much of it already sits in the country’s own development plans, which rightly place diversification and value addition at the centre. The task is less to invent the direction than to move faster, and to fund it from home. Treat the transfer as a windfall, not a baseline, and save the strong years. Widen the domestic base by growing and formalising the productive economy. Add value to what we export, capturing more of the price and less of its swing. Strengthen our state-owned enterprises and the spending side, so a narrower revenue base is not overstretched.

None of this is an argument against SACU, which has been genuinely good to Namibia, nor against a government that has managed its obligations with real discipline. It is an argument for finishing the job: to pair that discipline with an economy that pays for more of what it does. A nation is most secure when its own productivity, not a transfer it cannot predict, carries its ambitions.

Jason Kasuto is Managing Director of Monasa Advisory & Associates, a Namibian transaction advisory firm working across capital markets, research and development finance.