Potential Impact of Trade on Economic Growth in the Southern African Customs Union Region

Abstract

Trade supports economic growth and regional integration, especially in developing economies. In the Southern African Customs Union (SACU), trade is heavily skewed. South Africa dominates over 97% of intra-regional trade, raising concerns about dependency and uneven growth. Despite SACU’s rich natural resource base and duty-free trade structure, few studies have examined the impact of trade on economic performance across member states. This study fills that gap by employing literature search to assess how exports, imports, and trade-related policies influence economic growth, cross-border entrepreneurship, and regional development. It adopts a qualitative narrative literature review to explore SACU trade's structural, institutional, and policy dimensions. Data were drawn from peer-reviewed journals, policy briefs, official reports, and case studies. Thematic analysis covered trade dominance, natural resources, trade facilitation, and entrepreneurship, focusing on non-quantifiable aspects influencing regional trade. The study finds that South Africa’s dominance influences SACU trade patterns, often limiting the autonomy of BLNS economies. Natural resource trade offers potential for diversification, but policy and infrastructural constraints hinder its effectiveness. Trade facilitation challenges, such as licensing and border inefficiencies, remain significant, while small business participation in cross-border trade is growing but insufficiently supported by current policies. These findings highlight the need for institutional reforms and inclusive policies to balance regional power dynamics and enhance trade equity. Strengthening infrastructure and supporting entrepreneurship can unlock SACU’s trade potential, promoting more equitable integration and sustainable economic development across all member states.