The contribution of the Southern African Customs Union (SACU) to economic development and poverty eradication in Namibia is significant because the revenue generated through the customs union boosts the national budget, says Finance Minister Calle Schlettwein.

Speaking during his presentation on the importance of SACU on poverty eradication at the Foreign Policy Review conference in Windhoek Tuesday, he noted that Namibia had so far secured revenue streams varying between 25 per cent and 40 per cent of the country's total revenue from the Customs union.

The Customs union also offers quota-free access to larger markets which enables Namibia to diversify its economy, said Schlettwein, who added that SACU remained a stepping-stone to the economic integration agenda which integrated Namibia into the Southern African Development Community (SADC) and Africa at large.

"SACU is also important for us to negotiate on free trade agreements which help us to improve our market access," he said.

The minister noted that Namibia has diversified its economy and is now second in the sub-region after South Africa.

Namibia exports diamonds and other minerals, beef, meat, fish, karakul sheep pelts and light manufactured goods, which accounts for nearly five per cent of the total SACU exports.

Schlettwein, however, noted that neighbouring South Africa remains Namibia's best import partner in finished goods such as vehicles, machinery and mechanical appliances, ore and commodities, electrical machinery and equipment and precious stones such as diamonds.

Most of these goods are imported from South Africa, China, Switzerland, Botswana and the Democratic Republic of Congo (DRC).

Meanwhile, SACU Executive Secretary Paulina Elago noted that trade in services is a priority but has not been implemented because of a lack of a legal framework, adding that it however contributes 60 per cent to the gross domestic product (GDP), which makes a strong case for Namibia to look at it.