With the increasing economic activities, SADC has also been implementing economic programs using financial resources from SADC Member States and from Development Partners. According to the Gold Field Financial Report published in 2016, the SADC regional funding model has not worked due to the increase in regional economic activities and a significant financing gap of about 99.3%. The financing gap arises from the fact that the SADC Community currently needs US$64 billion to fund regional infrastructure projects but only US$43.2 million is currently committed to this budget by Member States. In addition to that, commitments from Member States account for only 9.2% while the funding from Development Partners account for 90.8% of the project funding. This situation reflects a significant funding gap.
To mitigate this risk in the SADC region, in 2015, the RISDP Mid Term Review, and the SADC Council of Ministers, directed that alternative sources of financing regional integration programmes and projects should be looked at. Among other sources of financing regional integration programmes and projects: the Import Levy, Tourism Levy, Financial Transaction Tax and Transport Levy were proposed. However, it is important to note that SADC Member States' economics are not the same and therefore might not react the same way to the proposed financing sources. Therefore, a thorough analysis is required at a national level to assess the impact of the proposed financing sources.
The first objective is to review the theoretical and empirical that explains proposed financing sources. The study will focus only on four options namely: Import Levy, Tourism Levy, Financial Transaction Tax and Transport Levy. The second objective of this study is to conduct an impact assessment to analyse the potential effect of the four proposed financing sources on key economic indicators in the respective SADC member countries using an econometric model.