A proposal by Treasury to change the revenue-sharing formula for member states of the Southern African Customs Union (Sacu) might have "absolutely catastrophic" consequences for countries such as Swaziland and Lesotho, which would struggle to find alternative revenue sources to finance government budgets.

Roman Grynberg, senior research fellow at the non-governmental Botswana Institute for Development Policy Analysis, said the consequences of the proposal, which would end the transfer of billions of rand annually to neighbouring countries' governments without any strings attached, would be "serious for political stability in the whole Southern African region.

"Yes, SA would be R15-billion richer, but that doesn't include the cost of the economic collapse of its neighbours. Frankly, I don't understand why (SA's) Treasury like the experience with Zimbabwe so much that they'd like to repeat it with Lesotho and Swaziland," Grynberg said.

Sacu revenue transfers, in place for a century, traditionally finance as much as 70% of member states' budgets. Botswana, Lesotho, Namibia and Swaziland, the other members of Sacu, are already struggling to cope with a decline of more than 50% in revenue transfers in the current year.

In a presentation to the parliamentary committee on finance this week, Treasury representatives proposed changes to the current model.