- The Southern African Development Community (SADC) may introduce a single Southern African currency by 2016, to be managed by a single central bank. This has been revealed by the central bank governor of South Africa and the government of Lesotho. The 13-member community further plans to introduce a free trade area by 2008, abolishing all tariffs and non-tariff barriers.
According to information released by the government of Lesotho today, SADC plans for further economic integration are far advanced. A common Southern African market - following the European Union (EU) model - is to be established by 2016. The SADC block will unite the markets of Angola, Botswana, Congo Kinshasa (DRC), Lesotho, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. Madagascar is joining SADC later this year.
The plan for a single market calls for the abolition of tariffs and non-tariff barriers by 2008; a SADC-wide customs union by 2010; a common market, including free movement of labour and capital, by 2015; and a single currency and central bank by 2016, according to information released by the government of Lesotho.
South African Reserve Bank Governor Tito Mboweni was said to have released this plan one week ago. Any of the SADC states that have not achieved the targets for inclusion will be left behind, Mr Mboweni said in a recent interview with South Africa's 'Business Times'. The SADC scheme follows a road map already implemented by the EU in the creation of a European single market.
Once inside the integrated monetary union, there would be no way out for countries battling to keep within the agreed parameters, according to the scheme. As in the EU, disputes and non-compliance would be matters for a regional court with hefty fines for governments who fail to adhere.
According to the government of Lesotho, member states could continue to print their own notes and coins under a monetary union even if there was only one central bank, "but it would be far better to have a single unit of currency for the region." Whether that should be the rand, pula, dollar or something else would be decided later, Mr Mboweni was quoted as saying.
Protocols had already been signed and others in the works would bind future governments of 13 current SADC states and their central banks to follow through on the program, the South African central bank Director said in a recent interview with the national newspaper 'Sunday Times'. National committees to advance preparations for this economic integration were already being established.
The Southern African region to a wide degree already is dependent on the South African rand. Lesotho, Namibia and Swaziland already have tagged their national currencies to the rand in a one-to-one exchange rate. Also the currencies of Botswana, Mozambique, Zambia and Malawi are heavily dependent on the rand, South Africa being their major trade partners.
The SADC region is already Africa's major economic block, with a number of states in the process of becoming middle-income countries. Economic stabilty and wealth is particularly high in South Africa, Botswana and Namibia, while the poorer countries Mozambique, Angola and Tanzania are producing impressive growth rates. Zimbabwe and Swaziland are the region's economic and political trouble-makers, who will find it difficult to meet SADC targets.
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