BG correspondent

The bell has tolled for Southern African Development Community’s  (SADC) most ambitious project – the realisation of a monetary union and single currency.
Set timelines for the achievement of this are constantly being shifted with such outrageous impunity it is beginning to frustrate professionals through-out the sub-region and continent. In the meantime, at their various discourses, politicians continue to sign on the dotted lines committing their countries and the region to the project.
It all began with the signing of the SADC Treaty in August 1992 in Namibia converting the Southern African Development Coordinating Conference (SADCC) to a Development Community (SADC).
Thereafter the process of regional integration was put on full throttle with the signing of a flurry of protocols to give effect to this aim. Amongst these, was the Protocol on Finance and Investment (FIP) signed as recently as 18 August 2006 in Maseru, Lesotho.
Further, SADC restructured its operations by centralising the sector coordination work from member states to the Gaborone secretariat. This is how various directorates were established at the secretariat.
And so last Friday the Trade, Industry, Finance and Investment (TIFI) Directorate organised, in conjunction with the French Embassy, a seminar on financial integration on SADC. France’s Ambassador to Botswana Genevieve Iancu welcomed delegates, and used the moment to extol progress of the European Union, to which her country is a member. The occasion was yet another opportunity for member states and more precisely, TIFI, which has been mandated with the implementation of the Finance and Investment Protocol (FIP) to gauge progress. Already, SADC has started full implementation of the Trade Protocol, which aims to enable free movement of goods, services, capital and people within the region, via the 2008 Free Trade Area (FTA).
At the moment, the region is grappling with establishing a Customs Union, which was scheduled for 2010, but is unlikely to happen. The other targets envisaged by the Regional Indicative Strategic Development Plan, include the establishment of a Common Market by 2015, a SADC Central Bank by 2016, Monetary Union in 2016 and a Regional Currency by 2018.
Head of International Relations at the South African Reserve Bank, Mshiyeni Belle cast aspersions on the region’s abilities to meet these targets given the lack of political will. “We may not realistically have a central bank in six years’ time from now, let alone a single currency,” he told the seminar. Stefan Nalletamby, the Partnership Coordinator for “Making finance work in Africa” at the African Development Bank based in Tunis also cast aspersions on these targets, saying national governments were grappling with trying to contain high inflation rates and reduce budget deficits on the back of the recent world recession.
In a post seminar interview, the Mauritian Nalletamby told Botswana Guardian that regional integration was a mammoth task, especially that regional economic communities were being touted as stepping stones to ultimate continental unity envisaged under the Abuja Treaty that established the Pan African Economic Community (PAEC). However, TIFI operatives are beaming confidently pointing to some of the work already underway. The Head of TIFI, Boitumelo Gofhamodimo later told Botswana Guardian that the region was making advances in macroeconomic convergence, a necessary prerequisite for financial integration. SADC Ministers of Finance have approved a policy framework on the liberalisation of exchange controls. Botswana, Mauritius and Zambia have liberalised fully while the other SADC countries are at different stages.
Ultimately liberalisation of exchange controls in SADC aims to achieve currency convertibility, yet another factor towards attainment of a singe currency in the region.
But, observers point to inconsistencies in this roadmap. Uppermost is the factor of overlapping membership in the regional economic communities. For example, some members of SADC belong to either the East African Economic Community (EAC) or the Common Market of Eastern and Southern Africa (COMESA) or both. This bodes ill for the aims of a Customs Union with a common external tariff and a Monetary Union with a single currency.
These are some of the challenges that the central bank governors and experts in technical committees of SADC are presently addressing even as they struggle to meet the set timelines.