Is the southern African development community (sadc) regional bloc suitable for a monetary union?

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Date
2007
Journal Title
Journal ISSN
Volume Title
Publisher
University of Dar es Salaam
Abstract
The Southern African Development Community (SADC) has agreed to implement a monetary union and a single currency by 2016.This study considers the economic prerequisites and implications for a monetary union, and whether a SADC monetary union is feasible. The study examines the extent to which the Optimal Currency Area (OCA) theory is applicable within the bloc, as well as the extent to which the key macroeconomic indicators, namely inflation, budget deficits, external account and public debt, are converging within SADC. The study goes further by considering the elects that emerge due to the issue of overlapping of membership within the bloc and the role it plays on the whole idea of a monetary union formation. It concludes tint, only few countries, namely Botswana, South Attica, Lesotho, Mauritius, Tanzania and Mozambique, have macroeconomic performance that satisfies some of the criteria set for monetary union. The remaining SADC countries, namely Angola, DRC, Zambia and Zimbabwe, make up a 'non-converging ' group that cannot yet be considered potential candidates for a monetary union. Together with all this, the overlapping of membership problem and political constraints within the bloc, continue to make the SADC monetary union goal impossible. For this concept to work, the member countries should at least increase their cooperation and coordination in the formulation and implementation of macroeconomic policies, and also avoid multiple memberships in regional blocs.
Description
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HG3898.2.H34)
Keywords
Monetary unions, Southern African Development Community
Citation
Hangi, M.A (2007) Is the southern African development community (sadc) regional bloc suitable for a monetary union?Master dissertation, University of Dar es Salaam, Dar es Salaam.