By Chris Bathembu
Lilongwe - South Africa is backing the Southern African Development Community’s (SADC) ambitious plan to launch a sing currency for the continent, but Pretoria admits there are still challenges in implementing the plan.
SADC countries have been talking of implementing the single currency initiative by 2018, but South Africa’s Trade and Industry Minister Rob Davies, says its highly unlikely that this goal will be met.
“There is still a bit of unfinished business in as far as the consolidation of the free trade agreement, there are a few challenges and I think we are slowly but surely we are beginning to address those challenges,” Davies told SAnews on the sideline of the SADC summit underway in Malawi. There are fears that the integration and the introduction of a single regional currency will tilt balances of trade and investment in favour of the more stable economies in the region that may eventually swallow the smaller economies. But Davies dismissed this saying a single currency for the region could in fact boost trade and competitiveness.
“Those claims that bigger economies will suddenly swallow small economies are unfounded ... understanding that we may have sensitivities and that is normal that is why we are proceeding with great caution.”
SADC wants this model to be initially tested on the current common monetary area countries that use the South African Rand (South Africa, Lesotho, Namibia and Swaziland) and if successful, will be ready to be rolled out to the rest of the SADC member states as the region advances its integration process.
Davies agrees that the final step in the process of deepening regional economic integration in SADC is the implementation of a single currency, which will establish the region as an economic union.
Regional integration has been central in SADC meetings in recent years and on Saturday incoming SADC chairperson and President of Malawi Joyce Banda reiterated the importance of facilitating the free movement of goods and people within SADC countries for the benefit of the region’s economy.
Banda said the fact that SADC countries’ economies depended on the production and export of raw material made them vulnerable to external threats. This needed to change and only a political will would help SADC become more economically stable.
“I hope as the new chairperson of this great community, I will carry on the good work that has been done by my predecessors I pledge to bring SADC closer to the people and I pledge my full support for the integration of our region,” Banda told a packed hall at the opening of the summit at Bingu International Convention Centre here on Saturday. With the exception of King Mswati of Swaziland, all SADC Heads of State have showed up for the summit. The leaders are seized with the implications of the global financial economic environment on SADC economies, focusing on constraints, opportunities and implications.
President Jacob Zuma, who is accompanied by several cabinet ministers, is among the leaders at the two-day summit who will deliberate on these issues facing the region.
As the regional power house, South Africa is key to SADC’s success and the region’s economic integration.
Banda said every member state must contribute to this integration and South Africa was central to this task, a sentiment echoed by African Union Chairperson Nkosazana Dlamini Zuma.
Dlamini Zuma, who has been trying to bring about political stability in another SADC member state Madagascar, told the gathering that strengthening democracy in Africa was key to its prosperity. In a veiled reference to Egypt and Madagascar, she said Africa cannot afford to have democratically elected governments to be overthrown by groups of people at any time.
Egypt continues to be plunged into chaos as opponents of last month’s military takeover fight security forces and their civilian allies in street battles across the capital and other cities.
“Africa is concerned about the escalation of violence in Egypt and the political instability in Madagascar. We appeal to all the concerned parties to find amicable solutions to these problems,” said Dlamini Zuma.
The summit ends on Sunday. – SAnews.gov.za
