One of the oldest established common monetary areas, South Africa, Namibia, Swaziland and Lesotho, where the rand is the main currency, could be a springboard for regional integration, SA Reserve Bank Governor Tito Mboweni (pictured) said on Thursday.“We already in the Southern African Development Community have these countries in a common monetary area, a very successful monetary area in the world.”
Mboweni was delivering the CR Swart Memorial Lecture at the University of the Free State in Bloemfontein on Thursday on the subject: “Seeking greater political and economic regional integration in Southern Africa in challenging and turbulent financial times“.
The Governor said there was, nevertheless, one major fault with the monetary area. Although the countries of Swaziland, Namibia and Lesotho allowed the South African Rand to be used as a “legal tender” they did not participate in the formulation of its monetary policy.
“That is an un-democratic process that really and urgently needs to be changed.”
Mboweni said the governors of the central banks of the four countries had already developed comprehensive proposals to deal with the situation. The proposal centred on the creation of a common central bank for the four countries.
“Which, if created, I am convinced would form a good basis for the establishment for an SADC-wide central bank. It could be used as a springboard for a SADC Central Bank.”
In order for proper regional integration to take place it was a “necessary but not a sufficient condition” for the regions political leadership to want to integrate, Mboweni said.
The Times (SA)
Post published in: Economy