SADC monetary zone on track
The Southern African Development Community is still working hard to be on track to become a common monetary zone by 2018 despite several challenges.
Mshiyeni Belle, the head of the secretariat of the SADC's committee of central bank governors, said: "We currently have a framework of macroeconomic convergence. We're also working on statistical areas to ensure that we're using similar standards for comparing convergence indicators."
The committee was established in 1995 as part of the finance and investment sector of the SADC.
The 15-member state SADC is planning to have a single currency by 2018 and a single central bank by 2016.
However, the road to achieving this is likely to be difficult given the disparities in the economies of the SADC countries.
But Belle said countries were already doing a lot to stabilise their economies and make them more aligned.
"We've managed to modernise payment systems in the region. For instance, 12 countries have implemented real time settlement and 12 countries have implemented at least one electronic clearing system.
"About eleven of the 15 countries have real time gross settlement systems," he noted.
"We need to harmonise banking supervision regulation, have sound banking laws and good corporate governance. We also need to have uniform IT systems," he said.
The region had set 2008 as the year by which member states should have single-digit inflation in order to progress with the creation of a single currency region.
Belle said although member states have been trying to reach this goal, the global financial crisis of 2008/9 set them back.
Statistics show that member states such as Angola, Democratic Republic of Congo, Tanzania and Zambia still had double-digit annual average inflation rates in 2009 of 13.7%, 46.9%, 12.1% and 13.5% respectively.
"They [countries] did relatively well in trying to reach a single-digit inflation rate, but they were affected by the recession. But I think it has made the region learn how to manage external shocks better," Belle said.
Authorities in the SADC have been quoted as saying that the developments in the Eurozone will not deter or discourage them from moving towards a single currency by 2018.
Belle said: "For us the benefits of a single monetary zone are more important than the challenges. We would be able to contain inflation, facilitate trade between member countries themselves and increase competition. Once there's uniformity, then it becomes easier."
The Eurozone developments have however rattled some parts of Africa and their own plans for better economic cooperation through sharing a common currency.
East African countries are now considering delaying the formation of the East African Monetary Union, which they had planned to implement from 2012.
South African Reserve Bank governor Gill Marcus recently raised doubts about a too rapid move to a single currency or central bank or army: "Look at Europe where you have a lack of convergence. Greece's problem is they cannot devalue the currency because it's fixed."
Then there's the thorny issue of which currency should be used for the region once all the conditions for the region to become a single currency zone have been met.
Belle said: "Politicians will sort that one out. We'll wait for them to discuss that first. We need to put a lot of work into the process but it can be done in a gradual way."