PERDONAR NUESTROS PECADOS Y LIMPIARNOS de toda maldad

Africa faces a number of constraints to economic integration. Africa has yet to succeed in having a regional grouping that has each of the three fundamental conditions necessary for the success of economic integration. These are, according to Zyuulu (2008: 101), sustained political dedication, regular growth of national economies and no major economic sub-regional disparities.

Furthermore, countries with poor growth, insignificant production and manufacturing capability can hardly form a credible economic bloc.

According to Maleleka (2007: 4), the three dominant reasons for the absence of convergence are:

 Productive technology tends to dominate in the developed economy,

 Convergence holds among countries with a sound capital base, and the use of modern technology, and

 Poor countries generally have low long-term potentials.

Other limiting factors include inadequate and sub-standard transport systems, insignificant trade among African countries and the lack of any developed financial markets. Africa also lacks well- developed infrastructure and has a number of restrictions on the movement of both goods and the factors of production across borders (Zyuulu 2008: 102).

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4.6.5 RECOMMENDATIONS

The SADC Member countries are urged to continue working on achieving their set targets, despite the setback arising from the global economic meltdown. The diversification of economies in the SADC region from primary goods producers to value addition would help most countries recover from their current economic downturn.

According to Zyuulu (2008: 103), different levels of economic development in the region should inspire least-developed countries to attain higher levels of economic integration, which will, in turn, facilitate accelerated growth and development. The choice is limited; economic integration is the viable way for economic development in the SADC and for Africa in general.

Africa as a whole should present an opportunity to speed up economic integration to enable countries to catch up, promote financial deepening, stabilise their economies, promote economic growth and provide a wider market. Economic integration will not only provide a wider market but also provide a stronger bargaining base in global form and for the mutual benefit in the form of accelerated growth and development among member countries.

A single central bank in the SADC will contribute to regional economic stability, which is a precondition for the sustained economic growth and job creation required, not only in the SADC region, but also in the rest of Africa. The challenge facing South Africa, given its dominant economic role in the SADC, is to ensure the necessary macroeconomic stability in the region to foster continued progress towards the achievement of the convergence goals.

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4.7 CONCLUSION

The Southern African Development Community (SADC) first came into existence in 1980, and it was then known as the Southern African Development Co-ordination Conference (SADCC). The transformation of the organisation from a Co-ordination Conference into a Development Community (SADC) occurred in 1992.

The current Member States are: Angola, Botswana, the Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe.

The SADC vision is one of a common future, within a regional community that will ensure the economic wellbeing, an improvement in the standards of living and the quality of life, freedom and social justice; peace and security for the peoples of Southern Africa. Macroeconomic convergence is a crucial precondition for long-term stability, and it is a prelude to economic integration in SADC. Achieving this goal will contribute to Africa‘s overall economic stability, and therefore increase the economic growth and create jobs (SADC 2010).

The SADC has set a number of goals for 2008, 2012, 2015 and 2018 -- to reach macroeconomic convergence. Four macroeconomic variables were chosen to act as a set of indicators that could monitor progress towards convergence and economic development. These four macroeconomic variables are; inflation, fiscal balance, public debt and the current account balance.

The criteria and goals for arriving at macroeconomic convergence and the achievement up to

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2008 are as follows:

 The single digit inflation rate was only achieved by Madagascar, Malawi and Mauritius.

The rest of the SADC countries inflation outran the single digit target. This is attributed to high food and energy prices.

 All the SADC Member States besides Angola and Zimbabwe have made some progress towards achieving the target of having less than 5 percent of the budget deficit as a percentage of GDP. Botswana and Lesotho have even reported budget surpluses.

 The target goal for public debt states that public debt should be less than 60 percent of GDP. Only the DRC, Seychelles and Zimbabwe have debt ratios above 60 percent. Hence, in this regard, the SADC is nearing macroeconomic convergence.

 The target of having less than 9 percent of GDP in current account deficit worsened for most SADC countries. However, it was still within the required convergence target.

Angola, Botswana, Lesotho and Namibia all improved their current accounts.

It would appear that most SADC countries have achieved the convergence goals set for 2008 and even more progress should occur from then until 2012 and eventually 2018. However, with the recent world economic crisis it would appear that the SADC has regressed in achieving its set targets.

Some limitations of macroeconomic convergence for the SADC would include insignificant trade among the SADC members, poor political dedication, slow growth, insignificant production manufacturing capabilities, inadequate transport systems, lack of developed infrastructure, as well as the restricted movement of both goods and factors of production across borders.

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The way forward for the SADC is to establish a central bank as soon as possible and continue to work towards achieving the set targets, despite the setbacks arising from the global economic meltdown. It is up to the leading SADC members, such as South Africa to promote macroeconomic stability and to foster continued progress towards economic integration, which will, in turn, facilitate growth and development and inspire least-developed countries, particularly the SADC Members to follow the example.

The next chapter illustrates how economic freedom can contribute to the SADC achieving its economic goals. It will show that by becoming freer the SADC can meet the set macroeconomic convergence goals and eventually achieve economic integration.

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CHAPTER 5