Macro-economic convergence in the Southern African Development Community (SADC) : with special emphasis on monetary and financial integration

Abstract

The goals of most economic management strategies and policies are to influence major economic variables, especially, output, employment, and price stability. Accordingly, a strategy for macroeconomic convergence in the countries of the Southern Africa Development Community (SADC) has to deal with the issues of harmonization and synchronization of key policies in the sub region. The major areas of focus have invariably to include: reducing sharp divergences of fiscal and budgetary policies; harmonization of monetary and financial policies, especially in the areas of exchange rate policy, interest rate policy, and rates of monetary and expansion; and reducing high rates of inflation wherever they exist. Furthermore, coordination of balance of payments management policies as well as external borrowing and debt management may be essential in achieving the process of macroeconomic convergence.