Addressing the Challenges of Macro-economic Policy Convergence in the SADC Region

Macro-economic convergence is critical for Southern Africa Development Community (SADC) countries to achieve a level of harmonization required for the establishment of a single currency under the proposed monetary union by 2018. According to the SADC Memorandum of Understanding (MoU) on Macro-economic Convergence, signed by the SADC ministers responsible for finance and investment in August 2002, the underlying principle is to achieve and maintain macro-economic stability by converging on “stability-orientated economic policies implemented through a sound institutional structure and framework”. The MoU is annex 2 of the SADC Protocol on Finance and Investment which came into force on 16 April 2010. The key variables for achieving convergence are inflation, fiscal deficit and public debt.