In line with its mandate of strengthening Regional Integration throughout Southern Africa, the Southern African Development Community (SADC) promotes Macroeconomic Convergence in the region. This process advocates that Member States move toward a common macroeconomic climate with similar policies on Inflation, Public Debts and Current Accounts.
Macroeconomic convergence stabilises the regional economy, safeguarding it from excessive fluctuations due to external factors. It aims for low, stable levels of Inflation; sustainable Budget Deficits; minimal Public Debt; and equitable Current Account Balances. This stability in turn fosters Economic Development, as it provides a predictable and attractive environment for Investment and business.
In order to officially endorse macroeconomic convergence in the region, SADC signed its Memorandum of Understanding on Macroeconomic Convergence in 2002, which it subsequently annexed into the Protocol on Finance and Investment (2006).
Macroeconomic Convergence and the Protocol on Finance and Investment
Annex 2 of the Protocol on Finance and Investment requires all Member States of SADC to converge and cooperate on economic policies that promote stability. In pursuit of these goals, SADC Member States agree to restrict inflation to low and stable levels, to maintain prudent fiscal stances with minimal deficits, maintain sustainable balances in current accounts and to minimise market distortions.
SADC recognises that cooperation and convergence in the following areas can enable a dynamic, sustainable, and integrated regional economy:
Inflation remains high throughout Southern Africa, but has greatly improved since the 1990s.
Despite that the global economic downturn has affected Member States’ economies, SADC has still achieved its budget deficit goals.
Current Account Balance
Stable current account balances indicate that the region’s financial health is slowly improving.
Debt relief programmes have enabled several Member States to improve their economic situations.
Access the SADC Macroeconomic Statistics.