SADC Africa's most successful regional community: as the Southern African development community (SADC) celebrates 30 years since its formation, Neil Ford examines how Africa's most successful regional community is gearing up for a very ambitious future.

Position:SADC
 
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Despite its various drawbacks and the slower-than-hoped-for pace of development, there is little doubt that the SADC is the most successful regional economic community in Africa. With a population of about 250 million people and combined GDP of $400bn, Southern Africa offers huge potential for foreign investors.

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The SADC currently has 15 member states, including Madagascar, which had its membership suspended in 2009 after the coup led by Andry Rajoelina, and Seychelles, which rejoined the organisation in 2008.

The focus of the organisation has changed markedly since 1980. Originally set up as an organisation of Frontline States opposed to Apartheid South Africa, it is now very much built in the mode of other regional economic blocs, while South Africa now plays a prominent role in encouraging closer political and economic cooperation across the region as a whole.

Article 5 of the SADC treaty lays out the organisation's main aims: "To achieve development and economic growth, alleviate poverty, enhance the standard and quality of life of the people of Southern Africa and support the socially disadvantaged through regional integration; evolve common political values, systems and institutions; promote and defend peace and security; and promote self-sustaining development on the basis of collective self-reliance of the region."

The timetable for harmonisation and economic integration was laid down by the Regional Indicative Strategic Development Plan (RISDP), which was adopted by member states in 2003. The SADC Free Trade Area (FTA) was formed as planned in 2000 and most SADC member states have subsequently joined, with the exception of Angola, DRCongo and Seychelles.

The FTA is supposed to be followed by the customs union next year, a common market in 2015, monetary union in 2016 and the introduction of a regional currency by 2018. The creation of a single currency will require a central Southern African bank to oversee the community's monetary and fiscal policy; and a single exchange rate policy.

Such a pace of development seems very ambitious and it may be difficult to integrate the needs of diverse economies such as South Africa and Mauritius, with those that are heavily reliant upon single commodity exports such as Malawi, Zambia and Angola.

EU comparison

Unquestionably, the European Union is by far the most successful example of regional integration in recent history and has provided the model for most other similar organisations, including SADC and the East African Community (EAC).

Yet the EU has adopted a far more gradual approach towards harmonisation and economic integration than that envisaged by the SADC, with decades separating the creation of a single market from the move towards monetary union.

The SADC could also face problems because of the massive political and economic dominance of South Africa. The first incarnation of the EAC failed in the 1970s because Kenyan companies overshadowed those in Uganda and Tanzania. There are therefore real fears over whether, for example, Malawian or Mozambican firms will be able to compete with their South African competitors within the SADC.

In addition, any Southern African central bank would have to manage interest rates in the best interests of the new SADC currency and this may favour big business in South Africa rather than small-scale farmers and small...

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