The Central Banks of 15 states in southern Africa will complete a pilot project to harmonise the payment infrastructures of the four countries with the ‘Rand’ currency within two years.
The Southern African Development Community (SADC) - an intergovernmental organisation which aims to improve economic integration - is built on the Single European Payments Area (SEPA) model, as Tim Masela, of the South African (SA) Reserve Bank, said on 25 October: “There is a common currency target for the region of 2018 and we want to make sure that any new infrastructure can support it. The experience in Europe is very useful”.
The pilot comprises of two phases. Firstly, the Central Banks of SA, Namibia, Swaziland and Lesotho will harmonise existing bank and payment systems. In the second phase, integration will be expanded to Congo and Zimbabwe.
“It’s an important move and very good for SA”, said Simon Cavill, Director of Strategy at Mi-Pay. “The first phase will be easy to implement as the countries have historically been close toSA, but it will be challenging to align countries with radically different political and economic structures.”
Not everyone thinks SEPA should be an example. “Let’s hope that SA keeps this as a business-led project and does not get tied up with politics and red tape like in the EU”, said Gary Wright, of BISS Research.
Cavill remarks: “I can see the value for SA, as the commercial powerhouse of the region, but what's in it for the smaller countries?”
Published previously in E-Finance & Payments Law & Policy, Michiel Willems 2010. Copyrights apply