SOUTHERN AFRICA DEVELOPMENT COMMUNITY (SADC)

TABLE OF CONTENT

INTRODUCTION

SADC MISSION

ACHIVEMENTS OF SADC

CONSTRAINTS IN SADC

ECONOMIC DEVELOPMENTS

POLICIES AND REGULATIONS

OPPORTUNITIES AND THE FUTURE OF SADC

CONCLUSION

REFERENCES

SOUTHERN AFRICA DEVELOPMENT COMMUNITY (SADC)

Introduction

Originally known as the Southern African Development Co-ordination Conference (SADCC), the organization was founded in Lusaka, Zambia in 1980, April. The Declaration and Treaty establishing the Southern African Development Community (SADC) replacing the Co-ordination Conference was signed at the meeting of Heads of State on 17 August 1992, Namibia.

SADC has 15 members namely; Botswana, Angola, DRC (Democratic Republic of the Congo), Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. South Africa acceded to the SADC Treaty on 29 August 1994 at the Heads of State Summit in Botswana. (www.dfa.gov.za)

Two strategic frameworks guide SADC’s operations and provide the SADC member states with a comprehensive programme of long-term economic and social policies.   The Regional Indicative Strategic Development Plan (RISDP) provides a governance framework that sets standards for good political, economic and corporate governance.  The Strategic Indicative Plan for the Organ (SIPO) focuses on the maintenance of peace and stability in the region.  A SADC Secretariat, which oversees the implementation of these plans, is based in Gaborone, Botswana.  

In 2012, it was estimated that the population in the SADC region stood at 257.7 million, DRC having the largest population of 72 million.  Thirty-nine percent of the population in the region is urban. The collective GDP for the region was set at US$471.1 billion. SADC has a generally low average GDP per capita compared to other regions globally; however it is still the most developed in the whole of Africa. The region is also well integrated and has a well-established foreign investment flowing within the region. (www.sadc.int)

SADC MISSION

One is to promote sustainable and equitable economic growth and socio-economic development through efficient productive systems, deeper cooperation and integration, good governance and durable peace and security so that the region emerges as a competitive and effective player in the international economy. 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
• Promote and defend peace and security
• Promote self-sustaining development on the basis of collective self-reliance and interdependence of member States
• Achieve complementarities between national and regional strategies
• Promote and maximize productive employment and utilization of resources in the region
• Achieve sustainable utilization of natural resources and effective protection of the environment
• Strengthen and consolidate the long standing historical, social and cultural affinities and links among the people of the Region

Successes of SADC

 SADC has recently received the top position in a global comparison of indicators of Water Cooperation prepared by international think-tank Strategic Foresight Group. SADC has scored 100 in the Water Cooperation Quotient, which examines active cooperation by member countries in the management of water resources using 10 parameters, including legal, political, technical, environmental, economic and institutional aspects. High performance in the Water Cooperation Quotient also means low risk of war between countries in the concerned river basin.

China andAfrica have agreed on a new plan of action for the three years to 2015 as the two sides strive to achieve a “new type of strategic partnership.Tanzania aims to turn 350,000 hectares into productive farmland to produce food crops for both domestic and regional use.

SADC has approved the long-awaited Draft Protocol on Trade in Services which aims to provide a framework for progressive liberalization of trade in six priority services sectors among Member States.The Chirundi one stop border post between Zambia and Zimbabwe has more than halved waiting times for transport operators and improved the general flow of persons and goods in line with SADC’s regional integration agenda.

South Africa has the potential to achieve universal access to modern energy services if the region puts in place a sound and vibrant strategy to properly harness its renewable energy resources. The countries of Southern Africa are bound together by cultural and political affinities which have in the past enabled them to intervene to solve internal conflicts in individual countries. The signing of the SADC Treaty gave the organization a legal status that its predecessor did not have, giving it some amount of leverage in its negotiations with cooperating governments and international donor institutions.

SADC established the Organ on Politics, Defense and Security. The broad intent of the Organ Protocol is to achieve solidarity, peace and security within the SADC region.

The SADC tribunal was also established in 1992 by article 9 of the SADC treaty as one of the institutions of SADC.

Constraints in the SADC region.

The region faces many challenges as it works towards the achievement of the set out goals and objective. Countries that make up SADC are highly indebted countries and this hampers the full utilization of profits to economic development. A country such as the DRC has been engaged in internal conflicts since independence.

SADCC did not work out at the time because of mistrust by member states towards South Africa since it’s the largest economy in the region. This distrust was alleviated but it continues to date. The various sectors have no clear line of authority and accountability in the implementation of regional programmes. Lack of banking facilities and other financial facilities hampers trade since transactions are hectic and take time, the population don not also have opportunities to save their money and be assured of its security.

The low level of intra-states trade and dependence on exports to EU and USA has not contributed well to economic growth in the region since there is not high consumer confidence in the local market. Lack of policy measure focused on the removal of constraints such as lack of information, deviation in supply and demand in national economies and also tariff and non-tariff barriers.

Economic developments in SADC

The global economic crisis has had a significant impact upon the region’s economy. The economy began to recover in 2010 following the recovery of the global economy. In 2009, GDP stood at 0.5 percent and rebounded to 5.1 percent in 2010 and economic activity in return increased from 2.3 percent in 2009 to 5.5 percent in 2010. The growth was attributed to robust mining activities due to increased capital flows into the region. More recent developments on the global stage, specifically the Euro crisis, have undermined growth prospects in the region. In 2011 GDP was recorded at 4.7 percent, a 0.8 percent drop from the previous year, with Lesotho, Namibia, and Swaziland recording the lowest growth. Only Mozambique achieved the 7 percent growth target set by SADC.  Growth for the region is forecast at 5.1 percent in 2012. (www.sadc.int)

As a member of SADC, South Africa's main focus is regional cooperation and integration. South African post-apartheid government has regarded the SADC region as the most important priority of its foreign relations. The first foreign policy document adopted by this government was in fact a "Framework for Co-operation in Southern Africa" which gave the outline on south Africa’s vision for the Southern African region is one of the highest possible degree of economic cooperation, mutual assistance where necessary and joint planning of regional development initiatives, leading to integration consistent with socio-economic, environmental and political realities. In order to carry out South Africa's foreign policy objectives in Southern Africa, South Africa joined SADC in August 1994.

South Africa has taken a leading role in the region to address such issues as closer collaboration and economic integration. These include the establishment of a free trade area in the region, the development of infrastructure, the creation of the necessary capacity to drive this process forward, as well as the urgent need for peace, democracy and good governance to be established throughout the region. Since joining SADC, South Africa has become very involved in the activities of the community. To date, South Africa has been co-coordinating the Finance, Investment and Health sectors. (www.dfa.gov.za/foreign/Multilateral/africa/sadc)

South Africa has also played a leading role in the development of the Berlin Initiative, which strives to foster closer co-operation between the European Union and SADC. Priority issues that are included under this Initiative are the consolidation of democracy in the Southern African region, combatting illicit drug trafficking, clearance of landmines, regional integration, promotion of Trade and Investment and combatting HIV/AIDS. (www.dfa.gov.za)

The SADC Banking Association, which was established in 1998, aims to coordinate banking related activities throughout the region to ensure acceleration of development. The advanced financial system in South Africa has been identified as playing a pivotal role in strengthening the region’s financial system. Due to South Africa’s role in the region, the country has been given the responsibility to manage the SADC sub-committees that deal with regional integration of the financial sector.

While GDP per capita in the region has been growing, levels of inequality remain high.  South Africa is one of the most unequal economies in the world.  Namibia, Angola, Lesotho, Botswana and Zambia are not far behind.  Many people within the region live in inadequate housing. Across the SADC region, the cheapest newly built house by a private developer ranges from US$11 875 in Tanzania to US$60 000 in Angola.  In Mauritius and the Seychelles, housing affordability and access to quality housing is much better, although it is worth noting that even in those markets, formal housing supply is targeted at the upper income, even expat populations seeking housing.

Policies and regulations in the SADC bloc

A key issue of focus for SADC Member States in the past few years has been the Finance and Investment Protocol, which was entered into by the SADC Member States to give legal and practical effect to their commitments under the SADC Treaty.  It was signed in August 2006, and has two overarching objectives.

First, it seeks to improve the investment climate in each Member State; thereby catalyzing foreign and intra-regional investment flows.  And second, it seeks to enhance cooperation, coordination and harmonization in domestic financial sectors in the region.  The implementation of the FIP has been rather slow going – by 2011 only seven Member States had implemented over 50 percent of their country commitments under the protocol.  When it comes to actual regional integration, only 14.3 percent of commitments have been achieved.

South Africa has a highly developed policy, as its promotion of a subsidized housing delivery programme is a cornerstone of the ruling party’s development strategy. In 2011, Tanzania’s ministry of Land and Human Settlement Development launched a national programme for the regularization and mitigation of informal settlements.  In Zambia, a draft housing policy is being considered by the national government.  Housing features strongly in Mozambique’s five year strategy (2010-2014), and is also a key area of focus in Tanzania, especially given the World Bank initiative with the Bank of Tanzania to promote housing finance markets in the country.  Malawi is currently working on a new national housing policy, following an extensive overview of that country’s housing sector, undertaken in 2010 by UN Habitat.  UN Habitat has also recently published overviews of housing in Zambia and Zimbabwe.

Opportunities and the future of SADC

The region recognizes the work that it still needs to accomplish in reducing poverty and developing equal opportunities for all. SADC Investment Promotion Agencies are responsible for the promotion of foreign direct investment in their respective countries. These agencies are;

Angola	Angolan Agency for private investment
Botswana	Botswana Export Development and Investment Authority
DRC	National Agency for Investment Promotion
Zimbabwe	Zimbabwe Investment Agency
Zambia	Zambia Development Agency
Tanzania	Tanzania Investment Centre
Namibia	Ministry of Trade and Industry
South Africa	Department of Trade and Industry
Swaziland	Swaziland Investment Promotion Authority
Mozambique	Investment Promotion Centre
Malawi	Malawi Investment Promotion Agency
Mauritius	Board of Investment
Lesotho	Lesotho National Development Corporation
Seychelles	Seychelles Investment Bureau

In general, whereas political integration of SADC states is not in the near future, SADC states have achieved a lot towards economic improvement in the region. SADC member states have been undergoing policy reforms and the refinement of investment processes, which have improved their respective business environments such as establishing investment promotion agencies, improving investor protection and increasing the transparency of investment codes and policies. There is evidence that investment competition among member states remains high, and so there has been difficulty in gaining consensus on regional investment policy framework. Member states will be reluctant to harmonize where this impacts their ability to compete and where it is not in the national interest to do so.

CONCLUSION.

This paper examines the SADC as a regional economic bloc. We have established that the region has huge potential economically since the member countries have huge reserves of natural resources and an equally large human labor force. Whereas political integration hasn’t been the center of focus for the states, the work towards integration in other sectors is well underway, e.g. economic and social.

REFERENCES

Demirguc-Kunt, Asli and Klapper, Leora (2012). Measuring Financial Inclusion: The Global Findex. World Bank Policy Research WP 6025.

McCormick John, (2004): The European Union: Politics and Policies. Westview Press: Boulder, Colorado, 2004.

McKeever, K., (2008) Regional Institutions and Social Development in Southern Africa, , Annual Review of Sociology, 34:453–73 accessed 23 March 2014. 

Microfinance and Poverty Reduction in the SADC Region, 2008, accessed from: http://www.docstoc.com/docs/36476656/Microfinance-and-Poverty-Reduction-in-the-SADC- Region-SUMMARY, date 25th March 2014.

Oosthuizen Gabriël, (2006): The Southern African Development Community: The organization, its history, policies and prospects. Institute for Global Dialogue: Midrand, South Africa.

Prega Ramsamy (2003): Global partnership for Africa. Presentation at the human rights conference on global partnerships for Africa’s development, Gaborone: SADC.

Regional Economic Performance in 2011 and Medium-term Prospects, TIFI Directorate, 2012, accessed from: http://www.sadc.int/files/1613/3044/5755/Economic_Performance_2011_and_Medium_Term_ Prospects.pdf

http:// www.dfa.gov.za/foreign/Multilateral/africa/sadc. Accessed on 23^rd March 2014

http://www.sadc.int. Accessed on 23^rd March 2014

Southern African Development Community, 2012, accessed from: www.housinfinanceafrica.org, on 23^rd March 2014.

Websites consulted

www.dfa.gov.za

www.sadc.int