FINANCIAL INTEGRATION IN THE SOUTHERN AFRICAN REGION

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Consumption

Regional financial integration will also increase and spread consumption across the region as a whole through the openness of their economies. Consumption will be enhanced by free movement of production resources, which in turn creates the free mobility of goods and services across regional borders. OECD examines the degree of similarity in the structure of consumption across EU area countries. An index of similarity in consumption is compiled based on the correlations of various components of real consumption in each country, which shows a very high similarity in most countries except for Spain. The structure of consumption has increased in virtually all EU countries (Mongelli, 2002:22). For this reason, regional financial integration will subject all member countries in southern Africa to similar asymmetric disturbances because the member countries’ economies will converge into homogenous macro economic structures which will induce similar consumption structures in the region.

Economic growth

The most important contribution of regional financial integration is higher economic growth, which should contribute positively to the development of the southern African economy. Regional financial integration has the ability to draw upon the regional pool of resources that financial openness accentuates and turns into economic growth.
Another channel through which regional financial integration affects the rate of economic growth is through its impact on the total factor productivity. The openness of the region’s economies and more liberalisation will enhance capital flow. This should lead to an increase in economic growth that tends to accentuate the development of domestic and regional equity markets. This in turn enhances factor productivity in the region.
A further growth benefit outlet would be experienced when the region has aligned the exchange rates, reducing the risks associated with currency movements. This should contribute to economic growth and help to avoid any misallocation of resources. It could also help the single market to function smoothly and benefit producers and consumers.

Transfer of technology and managerial skills

Regional financing integration has the capacity to increase capital flows, which in turn paves the way for the attainment of the mobilisation of human capital in the form of technological and managerial skills. According to Prasad et al. (2003), southern Africa’s estimate including South Africa’s enrolment of engineers in 1995 was only 12 per cent, compared to 9 per cent for Korea and 22 per cent for Philippines. Asia accounts for 86 percent of RED scientists and engineers in the developing world and only 0.3 per cent of sub-Saharan Africa.
Financially integrated economies seem to attract a disproportionately large share of FDI inflows, which have the potential to generate technology spillovers and to serve as a conduit for management skills transfer, which results in an increase in productivity, in turn boosting economic growth (Prasad et al., 2003:25).

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CHAPTER 1: INTRODUCTION AND METHODOLOGY 
1.1 Introduction
1.2 Hypothesis
1.3 The importance of the study
1.4 The objectives of the study
1.5 Overview of previous research
1.6 Confining the area of the study
1.7 Research procedures and methodology
1.8 Outline of the study
CHAPTER 2: THE THEORETICAL BACKGROUND OF ECONOMIC INTEGRATION 
2.1 Introduction
2.2 The types and forms of economic integration
2.3 Regional economic cooperation as a step towards economic integration in southern Africa
2.4 Economic integration around the world
2.5 Economic integration in southern African regions
2.6 Measuring economic integration in southern Africa
CHAPTER 3: FINANCIAL INTEGRATION IN THE SOUTHERN AFRICAN REGION 
3.1 Introduction
3.2 Macro economic overview of the southern African region
3.3 The concept of regional financial integration
3.4 Factors influencing capital flows in southern Africa
CHAPTER 4: THE CONSTRAINTS, COSTS AND BENEFITS OF REGIONAL FINANCIAL INTEGRATION IN SOUTHERN AFRICA 
4.1 Introduction
4.2 Regional constraints to financial integration in southern Africa
4.3 The costs for regional financial integration in southern Africa
4.4 The benefits of regional financial integration in southern Africa
4.5 The financial sector benefits of regional financial integration
CHAPTER 5: INTEGRATION OF THE FINANCIAL SECTOR IN SOUTHERN AFRICA 
5.1 Introduction
5.2 Integration of the banking sector in southern Africa
5.3 Overview of clearance, settlement and payment system in southern Africa
5.4 Integration initiatives on the clearance, settlement and payment systems in southern Africa
5.5 Integration strategy for the clearance, settlement and payment systems in southern Africa
5.6 Integration of the equity market in southern Africa
CHAPTER 6: MONETARY POLICY INTEGRATION IN SOUTHERN AFRICA 
6.1 Introduction
6.2 The concept of monetary policy integration
6.3 Global experiences of monetary integration
6.4 African experience of monetary integration
6.5 Monetary integration developments in southern Africa
6.6 Macro economic convergence in the European Monetary Union (EMU)
6.6.1 Choice of macro economic convergence targets in the EMU
6.7 Performance of the European Union (EU) prior to the establishment of the EMU
6.8 Macro economic convergence development in southern Africa
6.9 Monetary integration challenges for southern Africa
6.10 Summary
CHAPTER 7: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 
7.1 Summary
7.2 Conclusions
7.3 Recommendations
BIBLIOGRAPHY

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