Modelling Monetary Union in Southern Africa: Welfare Evaluation for the CMA and SADC.

This paper proposes a quantitative assessment of the welfare effects arising from the Common Monetary Area ( CMA) and an array of broader groupings among Southern African Development Community ( SADC) countries. Model simulations suggest that ( i) participating in the CMA benefits all members; ( ii) joining the CMA individually is beneficial for all SADC members except Angola, Mauritius and Tanzania; ( iii) creating a symmetric CMA-wide monetary union with a regional central bank carries some costs in terms of foregone anti-inflationary credibility; and ( iv) SADC-wide symmetric monetary union continues to be beneficial for all except Mauritius, although the gains for existing CMA members are likely to be limited. [ABSTRACT FROM AUTHOR]