Currency Convertibility and External Reserves

Abstract

This is a topic of potential and growing importance to Africa as a whole, but especially to Southern Africa. The paper is intended to be both introspective (examining the current position in the region in these areas) and prospective (where the region should be going as the 21st century dawns). It looks, first, at the question of currency convertibility, making clear distinctions between this and other forms of convertibility; secondly, at the principles and objectives of external reserves; thirdly, at the interface between, and implications for, currency convertibility and the management of external reserves; and lastly, at specific proposals for the future of Southern Africa. Eight Southern Africa countries are examined: Botswana, Lesotho, Mauritius, Namibia, South Africa, Swaziland, Zambia and Zimbabwe.