. Lowering interest rates and, thus, the cost of borrowing in the rand zone (Lesotho, Namibia, Swaziland and South Africa) is a priority to promote investment and economic growth.
. Local-currency interest rates in these countries are driven by those on rand-denominated transactions. Reducing the level and volatility of the rand premium would help reduce ?nancing costs in the region.
. Policies should promote: enhancing ?nancial-market liquidity; easier access to South African ?nancial markets for African entities; domestic saving capacity; and the improvement of international perception of the rand.
. Johannesburg could become a ?nancial “hub” for the region, channelling cheap resources to its neighbours.
Which Policies Can Reduce the Cost of Capital in Southern Africa ?
Policy paper
OECD Development Centre Policy Briefs
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Abstract
In the same series
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11 March 2008