REGIONAL INDIC ATIVE STRATEGIC DEVELOPMENT PL AN implementation of regional development programmes STRATEGIES including the RISDP. • 7 7 Governments can through appropriate financial regulatory mechanisms create the conditions for STRATEGIES sound financial institutions and thereby improve the • Strengthening debt management capacity of Member public trust in the financial institutions such that the States, particularly the HIPC countries in the area of public feels secure to place their savings with coordination between debt and macroeconomic domestic financial institutions. For this purpose, policies, implementation of debt strategies that are further progress in harmonising policy, legal and regulatory frameworks at the regional level should be consistent with the objective of long-term debt encouraged; sustainability, legal and institutional frameworks for debt management; and human and other capacity • a fuller spectrum of financial services to households in constraints; • both the formal and informal sectors as well as in both Promoting the development and application of urban and rural settings. For this purpose, they could standards in areas such as financial reporting, develop and implement programmes to encourage accounting and auditing, and improving the tracking household savings such as through (i) revisiting and effectiveness of budget expenditures, including minimum deposit levels and discretionary admini- those associated with HIPC; and • Financial institutions should be encouraged to provide strative fee structures in order to encourage small SADC could through NEPAD and other fora lobby for savers to use the formal financial sector institutions; enhanced debt relief and encouragement of creditors and (ii) advertising campaigns; and outside the HIPC Initiative to participate in this • framework. Government should encourage, directly and indirectly, the development of the microfinance sector to provide sustainable finance for the informal sector and 5.2.4 Domestic Savings and Investment financial services to the poor. On a regional level, Savings and investment are central determinants of the information on best practices on policy and regulatory rate and pattern of economic growth. In increasing frameworks for microfinance; domestic savings and using the resources in productive Member States should be encouraged to exchange • Harmonisation of policies and regulatory frameworks domestic investments SADC economies will strengthen at the regional level should be encouraged in order to the region's prospects for accelerated economic growth, create a larger market for microfinance industry. poverty eradication and sustainable development. With regard to increasing domestic savings, fundamental conditions include the sound management of macroeconomic and budgetary polices. Furthermore, well developed and functioning financial markets and TARGET • Increase the ratio of gross domestic savings to GDP to 20% and the ratio gross domestic investment to GDP to 25% by 2015. systems encourages savings. Effective protection and security of deposits for the general public through government regulation increases the tendency to save. The region is characterised by large informal sectors whose activities and assets are unrecorded and which are 5.2.5 Foreign Direct and Portfolio Investment Efficiency- and market-seeking foreign direct investment flows into SADC remain small, as the region has not as yet succeeded in attracting these types of investments into also fragmented and/or segmented in terms of financial the region. Fast tracking market integration to overcome markets and services. Part of the problem stems from the the small size of the national markets and limited effective high transaction costs of the private banking and non- demand is essential. Similarly, efficiency-seeking banking institutions to provide financial services to the investment requires adequate and efficient infrastructure informal sectors, including emerging entrepreneurs, and services, a workforce with skill levels that allow for timely poor households. and cost-efficient production and delivery of goods to