(Wakeman-Linn andWagh, 2008). These include: the Southern African
Development Community (SADC); the Southern African Customs Union
(SACU); the CommonMarket for Eastern and Southern Africa (COMESA);
the Arab Maghreb Union (UMA); the Central African Economic and
Monetary Community (CAEMC); the East African Community (EAC);
and the Economic Community of West African States (ECOWAS) as
documented by the African Development Bank (2010) and Ahmed
(2011). Besides being a member of SADC and SACU, Botswana is also a
member of international bodies like the World Trade Organisation
(WTO), International Monetary Fund (IMF) and United Nations (UN).
From both the theoretical and empirical literatures, regional financial
integration is considered necessary because: (i) it motivates countries
to upgrade their financial reforms; (ii) it induces productivity
and efficiency through competition with outside markets; (iii) it increases
foreign direct investment (FDI) inflows; and (iv) it enables
small African markets to trade regionally and globally, thus providing
greater opportunity for growth (African Development Bank, 2010).
Being a member of regional financial integration bodies, countries
may benefit from the envisaged free trade areas (FTAs) and Economic
Partnership Agreements (EPAs) that are ongoing between Africa, the
European Union and the rest of the world. Through these channels,
regional integration and international financial integration are expected