Address by Dr Chris Stals, Governor of the South African Reserve Bank, at the Annual Award Dinner of the Botswana Institute of Bankers Gaborone.1. Introduction The major political reforms in South Africa that culminated in the democratic election for a new Government of National Unity in April 1994, introduced a new era of economic relations between South Africa and other countries on the African continent. These relations were for many years constrained by political differences and both South Africa and the other countries were frustrated in their efforts to benefit from the normal development of extended economic relations between nations. The removal of these barriers by the events of 1994 brought South Africa face to face with the harsh realities of Africa. Many South Africans only now recognised that on the African continent, stretching from Cape Town to Casablanca, there were more than 50 countries; there existed massive poverty and there was a desperate need for enhanced economic development. Furthermore, the new South African situation itself, perhaps better understood and better exposed in the light of a new realism, also fostered new expectations and reared more urgent demands for an improvement in the living conditions of the millions of South African people living below the poverty line.Initially, the challenge seemed to be an over whelming one. The complexities of the situation were further deepened by the existence of a number of associations or groupings of countries on the continent created in previous initiatives towards greater economic co-operation amongst the African nations. The new South African Government was confronted with the difficult decision of where South Africa belonged in this myriad of associations and arrangements.The Organisation for African Unity (OAU) provides a useful forum for political co-operation over the whole spectrum of African nations. The African Development Bank (ADB) provides a convenient vehicle, although in need of a major overhaul, for participation in the economic development process in all African countries. There are the Lomé Convention, establishing a firm relationship between a number of African countries and the European Union; the Preferential Trade Area (now Comesa); the Southern Africa Development Community (SADC) and the Southern Africa Customs Union (SACU), all providing for some form of regional trade co-operation. In the financial sphere, South Africa was invited to join the Association of Governors of African Central Banks, with its three regional subdivisions providing inter alia for an Eastern and Southern Africa Group; the future of the Common Monetary Area, consisting of four countries in Southern Africa, had to be reconsidered, and the opportunity arose for South Africa to join either the English or the French speaking African Groups on the Boards of Executive Directors of the International Monetary Fund and the World Bank. South Africa had to find a niche for itself in all these arrangements, and had to determine its role in the economic development process of the continent. The South African Government of National Unity has made good progress over the past year in extensive negotiations over a wide front on South Africa's future Africa relations. The Government has, for example, in principle decided to join the African Development Bank and difficult negotiations are now in progress on the terms and conditions for South Africa's membership of this important institution. Negotiations with the European Commission on a Lomé-type of association for South Africa with the European Union have reached an advanced stage. Late last year, the South African Government also took the important decision to join the Southern Africa Development Community (SADC)*.* South Africa has now become the eleventh member of SADC. The other ten members are: Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, Swaziland, Tanzania, Zambia and Zimbabwe. The decision to join the SADC is perhaps, at this stage, one of the more important indications of South Africa's keen desire t