The CMA, enacted in July 1986, originated from the Rand Monetary Area (RMA), which was formally established in December 1974; the signatories of the latter were South Africa, Lesotho, and Swaziland. In that year Swaziland and Lesotho established their own national currencies, now called the
lilangeni and the loti, respectively. In 1980 Lesotho established its own central bank and began issuing its national currency at a one to one rate to the rand. While the formal arrangements date back to 1974, they ultimately stem from informal arrangements spanning back to prior to the formation of the
Union of South Africa in 1910 and when the
South African Reserve Bank was formed in 1921, the
South African pound became the sole circulating legal tender in the territories that today form the CMA alongside
Bechuanaland (now Botswana). This arrangement continued when the South African pound was replaced by the South African rand in 1961. The lack of monetary policy discretion, a formal framework for consultation and sharing of
seigniorage by South Africa for the smaller territories led to protracted negotiations which ultimately resulted in the formal 1974 agreement, however Botswana decided against joining the formalized arrangements and pursued an independent currency with its own central bank. In 1989 the CMA changed its exchange restrictions because of some limitations in the conversion of balances consequence of the termination of the agreement of one party. The CMA was replaced by the present Multilateral Monetary Area (MMA) in February 1992, when Namibia formally joined the monetary union. In 1993 Namibia issued its own currency, the
Namibian dollar. In 2002 a new revenue-sharing formula was introduced in SACU, which included a development component. In 2003 Swaziland reauthorized the use of the
rand as legal tender in the interest of facilitating exchange between these countries. == Institutional framework ==