Namibian citizens will be able to shop and pay for services in Namibian dollars in Angola in the future.
This measure once considered will also allow Angolan citizens to carry out commercial transactions in their currency in Namibian soil – is the result of a memorandum of understanding signed last week by the central banks of both countries.
The MoU will explore such opportunities in the future to reduce the inconvenience of Kwanza-Nam Dollars exchange.
The document was signed on the Namibian side by Johannes !Gawaxab, governor of the Bank of Namibia, and, on the Angolan side, by Jose de Lima Massano, governor of the National Bank of Angola (BNA).
At the time, Lima Massano said that they understood “to take a bigger step”, not just wanting “just the cash”, that is, the exchange of the kwanza for the Namibian dollar, but also having “more modern payment instruments”.
“What e want is to take a bigger step, not just cash, the exchange of the kwanza for the Namibian dollar, but having more modern payment instruments, including debit cards from the multicaixa network and also allowing commercial transactions as resources letters of credit can happen in the currency of the countries,” said the governor of the BNA, quoted ANGOP.
Massano also said that the path being carried outis “a technically more demanding path” because they want “the payment infrastructures to work and dialogue, allowing transactions to take place quickly, safely”.
“The decision we took was tohave the kwanza as the currency of the payment system in our region. We will start with Namibia, but our intention is to have the kwanza as a payment currency in our region,” he added.
Regarding the intention of creating a single currency for the Southern Africa Development Community(SADC) region, the governor considered that it was a process that would take time, “but in the meantime, the region has a payment system which, at the moment, has currency – rand, and the intention is to have other currencies from the countries that make up the region and the kwanza wants to be one of these currencies. The process has already started, as soon as we have it.”
Also speaking on the occasion, !Gawaxab said that the memorandum focuses on facilitating trade and illicit capital flows. “We have the issue of illicit capital flows, working groups are being set up to adjust matters in relations to facilitation and illicit capital flows,” he said.
!Gawaxab said the two central banks have agreed to formally establish their collaboration and partnership as part of efforts to improve their bilateral relations. “In this regard, the institutions have agreed to focus on effective utilisation of the existing regional cross-border payment systems as well as exploring retail payment options such as prepaid cards for the payment of goods and services. Other solutions being explored are trade related guarantees between banking institutions of the two countries,’ he said.
Last year the two institutions agreed to collaborate on various fronts, to further their respective price and financial stability mandates as well as execution of strategies to modernise national financial systems.
KazembireZemburuka Director of Strategic Communications and International Relations at BoN said the two central banks have prioritised trade facilitation through payments system integration enabled by digital capabilities as a means of realising the efficient movement of goods and services between the two countries.
He added that the strategic focus area of the partnership is the elimination of revenue leakages for the respective countries by providing timely and accurate data and empirical evidence in terms of misaligned trade data to the detriment of revenue mobilization.
Additionally, he stated that in order to aid in mitigation efforts, the central banks will share data and research on trade and associated financial transactions.
“Furthermore, sharing of knowledge on financial inclusion initiatives will be prioritised to ensure that the peoples of both countries have access to quality, affordable and a broad spectrum set of financial services.
Although both countries acknowledged that the defunct currency conversion agreement which previously allowed the exchange of currencies at the border towns was beneficial, the two central banks have ruled out the activation of this conversion agreement at present as more convenient and cost-effective methods to facilitate trade are being prioritised,” Zemburuka stated.