The Bank of Namibia (BoN) said that the recent new currency conversion agreement with the Banco Nacional de Angola will help improve the trade speed between the two countries which has been declining at Oshikango.
Oshikango which is located at border post between Namibia and Angola in the Northern part was once projected to be the industrial hub of the Northern part areas but over the years the town has recorded a rapid decline in business growth.
Speaking to The Villager last week Bank of Namibia’s Director of Strategic Communications and Financial Sector Development, Ndangi Katoma said the trade between the two countries is no more at the same level as it was hence the interventions.
“The agreement came about because the Bank of Namibia and other stakeholders have been concerned about the decline in trade between Namibian and Angola, in particular the once thriving trading business in Oshikango. The agreement will thus further strengthen the economic relations between the two countries,” he said.
With the signing of this agreement, conducting small transactions may be done without using coins not issued by the central banks of Angola and Namibia, thus facilitating trading still limited by the requirement of access to foreign exchange as an intermediate currency.
There have also been fears that once Oshikango start using a multi-currency system it will lead to inflation but Katoma quashed these fears and said that no multi-currency will be used at the border town.
“Oshikango is not making use of multi-currency. What the recently signed agreement allows is for business people and trader to legally export either Namibia Dollar to Angola or the Angola Kwanza to Namibia and exchange them into local currency for trading purposes. This essentially means that a person in Oshikango can now exchange the Angola Kwanza for the Namibia Dollar and do business in Namibia or a person in Santa Clara can exchange the Namibia dollar to the Angola Kwanza and do business in Angola,” he said.
Katoma also gave a hint that these agreement might be extended to other part of the country saying, “The conversion of the currencies will be applicable only to the border towns of Oshikango and Santa Clara, and the two Central Banks will continue this engagement to ensure the success thereof. The possibility of extending the agreement to other towns along the border will be investigated and such results will be addressed accordingly.”
He added that, “The agreement will only come into effect six months after the date of signing. This is to allow necessary arrangement and systems to be put in place by involved institutions.” Oshikango forms a valuable part in the cross border trading operations between Namibia and Angola to the north.
Primarily an economic town, its streets are lined with china shops with construction and manufacturing companies lending contributions to industry. In spite of this, Oshikango remains a fairly unstable town with a high crime.
The signing was witnessed by the acting governors of Cunene, António dos Santos Candeeiro and of the Ohangwena region (Namibia), Usko Nghaamwa, entrepreneurs from both countries and representatives of chambers of commerce of Angola and Namibia.