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Namibia Can Protect Its Financial System – !Gawaxab …as South Africa encounters grey listing from FATF

By:Justicia Shipena
Bank of Namibia (BoN) governor Johannes !Gawaxab says Namibia is better positioned to safeguard its interests and protect its financial system.
!Gawaxab said this is due to its demonstrable political will and widespread support from stakeholders.
The BoN governor’s remarks follow after Namibia’s neighbouring South Africa was recently greylisted by the Financial Action Task Force (FATF).
FATF is an intergovernmental body that sets global standards to combat money laundering and terrorist financing.
The greylisting of South Africa is expected to hike the cost of doing business in the country by increasing the amount of due diligence companies have to carry out.
However, !Gawaxab on Tuesday said Namibia has seen countries close to Namibia successfully exiting the heightened surveillance through resolute commitment and action from stakeholders.
He encouraged investors to regard Namibia as a safe investment destination.
“The enforceability of our legal framework is undeniable, thanks to our strong institutions and independent judiciary. We reassure Namibians and our valued stakeholders all over the world of our commitment to fight financial crimes and that our financial system is robust and will be in better shape at the end of these interventions,” he assured.
The central bank in a press statement issued by its Director of Strategic Communications and International Relations Kazembire Zemburuka said Namibia’s financial transactions with the rest of the world and capital flows to and from the jurisdiction should continue uninterrupted.
However, he said it should be subjected to the current treatments and controls based on its merits.
He expressed that Namibia is making steady progress in addressing findings related to its anti-money laundering and combating the financing of terrorism and proliferation framework (AML/CFT/CPF).
Zemburuka emphasised that Namibia is going to great lengths to meet the deadlines in order to avoid the country from being greylisted after the current 12-month monitoring period expires.
“Namibia has shown significant political commitment to meeting the FATF requirements. To avoid greylisting, the cabinet has directed institutions and stakeholders to implement an action plan adopted in December 2022,” Zemburuka pointed out.
He further said proposed legislative changes have been made, and public consultations on the gaps in relevant laws that should be benchmarked to the best international standards are underway.
He also stressed that enforcing applicable laws to combat financial crime is another area under scrutiny.
“In this regard, the relevant laws must pass Parliament before the country’s post-evaluation progress review report is submitted at the end of July 2023,” he said.
On South Africa’s greylisting, he stated that relevant financial and non-financial institutions worldwide, including those in Namibia, must exercise increased caution when dealing with transactions or clients with ties to such jurisdictions.
In this light, Zemburuka said this does not imply quitting or de-risking.
“But rather taking the necessary precautions to reduce this risk to acceptable levels.”
Meanwhile, FirstRand Namibia’s Group economist Ruusa Nandago says Namibia does not expect any large or direct impact from an economic and financial stability perspective given the greylisting in South Africa.
Nandago said the only way it could impact Namibia will probably be for financial institutions or businesses that make use of the South African financial system to do payments or financial transactions.
“Generally, we make use of our own institutions. So, we don’t really expect an impact. I think the impact would be if we had been greylisted then for us it will impact us similar to South Africa,” she said.
She added that because the greylisting is quite new for South Africa there is sort of uncertainty around whether there is actually a massive economic impact on financial stability.
“It is obviously something analysts and the financial industry would monitor over time. The view is that the impact will be more on an institutional level in Namibia and we don’t expect significant impact,” she said.
Nandago also said the listing can affect the businesses, albeit indirectly.
“It does as they need to use the financial system to clear their trade transactions. So it does affect them in that sense.”

Justicia Shipena

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