Angola and Namibia Sign Currency Conversion Agreement

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Angola and Namibia Sign Currency Conversion Agreement

22 SEPTEMBER 2014

Namacunde — The governor of the National Reserve Bank of Angola (BNA), José de Lima Massano, and of the Central Bank of the Republic of Namibia, Hipunbo Shimy, signed, Monday, in Santa Clara, southern Cunene province, a bilateral agreement on currency conversion, in order to facilitate and give greater security to trade between both countries.

The agreement, which comes into force in early 2015, indicates that at a first phase it will focus on the shared border areas between the two countries and will enable the direct exchange between Kwanza (Angolan currency) and the Namibian Dollar in bank branches, exchange houses or other authorized agents in each country, and the central banks will be in charge of disclosing the daily exchange rate of reference.

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.

After signing the agreement, the BNA governor, José de Lima Massano, said this step establishes the right parity terms of both parts between currencies, facilitating the integration of the two communities and promoting relations of friendship and commercial between both countries.

The governor of the Central Bank of the Republic of Namibia, Hipunbo Shimy, stressed that it is a gain for the two peoples and with great benefits for the commercial exchanges, put, with this act, are laying the foundations for economic emancipation, giving greater facility to citizens and businesses to buy goods and services in Namibia and Angola.

The signing was witnessed by the acting governors of Cunene, António dos Santos Candeeiro and of the Oshikango region (Namibia), Usko Nghaamwa, entrepreneurs from both countries and representatives of chambers of commerce of Angola and Namibia.

Source: All Africa

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Very interesting. Most of us live in countries that have a convertible currency. Changing money is quick and straightforward. That is not the case in many sub-Saharan countries. You can change money only illegally, at a large discount. Bigger transactions are handled with export and import licenses and intervention of two central banks that have a common "clearing account". So much bureaucracy and delays and corruption can occur that it is not abnormal to see these countries trading via a convertible currency country.

This agreement is apparently based on the realisation that red tape can be cut for small transactions in border areas. All it requires is some confidence and economic stability on both sides. However, such a step can have an important potential. For convertible currency countries, it is quite normal that half to two thirds of exports go to neighbouring countries and a large proportion of that remains in the border area. I like the apparent confidence of these two countries. I hope their experience is so good they'll do more such agreements.

Peter