Bank of Namibia sets daily limit for Kwanza exchange
Windhoek – Namibia’s Central Bank has set daily limit for Kwanza exchange at the border town of Oshikango, which took effect on July 20, 2015.
In a statement, Bank of Namibia directed that commercial banks and Bureaus de Change at the town, along the Angolan border are only allowed to exchange a maximum of 500 000 Kwanza into Namibian dollar per day, while minors can exchange up to 150 000 Kwanza.
Non-Angolan residents are allowed to exchange up to 250 000 Kwanza and non-resident minors up to 50 000 Kwanza.
The Central Bank has pegged the official exchange rate at One Namibian dollar to Angolan Kwanza 10.8.
As per the current exchange – 12.42 Namibian dollars equals one US dollar.
Following the implementation of the Currency Conversion Agreement at Oshikango and Santa Clara in Angola, Ndangi Katoma, the bank’s head of
strategic Communication and Financial Sector Development said they have observed that there are individuals and business entities who are exchanging the Namibia Dollars and Angola Kwanza currencies contrary to the provisions of the Currency Conversion Agreement.
“Only authorised commercial banks and Bureau de Changes are allowed to exchange Kwanza for Namibia Dollars. No individual or business entity is allowed to exchange or trade in Kwanza unless they are authorised
financial institutions,” he said.
“Dealing in the exchange of Kwanza into Namibia Dollar without authorisation from the Bank of Namibia is a criminal offence and offenders will be dealt with in accordance with the relevant provisions of the Exchange Control Act. The Bank will continue with
investigations into the transgressions of the Currency Conversion Agreement and necessary action will be taken against the offenders.”
Bank of Namibia Governor Ipumbu Shiimi and his counterpart José de Lima Massano of Banco National de Angola in September 2014 signed a bilateral currency exchange agreement that is expected to improve trade between the two Southern African neighbours.
It came into effect on June 18, 2015.
Oshikango, which is part of the Helao Nafindi Town Council in the Ohangewena region, has been considered a business hub in northern Namibia since the 1990s.
Buying power from Angolan customers was behind the economic prosperity of the town, as people from nearby major Angolan towns such as Ondjiva, Huambo, and Lumbago found it convenient and cheaper to shop at
But trading at the town plummeted following the collapse of global oil prices, which negatively impacted the Angolan economy – Africa’s second biggest oil producer.
Oil is the mainstay of Angolan economy, which accounts for about 90 percent of the country’s export earnings.
Therefore, with the official supply of foreign currency greatly affected by the oil price collapse that started in June 2014, the US dollar became hard to access, which has disrupted day-to-day business operations in the country.
And since trade between Namibia and Angola was conducted in dollars as a form of payment, the shortage contributed to the decline in cross border trading at Oshikango.
Now that the Kwanza was not a legal tender in Namibia, business started declining at the border town, as Angolans could not buy goods in their currency other than the US dollars.
“This Agreement aims at enabling the reciprocal acceptance of legal tender banknotes in the Republic of Angola and the Republic of Namibia by the legally authorised financial institutions to conduct foreign currency exchange operations at Oshikango and Santa Clara Border posts. The ultimate aim of the Agreement is to promote and facilitate trade between the Angolans and Namibians at the two border towns,” Katoma explained.