SANTA CLARA, Angola – Trading in the Angolan kwanza at Oshikango in Namibia and using the Namibian dollar in Santa Clara, Angola, would commence in the next six months, once bank personnel have been trained on security features of the two currencies, and relevant banking infrastructure are in place.
This was said after the signing of the Currency Conversion Agreement between Bank of Namibia governor Ipumbu Shiimi and Banco Nacional de Angola (BNA) governor Jose de Lima Massano at Santa Clara, Angola, on Monday this week.
“This is indeed a first step in that the conversion of the currencies under this agreement will be applicable only to the border towns of Oshikango and Santa Clara. The possibility of extending the arrangement to other towns along the border will be investigated at a later stage,” said Shiimi.
The agreement will allow business people and traders to legally export either the Namibian dollar to Angola or the Angola kwanza to Namibia and exchange them into local currency for trading purposes. Its use would be limited to the two border towns that mirror each other – Oshikango in Namibia, and Santa Clara, Angola.
The possibility of extending the arrangement to other towns along the border will be investigated and such results will be addressed accordingly, according to Shiimi.
“Establishing the currency exchange agreement is not only a way of integrating these two communities that have long historical ties but we are also marching towards fulfilling socio-economic developments for our countries,” said Massano
Research by the Bank of Namibia showed that trade between Namibia and Angola was conducted in US dollar and a shortage of the US dollar contributed to the decline in trade.
They also realised the need to create the necessary platforms, including payment system infrastructures that will enhance trade among the two countries’ inhabitants. This prompted the Bank of Namibia to engage the Banco Nacional de Angola to look at the possibility of entering into a Currency Conversion Agreement, negotiations that took five years.
The Namibia Chamber of Commerce and Industry’s (NCCI) northern branch chairperson Tomas Iindji who was also present at the signing ceremony said the agreement came at a time when business relations between Namibia and Angola were strained due to the unavailability of a smooth system to facilitate cross-border trade.
“Oshikango, the once popular lucrative business centre in the region has suffered an economic slump over the past four years and abandoned buildings are a testimony to this,” he said.
Iindji said the agreement will allow further mutual conversion of the national currencies of Angola and Namibia with the objective of reviving and stimulating trade between the two sister countries. On the other hand, it will allow business people and traders to legally export the Namibian dollar and the Angolan kwanza to the two countries and exchange it into local currency for trading purposes.