Bon Approves Kwanza Purchases in Namibia

The business sector has welcomed the announcement of a soon-to-be signed agreement that will allow Angolan traders to make their purchases in Namibia with Angolan Kwanzas and for Namibian traders to purchase goods in Angola with Namibian dollars.

“We fought for this for the last five years. This is a major, major development as far as our trade with Angola is concerned,” an obviously ecstatic chief executive officer of the Namibia Chamber of Commerce and Industry (NCCI) Tarah Shaanika said yesterday afternoon.

Equally elated by the news was the former trade ministry deputy permanent secretary Nghidinwa Daniel, who called the agreement a “pioneering move”.

Daniel, who spoke in his personal capacity, is now the Permanent Secretary in the Ministry of Regional and Local Government, Housing and Rural Development, and was one of those involved in negotiating for bi-lateral agreements with Angola. “It is really a pioneering move [to have a currency conversion] negotiated in such a flexible manner,” he said.

Bank of Namibia is set to sign a currency conversion agreement with the National Bank of Angola (Banco Naccedilional de Angola) on 22 September in Santa Clara, the Angolan town mirroring Oshikango across the borderline at Oshikango border post. The agreement will allow Angolan nationals who trade in Namibia to legally bring Angolan Kwanza into Namibia and exchange it into Namibian dollars for trading purposes. Namibians can also take the Namibian dollar into Angola and exchange it into Kwanza for trading purposes.

Bank of Namibia says the reciprocal conversion of the national currencies of Angola and Namibia would “revive and stimulate trade between the two countries”, as well as “strengthen economic relations”.

NCCI president Sven Thieme was overjoyed yesterday telling New Era: “We are very excited about this development and this will further strengthen trade between the two countries which can help boost the [two] economies.”

Since 2009 the Namibian business sector, led by the NCCI, together with a group of pro-active Angolan businesspeople at Oshikango, have been pushing for Namibia and Angola to accept the proposal that eliminates the need for a third currency, the US dollar, saying such a move would increase liquidity and market efficiencies.

This prompted the Bank of Namibia to conduct research on trade constraints at Oshikango border post in 201011 and it began work on the integration of the two countries’ payment systems and currency exchange between the Namibian dollar and the Kwanza. The proposal from that research – how trade can be enhanced between the two countries – was taken to the National Bank of Angola, Bank of Namibia confirmed in 2012.

Namibia and Angola have been lagging in ratification and implementation of a number of trade protocols – at one point Article 10 of the 2004 bilateral trade agreement became so pressing that exports of specific commodities were prohibited from entering Angola overnight and politicians had to work around the clock to remedy the situation. Article 10 of the Bilateral Trade and Economic Cooperation Agreement provide for the establishment of a Joint Trade Committee (JTC).

However, there seem to be a revival of the trade relations between the two countries, as shown by the exuberance of the Minister of Trade and Industry Calle Schlettwein who returned from Angola last week saying the trade ministers of Angola and Namibia were tasked to finalize the terms of reference of the JTC for it to start functioning. “It is important for us to firm up on the practical actions necessary to expedite the implementation of the agreement,” Schlettwein said.

Schlettwein and Angola’s Minister of Commerce, Rosa de Matos, signed the terms of reference of the JTC, which will now guide technical officials to look into issues of trade and investment and provide reports for policy guidance and decisions. These issues include market access for export products of both countries, issues surrounding the movement of goods across borders, investment and joint-venture partnerships, amongst others.

Source : New Era