Southern Africa’s money just started moving more freely — and South Africa is at the centre of it. The Angolan kwanza has joined the Southern African Development Community real-time gross settlement (SADC-RTGS) system as a settlement currency, in a milestone for regional trade and financial integration.
The development was announced by South African Reserve Bank (SARB) Governor Lesetja Kganyago together with the Governor of the Banco Nacional de Angola, Manuel Tiago Dias.
A System Built and Run in South Africa
The SADC-RTGS system is operated by the South African Reserve Bank, as appointed by the SADC Committee of Central Bank Governors — a quiet but powerful example of South African institutional excellence serving the whole region. Since its inception in 2013, the system has settled transactions exclusively in South African rand, processing R250.7 billion worth of transactions per month, with 15 countries currently participating.
The kwanza is now the second settlement currency on the platform — and more are coming.
“The kwanza’s inclusion supports regional payments modernisation efforts and aligns with the Group of Twenty’s cross-border payment goals of reducing costs, increasing speed and improving efficiency in cross-border transactions,” SARB said.
What It Means for Businesses
The practical benefits land directly on traders’ bottom lines. By enabling direct settlement in kwanza, participants can reduce foreign exchange conversion requirements, lowering transaction costs for businesses and their customers.
“A more diverse set of settlement currencies in the system makes it easier for businesses and customers to transact across SADC countries in local currencies. Faster settlement can also help businesses manage cash flow more efficiently and access funds more quickly when trading across the region,” the Reserve Bank said.
That is especially timely news for the South African exporters who returned from Angola’s FILDA trade fair this week with dozens of fresh trade leads — the plumbing of regional commerce is being upgraded just as the goods start to flow.
More Currencies to Come
The SARB says the intention is to onboard additional regional currencies, such as the Botswana pula, in due course. The multi-currency capability is one of the strategic initiatives to strengthen regional financial integration, promote greater use of local and regional currencies in cross-border trade, and reduce reliance on currencies from outside the region.
“By joining the SADC-RTGS system, a country can enable its currency to play a greater role in regional trade and finance, reduce reliance on foreign currencies and intermediaries, lower the cost of doing business across borders and strengthen its position within the evolving Southern African and African financial landscape,” SARB said, according to SAnews.
Photo: commons.wikimedia.org
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