Angola honours repayment agreement with BoN

30 Sep 2016 23:10pm
By Etuna Shikalepo
WINDHOEK, 30 SEP (NAMPA) – The Bank of Namibia (BoN) remains positive on the deal with its Angolan counterpart, as Namibia has so far received about US.dollars 80 million (about N.dollars 1 billion) from the currency conversion deal with the Banco Nacional De Angola (BNA).
The BoN and BNA entered into an agreement on 18 June 2015 to allow the exchange of the Angolan Kwanza for the Namibian Dollar at Oshikango in northern Namibia, in an effort to maintain the momentum of business transactions between the two countries.
After a suspension on 02 December 2015, the agreement was on 21 December that year diverted to Santa Clara in southern Angola only, due to irregularities experienced at Oshikango in the form of illegal currency traders popping up all over the border town.
The two central banks agreed for the BNA to repay the BoN repurchase costs for Kwanzas that have come and gone through Namibia since the agreement was implemented on 18 June 2015.
As per agreement, the BNA has to pay the BoN about US.Dollars 426 million (about N.dollars 5.8 billion) in quarterly instalments, with a remainder of US.Dollars 346 million (about N.dollars 4.7 billion) expected by 2019 when the agreement expires.
BoN Director for Strategic Communications and Financial Sector Development Emma Haiyambo told Nampa on Thursday the last payment received by the BoN was 27 September 2016, without disclosing the exact amount.
Angola has been experiencing severe economic problems with the volatility of the oil market, and speculation is rife that it is the reason why the BNA has been struggling to repay the BoN timely on the deal.
Haiyambo said the repayment agreement stipulates that the final date of repayment will be March 2019 and despite the economic difficulties experienced by the Namibian neighbour, the BoN is positive that the deal will yield the desired results.
“The Bank of Namibia regards the agreement with BNA in a very positive light, given the main objective of the agreement which is to resuscitate trade between the two border towns (Oshikango and Santa Clara), which was achieved despite the fact that the economic downturn makes it difficult for Angolan nationals to export currency,” she said.
Haiyambo explained the agreement was not a short-term solution but rather a long-term one, adding the two central banks will continue looking at ways of how to refine the implementation thereof.
While considering the current fiscal distress experienced in Angola with more oil on the global market and the price of a barrel having dropped significantly, Haiyambo said the BoN has learnt a lesson that when implementing this type of agreement during a period of economic downturn, it is bound to pose some challenges.
However, she stated that the BNA is honouring its payments in line with the signed repayment schedule.
Haiyambo agreed that there have been some delays in repayment, however this will not necessarily affect the liquidity of Namibia negatively or will lead to the income of the BoN being impaired.
“The BoN does not expect this to happen as the Banco Nacional de Angola has made commitment to pay and they continue to do so as evidenced by the latest payment effected on 27 September 2016,” she noted.