Given Angola’s precarious fiscal state, it comes as no surprise that it has done little to reduce its debt to Namibia following the disastrous currency conversion deal last year that left that country owing Namibia N$6.1 billion (US$386 million). According to the deal, the Angolan Kwanza could be exchanged at Namibian banks and bureaux de change. Angola has so far paid Namibia only N$588 million. The deal, which was signed with Angola’s Banco Nacional De Angola, was stopped on December 2 last year following irregularities at Oshikango border post and heavy criticism by local economists and local business people, who argued that it had effectively run the N
amibian economy into a liquidity crisis within the first five months of its implementation. As the Namibian media reported earlier this year, this prompted the Bank of Namibia to cancel the deal in a mutual arrangement with Angola. As Ndangi Katoma, Director: Strategic Communications at Bank of Namibia, said at the time: “The Currency Conversion Agreement between Namibia and Angola is still in place through a new implementation mechanism, which commenced on 21 December 2015. This new mechanism entails that the Bank of Namibia issue the Namibia Dollars to Banco Nacional de Angola (BNA). BNA then facilitated currency exchange at commercial banks and bureau de changes in Santa Clara in Angola. This means that contrary to the earlier arrangement, this is a cash-based arrangement, which does not attract any repayment arrears.”
There is, however, still an outstanding balance of US$386 million that resulted from the amount of money exchanged at the start of the agreement when currency used to be exchanged at the border town of Oshikango. Banco Nacional de Angola has apparently committed to a payment schedule of quarterly instalments to settle US$390 million repurchase costs for Kwanzas that have come and gone through Namibia. Although the Bank of Namibia did not respond to enquiries by the time of going to press, it may safely be assumed that Angola has not made any further repayments as the country is currently one a precipice following the decline in the price of oil. This has left the country with little hope of balancing its books and it is deemed very doubtful that the authorities have kept up the promised repayments.