SA coins in Nam explained

Bank of Namibia (BON) this week spoke out on the tabling of the Bank of Namibia Amendment Bill in Parliament and the issue of South African currency being used as legal tender in Namibia.

Section 26 of the Bank of Namibia Act, 1997, Act No. 15 of 1997, already gives the Minister of Finance the power to allow South African notes and coins to serve as legal tender in Namibia, until at a date to be determined by the Minister, Tom Alweendo, governor of the BON explained. The aim of Clause 8 of the Bill, which seeks to amend Section 26 of the Act is to make provision for doing away with the legal tender status of South African coins in Namibia, he said.The proposed amendment to the Act was merely to amend the words “notes and coins” to “notes or coins”.The amendment seeks to demonetize only the South African coins in Namibia.The justification for disqualifying South African coins as legal tender is to do away with the dual circulation of coins in Namibia, said the central bank’s governor.Moreover, the cost of repatriating these coins to the South African Reserve Bank, which is borne by the Bank of Namibia, has increased tremendously over the past years because of the weight of consignments and the high security and insurance costs, he added.Even once the Minister has determined the date on which South African coins will cease to be legal tender in Namibia, the public would still have a two-year period in which they will be allowed to exchange such coins for Namibian coins at commercial banks, Alweendo explained.”It should be emphasized that the decision to demonetise South African coins over time was taken purely to ease the operational burden on the banking system and to facilitate the day-to-day cash transactions.This decision should not be seen as a move by Government to lessen our linkage to the South African Rand and our relationship with the Common Monetary Area,” he said.The aim of Clause 8 of the Bill, which seeks to amend Section 26 of the Act is to make provision for doing away with the legal tender status of South African coins in Namibia, he said.The proposed amendment to the Act was merely to amend the words “notes and coins” to “notes or coins”.The amendment seeks to demonetize only the South African coins in Namibia.The justification for disqualifying South African coins as legal tender is to do away with the dual circulation of coins in Namibia, said the central bank’s governor.Moreover, the cost of repatriating these coins to the South African Reserve Bank, which is borne by the Bank of Namibia, has increased tremendously over the past years because of the weight of consignments and the high security and insurance costs, he added. Even once the Minister has determined the date on which South African coins will cease to be legal tender in Namibia, the public would still have a two-year period in which they will be allowed to exchange such coins for Namibian coins at commercial banks, Alweendo explained.”It should be emphasized that the decision to demonetise South African coins over time was taken purely to ease the operational burden on the banking system and to facilitate the day-to-day cash transactions.This decision should not be seen as a move by Government to lessen our linkage to the South African Rand and our relationship with the Common Monetary Area,” he said.