The Angolan kwanza has become the first currency to join the South African rand on the Southern African Development Community’s (SADC) regional payment system, ending the rand’s exclusive role in settling cross-border transactions after 13 years.
The move marks a significant step towards creating a multi-currency settlement platform for businesses trading across the region.
Kwanza added to SADC payment system
Since the SADC Real-Time Gross Settlement (SADC-RTGS) system launched in 2013, all cross-border transactions have been settled exclusively in South African rand.
The addition of the kwanza makes it the second settlement currency accepted on the platform and represents the first expansion beyond the rand.
The announcement was made by South African Reserve Bank (SARB) Governor Lesetja Kganyago, who chairs the SADC Committee of Central Bank Governors, alongside Banco Nacional de Angola Governor Manuel Tiago Dias.
Lower costs for regional trade
The SADC-RTGS is an automated interbank payment system used by authorised banks and financial institutions to settle cross-border payments. It is operated by the SARB on behalf of participating SADC central banks.
Allowing direct settlement in Angolan kwanza reduces the need for multiple foreign exchange conversions when businesses trade with Angola.
According to the SARB, this has the potential to:
- Reduce foreign exchange conversion costs.
- Speed up payment settlements.
- Give businesses quicker access to their funds.
The central bank noted that the actual savings will depend on how participating banks price and offer the new service.
Regional payment network continues to grow
Fifteen countries currently participate in the SADC-RTGS system.
In June alone, the platform processed:
- 156,530 transactions
- R250.7 billion in cross-border payments
The introduction of the kwanza does not create a new payment service for consumers. Instead, it expands the currencies financial institutions can use when settling obligations through the existing regional platform.
More SADC currencies could follow
The SARB said additional regional currencies are expected to be introduced over time, with the Botswana pula identified as a possible next addition.
The expansion forms part of a broader strategy to modernise cross-border payments within SADC and reduce reliance on currencies outside the region.
Kganyago said each new currency requires support from its central bank to provide liquidity if required, which is why currencies are being introduced gradually rather than all at once.
For businesses trading with Angola, the immediate benefit is an alternative settlement option that no longer relies solely on the South African rand.
Read SA Business Integrator online
