Cross-Boarder use of Kwacha Shilling to Upgrade Commerce at Boundary between Tanzania and Zambia
By Abdul Rahman Suagibu –
NEW AFRICA BUSINESS NEWS ( NABN ) Freetown, Sierra Leonne- The Tunduma-Nakonde merchants at one-stop border post could utilize Tanzanian and Zambian cash on each side of the border without having to change them, thankfulness to a fresh treaty to shave inconveniencies in a bid to promote trading movements.
In this respect, on the verge of 2018 Tanzania and Zambia inscribed a Memorandum of Understanding (MoU) for convertibility and repatriation of their currencies.
On February 27th, 2020, a geriatric bank official from Bank of Tanzania (BoT) stated that, the conversion and repatriation of Tanzanian shilling and the Zambian Kwacha; is adjusted to accelerate trading between the people of the two neighboring states and prevent informal foreign exchange. Currency convertibility relates to the issue with which a country’s currency can be converted into gold or another currency.
Similarly, repatriation refers to converting any foreign currency into one’s local currency. Both convertibility and repatriation are vital scheduled to business understandings, foreign investments, or international travel. Official liftoff of the exercise will be clenched on Friday February, 28th 2020. Bank of Tanzania (BoT) Governor Professor Florens Luoga and his Bank of Zambia counterpart, Dr. Denny Kalyalya would be in attendance to climax the occasion.
BoT’s Mbeya Branch Director, Mr. Ibrahim Malogoi explained that, the move will enable traders from Tanzania and Zambia to expend each country ’s currency to purchase goods and service.
“What we have been doing during the past two weeks is to sensitize traders on what the arrangement means and why it matters to them. We have also been educating them on how to identify genuine currencies of the two countries,” he noted.
He confessed, the consensus was in line with an approval by member states of the Southern African Development Community (Sadc) on how to streamline trading in borders. He said it was encouraging that even before its official blastoff, people in the two nations were already making use of the enterprise.
“Banks from either side of the border are already receiving both currencies.
This means that, when a Tanzanian trader goes to Nakonde, he will not be compelled to change his/her money into Kwacha to make a transaction. Similarly, when a Zambian comes to Tunduma, he/she will not be obliged to change his/her Kwacha into Shilling to make a transaction,” he said.
A manager at NMB Bank at Tunduma, Mr Fadhili Masanga stated, financial institutions were ready for the currency convertibility and repatriation, asserting that, the benefits of
the exercise will be felt to traders. CRDB Bank Manager at Tunduma branch Crispin Kombo let out that, the exercise will increase money circulation at the border point
The Tunduma-Nakonde is Tanzania’s briskest border point, linking Dar es Salaam, Lusaka (Zambia), Lubumbashi (DRC) and by expansion to Harare in Zimbabwe.
It is computed that, over 70% of goods in transit from the Dar es Salaam, pass through the Tunduma-Nakonde border. On regular, the usefulness of cargo passing through the border to a number of destinations in Zambia, DRC, and Zimbabwe is totaled at $1.5 billion per annum.
Between 2012 and 2017, the total value of trade between Tanzania and Zambia going through the border averaged about $180 million per annum.
For New Africa Business News (NABN) Abdul Rahman Suagibu Reports, Africa Correspondent
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