WINDHOEK — Namibians sending money to South Africa via electronic fund transfers (EFT) will now incur higher bank fees and experience longer processing times. The new changes are a consequence of recent regulatory adjustments within the Common Monetary Area (CMA), which have ceased the facilitation of EFT payments and collections starting from 30 September 2024.

According to Namibia Press Agency, the decision to discontinue EFT transactions within the CMA, originally set for 9 September, was extended to allow more time for adjustment. The Common Monetary Area, which encompasses South Africa, Namibia, Lesotho, and Eswatini, forms a monetary union which will undergo significant changes in how transactions are handled. These changes not only increase transaction costs but also prohibit debit order deductions to and from South Africa.

In a statement to Nampa, Henock Shilongo, the Principal Economist for Payments, Policy Research and Analysis at the Bank of Namibia, outlined that the bank has issued directives to ensure that funds sent from South Africa or other CMA countries are received within two business days. “This is to ensure that Namibian banks do not unreasonably delay the processing of inward payments to their customers,” Shilongo explained.

Further, the central bank has regulated banking charges for both outward and inward cross-border payments. Fees for outward cross-border payments have been capped at N$20 for transactions below N$1 million and N$30 for transactions between N$1 million and N$5 million. Similarly, fees for inward cross-border payments are capped at N$25 for transactions below N$1 million and N$35 for transactions between N$1 million and N$5 million.

Shilongo emphasized that these measures are part of a broader effort to combat financial malpractices such as money laundering and tax evasion, particularly as Namibia remains greylisted. “We are thus trying to fight money laundering and tax evasion. We will now be able to properly monitor these transactions because most of the companies were using this loophole to disguise payments to and from SA, and we were missing out on import duties and tax,” he stated.

The new directive will not impact the Namibia Dollar’s pegging to the Rand, nor does it affect the proposal of a unified currency and African Monetary Union (AMU) by the African Union, administered by the African Central Bank.