De-linking Namibian Dollar from South African Rand

THE Namibia dollar will remain linked to the South African rand for the foreseeable future, although there are plans to change the rules of the Common Monetary Area (CMA) of which Namibia is a member, Deputy Finance Minster Calle Schlettwein said in Parliament on Wednesday.

Prime Minister Nahas Angula had asked during the debate on the Finance Ministry’s budget vote whether the Namibia dollar could be de-linked from the rand.

“The rand is known to be the most volatile currency and volatility is a matter of concern, it prevents economic forecasts,” Angula said. 

“Is there a consideration to de-link our currency from South Africa and maybe link it to the euro or to the [Russian] rouble?”

According to Schlettwein the Namibia dollar will remain pegged to the SA rand. 

“The way we’re going to solve is how to change the CMA or find a democratised solution visa a similar process as was done with the Southern African Customs Union (Sacu). 

Sacu was dominated by one country [South Africa] and was then democratised,” he said. 

Sacu’s revenue-sharing formula was changed to benefit the four smaller member states. 

“It could be done in similar way with the CMA,” Schlettwein said.

Swanu President Usutuaije Maamberua wanted to know how the Ministry would broaden its tax base. 

“It is good that over the past four years the Ministry added N$1 billion each year to its annual revenue collection, but with the shrinking revenue from Sacu by about 30 per cent this year and 52,7 per cent next year, how to diversify the tax income?” the Swanu leader asked.

“We want to broaden and deepen the tax base and grow the number of tax payers. We have very thin base only 300 000 tax payers out of a population of 2,1 million citizens,” Schlettwein replied.

Credit: www.namibian.com.na