South Africa expands cross-border payments with Angolan Kwanza

South Africa has expanded its regional cross-border payment infrastructure by adding the Angolan kwanza to the Southern African Development Community’s real-time gross settlement system, marking the first new settlement currency introduced since the platform launched in 2013.

The move gives businesses and banks a new option for settling cross-border transactions and strengthens efforts to reduce the cost and complexity of payments across Southern Africa.

Kwanza opens new route for regional payments

The SADC-RTGS system enables real-time settlement of cross-border transactions among participating banks across the region. It was designed to support trade and investment while replacing more expensive correspondent banking arrangements for regional payments.

Speaking at a press briefing in Pretoria alongside Banco Nacional de Angola Governor Manuel Tiago Dias, South African Reserve Bank Governor Lesetja Kganyago described the kwanza’s inclusion as evidence of regional financial integration. “The introduction of the kwanza is a demonstration of regional integration in action,” Kganyago said.

He added that the move “strengthens regional financial connectivity” and demonstrates that Africa can develop sophisticated financial market infrastructure built around its own priorities.

The South African Reserve Bank said the kwanza’s inclusion supports the G20’s cross-border payment goals of reducing costs, increasing speed and improving efficiency. Direct settlement in kwanza can also eliminate the need for double foreign-exchange conversion in eligible transactions.

SADC payments push expands

Payment reform was a major issue during South Africa’s G20 presidency, with Kganyago advocating greater interoperability and regulatory alignment across sub-Saharan Africa.

Operated by the South African Reserve Bank on behalf of regional central banks, SADC-RTGS has expanded significantly since its 2013 launch. SADC said the system had 15 participating member states and 89 participating banks as of January 2023.

The SADC-RTGS expansion comes as Africa builds a broader payments network. The system operates alongside the Pan-African Payment and Settlement System (PAPSS) and the African Continental Free Trade Area’s digital trade initiatives.

For Angola, the inclusion of the kwanza could make regional transactions more direct while giving businesses another route to trade across Southern Africa without relying as heavily on intermediary currencies.