Angola Reassures: Kwanza in SADC Payment System Won't Drain Forex Reserves

Why Angola Is Moving Kwanza Settlements Into the SADC-RTGS

Angola has formally made the kwanza a settlement currency inside the Southern African Development Community's real-time gross settlement system (SADC-RTGS), a step that lets regional transactions be settled in the Angolan currency rather than converted through the South African rand or another outside currency. The central bank, the Banco Nacional de Angola (BNA), says the move will not put pressure on the country's international reserves, despite the natural question of whether wider use of the kwanza could force the bank to spend foreign currency defending it.

Cristina Caniço, director of the BNA's payment systems department, told a press conference in Luanda on Friday that the BNA does not foresee major impacts on reserves. The operations moving onto the platform are essentially the same ones already being processed through SADC-RTGS; the difference is that they will be settled in kwanza instead of rands or a currency from outside the participating countries. She argued that stronger regional demand for the kwanza and reduced reliance on intermediary currencies could actually make the use of foreign-exchange reserves more efficient.

The formalisation was completed on Monday by BNA governor Manuel Tiago Dias and South African Reserve Bank governor Lesetja Kganyago, who chairs the SADC Committee of Central Bank Governors. Since the system was created in 2013, the rand was its only settlement currency; the kwanza is now the second. SADC-RTGS covers 15 countries in the region.

In the initial phase, five Angolan commercial banks have been authorised to operate on the platform: Banco Angolano de Investimentos (BAI), Banco Internacional de Crédito (BIC), Banco de Negócios Internacional (BNI), Banco de Crédito Sul (BCS) and Banco Yetu. By enabling direct settlement in kwanzas, the BNA says banks and companies avoid foreign-exchange conversions through currencies outside the system, cutting costs that are ultimately passed on to clients. The SADC strategic plan also foresees adding other regional currencies, with Botswana's pula reportedly at an advanced stage of integration.

What Kwanza Settlement Means for Angola, the Rand and Regional Trade

Why the Reserve Worry Is Probably Overstated

The instinctive concern with any local currency being used more widely is that the central bank may need to burn reserves to support it. The BNA's argument is that SADC-RTGS is not a new source of demand for foreign exchange. The same regional payments were already happening; they were just settled in rand or another intermediate currency. Moving them to kwanza changes the settlement vehicle, not the underlying trade or the country's external obligations. If anything, the BNA says, settling in kwanza reduces the need to hold and deploy intermediate currencies.

That logic holds as long as the kwanza is accepted and liquid enough among counterparties in the system. A caveat: if regional banks accumulate kwanza balances and later want to convert them into rand or dollars, the BNA would still need to provide convertibility. The near-term scale is small — only five Angolan banks are connected — which limits any potential drain on reserves.

The Rand's Monopoly in SADC Payments Ends

The kwanza's admission breaks a 13-year rand-only arrangement in SADC-RTGS. That is significant in a region where South Africa is the dominant economy and its currency has effectively served as the settlement standard. Allowing Angola's currency in is a practical step toward a multi-currency regional payment system, and the stated plan to add Botswana's pula suggests the direction of travel.

The motivation is cost and efficiency, not symbolism. Direct settlement in kwanza removes a conversion leg from cross-border transactions, lowering fees and reducing exposure to exchange-rate swings between the settlement currencies. For Angolan importers and exporters trading within SADC, that could mean cheaper and faster payments.

What Needs to Happen Next

The operational reality will depend on how many banks beyond the initial five join, how willing other SADC members are to hold kwanza, and how quickly the pula is added. The BNA's reassurance on reserves is credible for now, but the system's usefulness will be measured by volumes, settlement times and the actual fee reductions passed to clients. These are early days: the building blocks are in place, but the kwanza's role in regional trade will be decided by usage, not by the formal announcement.

What Banks and Businesses Should Do With Kwanza Settlement

• Angolan banks authorised to join SADC-RTGS — BAI, BIC, BNI, BCS and Banco Yetu — should test kwanza-denominated settlement corridors and quantify how much their clients save on conversion costs, since those savings are the main commercial argument of the reform.
• Other Angolan banks not yet in the initial phase should prepare onboarding procedures with the BNA, given the SADC plan to widen participation and add currencies such as Botswana's pula.
• Companies trading within the 15-country SADC region should compare kwanza settlement against rand-based pricing to estimate reduced conversion fees and faster cash-flow settlement.
• Regional treasurers should monitor whether other SADC central banks accept kwanza balances in practice — the formal announcement is not the same as everyday acceptance by counterparties.