Rapid increase in illegal trading
The Bank of Namibia (BoN) says it has observed a rapid increase in the illegal trade of foreign currencies over the last five years.
The illegal activities involve individuals and business persons engaging in foreign exchange trading without the necessary authorisation from the central bank.
According to Ndangi Katoma, the central bank’s director of strategic communications and financial sector development, BoN has on several occasions warned the public through notices in the media on the severity of illegal trade in foreign currency, as well as the penalty involved. Therefore, the entities and or individuals that are involved in such illegal transactions should be aware of their violations.
“Any person or corporate entity that contravenes or fails to comply with the Exchange Control Regulations (1961) as amended, shall be guilty of an offence. Upon conviction, such person or corporate entity shall be liable to a fine not exceeding N$250,000 or imprisonment for a period not exceeding five year or both,” cautioned Katoma.
Katoma stressed that illegal foreign currency trading undermines economic development, through compromising of operations of formal foreign exchange markets, leading to negative effects on the role of the banking sector in the economy. “It must therefore be tackled by all means,” he said.
“Typically, illegal trade in foreign currency may result in the mushrooming of what is termed black market, low confidence in local currency, and loss of foreign exchange earnings by the authorities.
“Illegal trading in foreign currency also provides fertile breeding ground for money laundering activities and a high risk in terrorist financing,” added Katoma.
He further appealed to law-abiding citizens to assist law enforcement agencies and the Namibian Police by reporting such activities immediately as they become aware of them, or alternatively, alert the Bank of Namibia on: 061-283 5125.