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US Dollar-based regional payment system expected to go live in October

US Dollar-based regional payment system expected to go live in October

By Danai Majaha at the SADC Council of Ministers meeting in Windhoek.

Southern Africa is making progress to create a multi-currency regional payment system, with the United States Dollar expected to become the second currency of settlement after the South African Rand.

The Southern African Development Community (SADC) Executive Secretary, Dr Stergomena Tax said the SADC Integrated Regional Electronic Settlement System (SIRESS) is expected to move from a single-currency settlement system using only the Rand as the currency of settlement, to a multi-currency settlement system.

“Settlement in US Dollars on the current platform is expected to go live in October 2018, while the whole multi-currency platform is expected to be fully operational by December 2019,” Dr Tax said during the official opening of the SADC Council of Ministers Meeting in Windhoek.

She noted that the addition of the US Dollar to the regional payment system is expected to facilitate faster transactions as the bulk of intra-SADC trade is done in the American currency.

“Noting that the facilitation of payments remains a key challenge to intra-SADC trade, the addition of the US Dollar that account for about 60% of intra-SADC cross-border transactions is expected to facilitate greater cross-border trade and investment in the region,” she said.

According to the South African Reserve Bank, around 60% of cross-border transactions in SADC are denominated in US Dollar, 35% in Rand and the rest in other currencies. US Dollar transactions are currently settled through correspondent banking arrangements using US correspondent banks.

SIRESS is a regional electronic payment system developed by SADC member states to settle cross-border transactions faster without having to rely on intermediary banks from outside the region. It was established in July 2013 and piloted in four countries, Lesotho, Namibia, South Africa and Swaziland. The system is now operational in 14 member states except Madagascar and the regional organisation’s newest member, Union of the Comoros.

Since the launch of SIRESS in 2013, a cumulative total of 1,063,306 transactions had been settled by the end of April 2018, representing R4.46 trillion or US$377.14 billion.

The main benefits of the system are its efficiency and reduction in costs by avoiding the services of correspondent banks.

The development of SIRESS is in line with the SADC Protocol on Finance and Investment to improve the regional investment climate through enhanced cooperation among member states on payment, clearing and settlement systems, to facilitate trade integration.


Southern African News Features offers are produced by the Southern African Research and Documentation Centre (SARDC), which has monitored regional developments since 1985. Website and Virtual Library for Southern Africa at www.sardc.net .


 

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Following reverse listing, public can now acquire shareholding in Paratus Namibia

Promotion

20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.