AFRICANGLOBE – Oil firms, embassies, consulates and other foreign institutions operating in Angola will from July 1 be required to make their payments for goods and services in the local Kwanza currency.
The Angolan National Reserve Bank (BNA) in a statement issued Tuesday said this conforms with current official policy to fight the dollarisation of the economy.
Some foreign institutions in the oil-rich southern Africa country have already been complying with the requirement since the campaign started last year.
“Some embassies and consulates are receiving payments for visa issuing and paying employees in Kwanzas” the bank’s statement said.
Three major oil firms also operate in Angola namely Chevron from the US, British Petroleum (BP) and France’s Total.
The country’s unofficial dollarisation–where residents of a country prefer to use foreign currency as opposed to the local one–has been attributed to a high inflation and currency instability as the country recovers from a 27-year civil war.
The capital Luanda is rated as Africa’s most expensive city to live in and also compares favourably with other costly cities such as Tokyo.
According to a BNA survey, the currency exchange rate is key to the country’s inflation, thus the fight against dollarisation would continue, the bank said.
New coins of one, five and ten Kwanzas and 50 centimes have been released this week and new paper money will circulate from March 22.
“The new coins circulation will not stimulate inflation but will help customers receive fair change,” Mr José Massano the BNA governor said.
“Our Kwanza value will be more increased and our economy improved,” he added.