Africa-Press – Eswatini. What may come as good news to consumers and financial institutions is that the Central Bank of Eswatini has further relaxed the controls on the buying and selling of foreign currencies in the country.
According to the Deputy Governor, Felicia Dlamini, this is the manifestation of a process that began in 1995, wherein the bank, together with other Common Monetary Area (CMA) members, as well as SADC member countries have been actively working on the relaxations of Exchange Controls.
She added that the relaxations of controls was expected to continuously give more powers to the financial institutions to undertake transactions freely without having to constantly seek for permission from the Central Bank, thereby creating a self-regulating environment within the local financial institutions, and enhance the ease of doing business in the country.
“As part of the gradual relaxations, the last five years saw relaxations which include: flexibility to maintain a Foreign Currency Account (FCA) without the need to convert to local currency within 90 days as previously required.
This allows customers to maintain a foreign currency account indefinitely, and results in the ease of payment for imports and other services,” she said.
Furthermore, she said the relaxations increased the travel facility limit from E500 000 to E750 000 by 2010, which was ultimately increased to E1 million equivalent per annum in 2014.
The other relaxations included the increase in the Foreign Investment by Individuals from E2 million to E4 million per annum in 2018 and the removal of the need to apply for Central Bank approval for all advance payment for capital goods up to 100 per cent of the ex-factory cost of capital goods to be imported not exceeding a total value of E10 million.
The migration is said to also come as good news to vendors who may be paid with foreign currencies and housekeepers who may get tips in foreign currency from tourists as they will now be only required to produce their identification cards to sell their currencies below E5000, a process that used to be cumbersome before.
The Minister of Finance, Neal Rijkenberg, while officially launching the Financial Surveillance division yesterday at Sibane Hotel, said the gradual relaxation of exchange controls by the Common Monetary Area (CMA) had ensured that Eswatini together with the other CMA members are aligned with other SADC countries and consistent with commitments made under the SADC Finance and Investment Protocol (FIP).
“The commitments include; establishing a framework for co-operation and co-ordination with regard to the promotion of exchange control in respect of current account transactions and capital and financial account transactions.
They also include reviewing exchange control policies to ensure exchange control convergence as State Parties move towards full exchange control liberalisation and improving the availability of information regarding cross-border foreign exchange flows amongst State Parties, with the aim of facilitating performance monitoring and assessment, as well as of maintaining transparency and accountability,” he said.
The minister added that the migration to financial surveillance will therefore ease the pressure on businesses and reduce some of the structural impediments.
“The newly adopted concept of financial surveillance complements the country’s National Development strategy and serves as the Ministry’s contribution to easing the control of the purchase and sale of foreign currency, gold and securities.
The Financial Surveillance approach will improve efficiencies of the financial institutions; enhance the creation of an enabling environment for the country to improve the ease of doing business,” he said.
The minister added that the migration from exchange controls to financial surveillance regime will stimulate foreign direct investments and further lead to an increased likelihood of Eswatini attaining trade driven economic growth.
He said the newly adopted financial surveillance operations embrace relaxations in foreign currency inflows and outflows.
“However, caution is still taken toensure that the financial system is safe guarded from undesirable business practices to ensure economic development through oversight measures that create safety nets to eliminate undesired vulnerabilities.
National cooperation and coordination amongst key stakeholders are imperative when new ways of doing business are adopted. This ensures a better migration and the overall protection of the country’s economy,” he said.
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