Work Under Way To Make Sadc Payments Faster And Cheaper

But sending money across borders within the Southern African Development Community Sadc - a regional block comprising 16 countries - comes with complexities, including differences in financial regulations between jurisdictions as well as the problem of how to deal with exchange rates.

According to Tim Masela , head of the National Payments System department at the Reserve Bank, regulatory alignment across the region is at a mature level, with contractual agreements in place to ensure that integration between the financial systems of different countries is seamless and effective. However, the exchange rate problem is yet to be solved satisfactorily.

"If I buy goods from Zambia, I expect to get a Zambian kwacha invoice, but my money is in rands," Masela said in a recent exclusive interview with the TechCentral Show .

"Some Sadc currencies are not well-traded, such that you have direct exchange rates and that brings complications because you don't know what the exchange rate is between the kwacha and the rand, for example."

Masela said the US dollar's dominance in world trade means that there is a rand/dollar exchange rate and another between the kwacha and the dollar. This makes it possible to use dollar conversions as an intermediate step when converting from one Southern African currency to another, but this is not desirable because each time a conversion is made, there is a cost involved, making the transaction more expensive than it needs to be.