Although the South African rand is the official currency of South Africa, three additional nations also accept it as legal tender.
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South Africa is a member of the Common Monetary Area (CMA), a monetary union that also includes Namibia, Lesotho, and Eswatini.
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According to BusinessTech, the South African Reserve Bank (SARB) controls all four of the country’s currencies, despite each being issued independently.
Furthermore, the rand is legal tender in Namibia, Lesotho, and Eswatini since it can be used in all four of the member countries.
The currencies of all three countries are comparable to the rand, although having individual currencies.
Accordingly, one rand equals one loti in Lesotho, one dollar in Namibia, or one lilangeni in Swaziland.
Botswana officially utilises the pula as currency, even though it is a member of the Southern African Customs Union (SACU) alongside the CMA countries.
Botswana adopted the pula as legal tender in 1976, replacing the rand.
Using the rand informally or unofficially may be considered legal tender in other countries.
After the 2008 hyperinflation of the now-defunct Zimbabwean currency, many Zimbabweans shifted to using the rand.
The ZiG, which is backed by gold, was just launched by Zimbabwe as its official currency.
Together with the local Metical and the US dollar, the rand is also commonly accepted in Mozambique.
Certain types of financial transactions are prohibited between members of the CMA, regardless of the sharing of currencies and economic policy.
The CMA authorities have opted to cease handling electronic EFT payments and collections inside the organisation.
Account holders in South Africa are no longer able to send money electronically to account holders in other CMA nations.
EFT payments from other CMA nations will no longer be accepted by South Africans unless they occur via a global banking channel.
Account holders in South Africa can currently transfer money electronically to accounts in Lesotho, Eswatini, and Namibia.
Although local banks had originally informed their customers that the modifications to their regulations would take effect in April 2024, the Bank of Namibia has extended the deadline to 30 September 2024.
The last day to conduct domestic EFT transactions, including credit payments and EFT debit collections, between South Africa and Lesotho or Eswatini is 9 September 2024.
Nedbank announced that after September 2024, account holders will not be able to use EFT to send or receive payments to beneficiaries in a CMA nation.
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‘You can use our global payment platform, global transactions on the Nedbank Business Hub, or our global host-to-host solution to make and receive these payments,’ it said.
‘Debit orders collected from accounts within the CMA will have to be initiated from an account domiciled in Namibia, Lesotho or Eswatini,’ said the Big Four Bank.
In-country banking services are needed for debit order collections and receivables processing. Alternatively, debtors can use cross-border services to make payments from CMA countries.
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