SADC breaks rand-only settlement era

For 13 years, the Southern African Development Community's (SADC) regional payment system settled in one currency only: the South African rand. That changed on 27 July, when the Angolan kwanza became the second currency accepted on the SADC Real-Time Gross Settlement (SADC-RTGS) system, a shift officials are already framing as the opening move in a longer overhaul of how money moves across Southern Africa.

What just happened - Lesetja Kganyago, governor of the South African Reserve Bank (SARB) and chairperson of the SADC Committee of Central Bank Governors, and Manuel Tiago Dias, governor of Angola's central bank, announced the change jointly. Banks and financial institutions across the bloc's 15 participating countries can now settle eligible transactions directly in kwanza rather than routing them through rand first.

The system itself is unglamorous but consequential: it processes roughly R250.7 billion a month, run by the SARB on behalf of the region's central banks since 2013. Its job is to let cross-border payments settle individually and in real time, rather than in batches, the plumbing beneath regional trade rather than a headline in its own right, until now.

Why Angola, and why now - The case for kwanza was mostly arithmetic. Trade and interbank transactions between Angola and the rest of the bloc totalled around U$3.77 billion across nine currencies in 2025, and South Africa alone accounted for close to U$2.99 billion of that, about 79% of the total value. A currency doing that much business through a rand intermediary was an obvious candidate for direct settlement.

The mechanics matter more than they sound. Every conversion into an intermediary currency costs something, a spread, a fee, a delay, and that cost multiplies when funds pass through correspondent banks outside the region, as they typically have. Removing one leg of that journey for Angola's largest trading relationship should show up as lower costs and faster settlement for banks and, eventually, their business customers.

The bigger picture: this was never just about Angola - SARB officials have made clear the kwanza is a template, not a one-off. Botswana's pula and Mozambique's metical are both already in preparation for onboarding, according to Arif Ismail, head of the National Payment System Department at the SARB. Separately, eight countries have volunteered to connect their domestic faster-payment systems to a regional hub known as TCIB (Transactions Cleared on an Immediate Basis), a parallel track aimed at lower-value transfers, including remittances, for countries outside the Common Monetary Area such as Mauritius, Tanzania, Zambia and Zimbabwe.

That distinction is worth sitting with: SADC-RTGS handles large interbank flows, while TCIB is being built for the transactions migrant workers and diaspora communities actually make. Progress on both fronts, in tandem, would mark a more structural shift than either alone.

There is also, according to a SARB payment-system oversight report cited by regional media, a longer-standing approval for the US dollar to be added as a settlement currency at some point, a reminder that "multi-currency" does not necessarily mean "all-African."

What it does not change - The rand is not going anywhere. It remains the system's dominant currency, reflecting South Africa's financial infrastructure and its position as the region's largest economy, the International Monetary Fund projects South African gross domestic product at roughly $480 billion in 2026. Kwanza's addition expands the system's optionality; it does not dilute the rand's role in transactions that do not involve Angola.

The regional cost context - The push connects to a target most SADC economies are currently missing by some distance. Average person-to-person remittance costs in sub-Saharan Africa sit above 4%, against a G20 goal of bringing the global average down to 1% by 2027. Cross-border payment reform was a stated priority of South Africa's recent G20 presidency, and Kganyago has been vocal about the need for greater interoperability and regulatory alignment across the sub-continent. SADC-RTGS's multi-currency expansion, alongside TCIB and continental efforts such as the Pan-African Payment and Settlement System, is one of the more concrete mechanisms available to move that number.

What to watch next - Confirmation of onboarding timelines for the pula and metical; whether TCIB's eight volunteer countries begin live interconnection, and which ones; any indication of where a Namibia dollar might sit in the queue, given Namibia's full participation in SADC-RTGS and its trade exposure to both South Africa and Angola; and whether direct kwanza settlement produces measurable movement in Angola-SADC transaction costs over the coming months, the number to watch, given how concentrated that U$3.77 billion flow already is with South Africa.