This week the price of petrol came down. I hope you can hear the excitement in my voice. I’m hoping that there will be a knock on effect and we’ll see the prices of other things come down too.
As consumers we’re always reminded when the price of petrol goes up that everything is interconnected, but somehow those same musings are nowhere to be found when the price goes down.
However, while I was riding the crest of that wave, I was brought back down to earth by a LinkedIn piece written by former PM Dr Moeketsi Majoro that spoke about a matter I’ve been aware of without being fully cognizant.
The common monetary area linking the SACU region is about to undergo a major change. We will no longer be able to perform EFTs to South Africa as well as the converse from SA here. When looking at the two countries unique relationship, you start to really worry about this kind of thing.
I understand the issue at hand is to get a grip of potential money laundering, but I wonder how much money laundering will actually be curbed by this quite drastic measure?
If I remember correctly remittances remain one of our revenue collectors’ biggest earners. So many Basotho are living and working in the Republic, while supporting and sustaining families here in the Kingdom.
This new regulation is going to make it extremely difficult and expensive to perform cross border money transfers. I can use my own situation as an example. From time to time my siblings and I will transfer money to one another for whatever reason. This is pretty normal, run of the mill stuff, but now it will be not possible.
The Loti is pegged to the Rand, so how will that now be done as a forex transaction? Simultaneously, Rands will still be in circulation in Lesotho. Three out of our four banks are South African owned but they’ll be processing transactions as though they come from two different regions. It’s a crisis waiting to happen!
There are surely, many technicalities that have gone in to this happening but they need to be simplified and sorted out so that regional integration can go from being a buzz word in to a real thing. So that the free trade act might actually start working.
My intention had actually been to write an upbeat celebratory column this week as it was my wife’s birthday on Wednesday! She is aging like fine wine is the lovely lady, and continues to be the greatest partner a guy could ask for. Happy birthday to her, and may she see many more!
However, this issue was brought up in a twitter space and I have been unable to look beyond it. I know the banks have been trying to warn us and make us aware for some time now, but I guess the closer it gets to happening the more real it becomes. The realer it becomes, the more we think about the effects of the regulations. Worrying times…
With any luck this matter will arrive to a logical conclusion that doesn’t see people paying over the odds to transact with our only neighbour. Hopefully it will also progress the much talked about regional integration with freedom of movement and all those bells and whistles. One can only hope…
