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Reply #40


Response to Tansy_Gold (Original post)

Mon Aug 13, 2012, 01:45 PM

40. Africans Chase Away Almighty Dollar

http://online.wsj.com/article/SB10000872396390443517104577574662176390478.html

African countries are trying to shoo the U.S. dollar away, even if it means threatening to throw people who use greenbacks in jail...Starting next year, Angola will require oil and gas companies to pay tax revenue and local contracts in kwanza, its currency, rather than dollars. Mozambique wants companies to exchange half of their export earnings for meticais, hoping to pull more of the wealth in vast coal and natural-gas deposits into the domestic economy. And Ghana is seeking similar ways to reinforce "the primacy of the domestic currency," after the cedi plummeted more than 17% against the dollar in the first six months of this year.

The sternest steps come from Zambia, a copper-rich country in southern Africa where the central bank has banned dollar-denominated transactions. Offenders who are "quoting, paying or demanding to be paid or receiving foreign currency" can face a maximum 10 years in prison, the central bank said in a two-page directive in May.

That puts an uncomfortable squeeze on foreign mining companies and tour operators that shepherd thousands of travelers a year to Zambia's side of Victoria Falls. "No one has been prosecuted or jailed for contravening the law yet, but the monitoring process is in progress," Kanguya Mayondi, the Bank of Zambia's spokesman, said. The penalty for not using the kwacha is well within the bank's mandate, he added.

The moves aim to strengthen thinly traded currencies and steer more capital into isolated financial markets. But the new rules are an abrupt change for foreign and local companies used to doing business in U.S. dollars...

THERE GOES THE HEGEMONY!


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