NAD (Namibian Dollar): What It is, History, Performance

What Is the NAD (Namibian Dollar)?

The NAD (Namibian Dollar) is the national currency of Namibia. It was introduced in September 1993, replacing the South African rand (ZAR), which had been in use by the county since 1990.

Although the rand is no longer the official currency of Namibia, it is still considered legal tender in the country and can be easily exchanged for NADs at a rate of one ZAR per NAD.

Understanding the NAD

The Namibian Dollar is administered by the nation's central bank, the Bank of Namibia, where it has been in circulation since 1993 in both coin and paper formats. The value of the NAD is pegged to the South African Rand at a rate of 1-to-1, since the rand was used previously as the country's de facto legal tender.

The country's bank notes circulate in denominations of 10, 20, 50, 100, and 200 NAD. All of these notes feature a portrait of Hendrik Witbooi, a revolutionary who fought for national independence against German rule in the late 1800s. In March of 2012, the 10 and 20-dollar notes were redesigned to depict Sam Nujoma, who was the first president of Namibia following its independence.

The NAD's first coins were issued in December 1993, in denominations of 5, 10, and 50 cents (each made of a steel and nickel alloy) , as well as 1 and 5 dollars (each made of bronze and aluminum).

History and Performance of the Namibian Dollar

A growing movement to replace the use of South Africa's currency in Namibia began in 1990. Because the NAD is connected to the ZAR and has a pegged exchange rate of one to one, the ZAR remains a form of legal tender in Namibia.

Initially, in 1990, the proposed replacement currency for the country was the "kalahar," a name that reflects the Kalahari Desert, which sprawls across eastern Namibia. Officials drew up several designs for the kalahar and speculated on a range of denominations, but little developed from this. The only replacement currency for the ZAR that ever took shape, and exists today, is the NAD. 

In recent years, the NAD has steadily depreciated against the USD. Whereas in 2011 one USD was equivalent to around 8 NAD, that number rose to almost 17 in 2016. As of December 2020, the current rate is about 15 NAD to one USD.

Namibia's economy has grown at a modest pace in the past decade, achieving an average annual growth of gross domestic product (GDP) of just over 3%. Between 2008 and 2019 the country's per-capita gross domestic product, measured in terms of purchasing power parity (PPP), increased from $8,66 per person to $9,673. Inflation, on the other hand, has hovered around 5% in recent years, averaging 4.9% per year between 2014 and 2019.