By Staff Reporter
The Central Bank of Namibia announced yesterday that it will launch a commemorative banknote on the 21st of March.
“The Bank is pleased to announce that it will launch a commemorative banknote on 21 March 2020. The commemorative banknote will be introduced in celebration of Namibia’s 30th Independence Anniversary.
Further details on the envisaged launch and issuance of the commemorative banknote will be communicated to the members of the public in due course.”
Outraged by what is considered a waste of resources, Namibians retorted that “We have money to print a N$30 note for 30 years of independence, meanwhile our schools don’t have water or electricity”.
According to Bank of Namibia, “The issuance of commemorative banknotes is a common practice among central banks all over the world. Commemorative banknotes and coins are normally issued by central banks to commemorate national events which are deemed significant to a country or to a central bank. Namibia’s currency symbolises independence, national pride and national heritage.
Over the years, the Bank has issued notes and coins, and will continue to execute this task of national banknotes production in the manner in which costs are fully absorbed by revenue.”
While the Central Bank declined to identify the denomination of the note, The Patriot has been reliably informed that the envisioned banknote will be a N$30.00 note.
Banking experts bemoaned this news highlighting concerns about the cost and timing of this new note. Described as an exercise which is both time consuming and costly, banking experts questioned the timing of the decision to print new denominational notes at a time when Namibia is facing financial hardships and the economy is not showing any signs of turning around.
Central banks make money from the printing of new notes. Called “seigniorage’, central banks record a profit made by issuing currency, based on the difference between the face value of notes and related production costs.
Economists regard seigniorage as a form of inflation tax, returning resources to the currency issuer.
When a new bank note or a new denomination is to be introduced, there is a standard process to be followed: the central bank sends a proposal to the finance ministry which then after it has been analysed, forwards it to the Head of State.
Once the government accepts the proposal, the central bank starts working on internal formalities, which includes informing the general public, and then the printing of the new notes commences.
In this case, it would appear that these processes have to get done simultaneously as this decision appears to have been taken rather haphazardly. BoN spokesperson Fillemon Nangonya only confirmed the note after The Patriot made an enquiry to confirm the launch of the bank note.
The implications for commercial banks are huge and costly, say senior bankers at two of the nation’s top four commercial banks.
“In the case of a limited denomination, banks will not recover the cost related to the calibration and updating of machinery templates. Also, the ideal period required for the update is normally at least 12 months.”
A new bank note require that banks adjust ATM’s and other note reading machines, in order for them to be recognised and dispensed accurately by banking machines. Without that calibration done, the note will be recognised as “fake”.
Most of the world’s currency is produced by the intaglio method of printing. In the intaglio method, letters and images are engraved onto a metal plate.
The use of intaglio printing on currency has long been regarded as a way of providing a prominent feature for visually impaired people, since people with visual impairments use touch to identify the raised characteristics of braille.
In 2012 the N$10 and N$20 transitioned to the main portrait of H.E. Dr Sam Nujoma. The portrait of Kaptein Hendrik Witbooi remained the main theme on the N$50, N$100 and N$200 dollar notes.
Sources involved with the production of the bank note, have informed The Patriot that this note will only be brought into manual processes at banks. This effectively means that ATM’s will not dispense this note, and that customers will access this note only across counters.