Counterfeit notes in Africa on the increase
According to the latest data in my possession, the number of counterfeit banknotes confiscated during the first six months of this year more than doubled from that of 2015, with public awareness of the existence of fake money remaining low. Data from several central banks across Sub Saharan Africa show that the number of fake banknotes reported and confiscated as of this June jumped 67 percent in the full year 2015. Organised crime syndicates are flooding Africa with counterfeit USD $50 and $100 banknotes, costing businesses and consumers millions of dollars. More than 100,000 fake USD$50 notes were removed from circulation in 2015, triple the number detected just three years ago, government figures in West and Southern African countries show.But this likely represents only a fraction of the amount of bogus money flowing through the economy amid a massive spike in the number of counterfeiting operations being uncovered by police. The once state-of-the-art security measures used in the design of the polymer banknote are now more than a decade old, making it vulnerable to advances in digital imaging and printing technology.The same date shows that the ratio of counterfeit notes is 1,900 in every million, more than double last year’s 700 in every million.An executive director and currency management consultant based in Africa attributed general public inability to identify fake money as the main factor in the jump. The trend has no direct relation with the general or regional elections, it hinges more on people’s awareness and willingness to report cases of counterfeit money to the police,’ he told your blogger a few days ago. A widely circulated rumour has it that the number of fake banknotes leaps at election times in African countries because they are distributed in order to coax people into voting for certain candidates. However, the data I have show that the number of fake notes found in Nigeria was more or less stagnant in 2015, when legislative and presidential elections were held, and for most of this year, at below 50,000 per month.
The number skyrocketed this June to almost 200,000 pieces following the arrest of four perpetrators according to government data. The study did not reveal the sum of state losses occasioned by counterfeiting. Researchers said that most central banks officials would keep working with the Police and the judiciaries to eradicate the circulation of counterfeit money and grow public confidence in the African currencies.Some African countries plans to enacted an obligation to use other currencies rather than dollar in their onshore transactions, the measure is being taken to curb local demand for dollars and hence stabilise the local currencies, which have long been volatile whenever there’s policy changes by Federal Reserve Bank in US.Most African currencies have slowly regained their value after losing around 24 percent by last year against the greenback, making the region’s second-worst performer after Asian currencies. To support the African countries efforts, the central banks in Africa plans stipulates times when non-local currencies can be used in international financial and commercial transactions, specifies income and expenditure under the state budget and regulates foreign currency savings and deposits in banks and international financing transactions, as well as many other transactions covered by the local Laws and the Investment Law.However, the regulation stipulates exemptions for certain strategic infrastructure projects, such as airports and projects in electricity and geothermal energy, with the consent of the central banks in respective countries. In some countries, central banks have also given some companies extra time to adjust their accounting systems to local currencies. In those countries, banking acts stipulates that the central bank can adopt a particular policy if the mandatory use of local currency for non-cash transactions causes problems for business people, with certain qualifications.