Cash remains King in Namibia

Tujoromajo Kasuto

Bank of Namibia (BoN) Governor, Johannes !Gawaxab says the Namibian economy is one that is highly cash dominated as over 50 million Automatic Teller Machines (ATM) withdrawals totaling N$36.9 billion were conducted in 2021.

Worth noting, is that as of the end of December 2021 the total currency in circulation stood at 4.63 billion Namibia dollars, he informs.

During the same period cash redemption amounted to six percent of the total currency in circulation.

!Gawaxab says these figures are a perfect illustration of Namibians remaining cash reliant despite advancements in digital payments.

It is also indicative of the symbiotic relationship between cash and cashless transactions as the two have become intertwined and thus the cash will not be displaced in the near future, he adds.

He however, the BoN Governor clarifies that this does not mean that the financial systems and other agents should be discouraged from transforming and innovating in the payment landscapes as the bank welcomes innovations on this front as they can ensure meaningful participation of the people especially those in the informal economy, Small and Medium Enterprises (SMEs) and in rural Namibia.

He further said that although Namibians transact increasingly electronically through digital payment channels, the adage that cash is king is still valid in Namibia.

In addition, in 2020 an increase of 4.3 percent was recorded in the amount of currency in circulation while last year showed a slight reduction of 1.7 percent. The governor says that one possible explanation for this possible paradox is the increasing demand of bank notes in times of uncertainty.

The slight reduction in 2021 is ascribed to the degree of normalisation following less stringent restrictions of Covid-19.

Money is ever changing since the Chinese introduced paper money over 1000 years ago and thus BoN bank notes are so much more than just money as they reflect the diversity of our people, !Gawaxab says as he launched the new 10 dollar note.

“They reflect our flora and fauna, the majestic animals and the beauty that Namibia offers. Our heroes are honoured on the notes and preserve the country’s rich history for posterity and tourists take the bank notes as souvenirs as they are highly sought after in the international collectors market,” he mentions.

Therefore there is a need to maintain the quality of the bank notes with cutting edge security features which renders them easy to identify and difficult to counterfeit.

The BoN’s Director of Banking Service, Sencia Kaizemi-Rukata, says that at the moment counterfeiting is not a concern at the central bank as they have noted that the level is very low and the counterfeit that has been attempted is not “advanced” as when people try to counterfeit they simply just photocopy the bank notes on a normal photocopy paper.

However, she affirms that they have a mechanism in place at the bank to monitor the trend of counterfeiting, The most counterfeited note is the N$200 note with the highest levels recorded in 2017, but the trend is on a downward spiral with only 78 notes counterfeited last year.

This was revealed at the official launch and unveiling of the modified N$10 banknote. The modified note depicts a new visible security feature which is the official signature of the governor printed in raced ink on the front side of the note and the year of print (2021),whilst the backside of the note remains unchanged.

Over the past years the bank has released a N$10 commemorative coin of the Founding Father and Namibia’s first President Sam Nujoma and in 2020 the bank released a N$30 note to celebrate the country’s 30th Independence anniversary.

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