Khama Launches New Bank Notes

LEKOPANYE MOOKETSI
Correspondent | Monday August 24, 2009 00:00

Speaking at the launch, Khama commended the central bank for introducing the new currency.  He observed that the new P200 note bears the portrait of an unknown woman and pupils.  This symbolism, according to him, is meant to highlight the importance attached to children and the role played by women in the country's economic development. 

'It is equally appropriate that we should cherish and treasure the country's wildlife heritage as represented by a herd of zebras on the obverse side of the new P200 banknote.'

Khama said an interesting recent innovation has been the decision to move away from exclusive use of portraits of reigning heads of state, to a diversified selections of the country's history and endowment.  'You know that the P20 bank note features the portrait of the composer of the National Anthem,   Dr Kgalemang Motsetse, who was also Botswana's first opposition party leader; the portrait of the first President of the country, Sir Seretse Khama, is on the P50 banknote, and those of three chiefs, who sought British protection for the country, are on the P100 banknote.This typifies the country's respect for tradition and adherence to democratic principles.

'It is instructive, therefore, that as we witness the launch of the new bank notes today, we should remind ourselves of the significance of the historic decision that was made 35 years ago.  This is meant that the authorities should not only have the national currency, but more importantly, they should determine its value from time to time, as part of the country's monetary and financial independence.'Khama noted  that  the country's currency does more than just facilitate trade but it is also a symbol of nationhood and identity.

It was for this reason that in 1974, the country's first President, Sir Seretse Khama, saw the need for the country to have its own currency.   A year later, the decision was implemented and, on July 1, 1975, the Bank of Botswana was established with, among other responsibilities, to issue and manage the currency following its introduction on Pula Day, August 23, 1976.

Khama recalled that before then, Botswana was for all practical purposes, a monetary province of South Africa.  He said there were neither official statistics on currency in circulation in the country, nor any seignorage paid by the South African Reserve Bank to Botswana  and other countries in the Rand Monetary Area.  South African exchange control regulations governed all currency movements and payments between Botswana and non-Rand Money Area countries.

The first challenge for the Monetary Preparatory Commission, which had been established by the government in 1974 was to prepare the ground for a national currency and central bank, to estimate Botswana's requirements, propose a name for the currency and make recommendations concerning the characteristics of the new bank notes.  These issues presented no major problems and were quickly resolved.

He said back in 1976, there were those who believed that Botswana would not succeed in managing its own national currency for several reasons.  Among others, Botswana's pool expertise was very small, BoB had just been established, and the foreign exchange reserves were very low.  'But here we are today; history has taught us, as it has with many nations, that a people's courage and determination is the key to success.

We can, on this occasion, look back with a sense of justified pride that the integrity and value of the Pula have been well maintained over the years.'

He said inflation has generally been stable, the foreign exchange reserves have been above the country's immediate needs, the banking system is stable and there has neither been a bank failure nor financial crisis.  Even after the removal of exchange controls in 1999, the Pula has continued to command public confidence locally and abroad.  Khama cautioned that Botswana cannot afford to be complacent because the country is part of the global economy that is currently afflicted by the economic recession.