Changeover of banknotes cost P17m

Staff Writer | Friday December 10, 2010 00:00

 

Last year, the Bank of Botswana (BoB) introduced a new family of banknotes in order to bring them in line with current trends. In addition to the denominations comprising P10, P20, P50 and P100, a new P200 banknote was introduced.

In a written response to a question from Councillor Mpho Morolong, the Ministry of Finance said the total cost of the new banknotes was P17, 003, 733.10.

'It must be noted, however, that this cost would have been incurred by the bank even if the new banknotes had not been produced as soiled banknotes are continuously withdrawn from circulation to be replaced with clean banknotes,' the ministry said in a statement.

'It should further be noted that the new banknotes have fewer but more advanced security features and, therefore, have a lower 'per unit' cost compared to the old banknotes.' The introduction of the P200 banknote meant BoB now orders a lesser number of banknotes but with a higher face value for only a marginal increase in the cost of the P200 banknote.

In April 2007, BoB signed a five-year contract with De La Rue Currency, a division of De La Rue International, for the printing and supply of banknotes.

In terms of the contract, De La Rue provides 'additional services' to BoB, including banknote designs, consulting services, and services related to currency management and staff training.

'The new banknotes were, therefore, designed with the assistance of De La Rue in accordance with the provisions of the contract at no extra cost to the bank,' added the statement.Nonetheless, the new banknotes have come under criticism for their poor quality that makes them depreciate quite quickly.

When the money was put into circulation last year, there was a public outcry about its quality, particularly the P10 note that deteriorates so quickly that some retailers and service providers refuse to accept it, leading to squabbling.

Matters were not helped when it emerged that the mint company, De La Rue Currency, was under investigation for falsification of paper specification test certificates by some of the company's staff.

Reports said the company, which is the world's largest banknote printer, confirmed that employees had faked the results of quality control tests on paper used for banknotes but refused to name the affected clients.