Who makes our money and why?


A few months ago, a Gambian delegation visiting the Central Bank of Nigeria asked if the Gambian dalasi could be printed in its West African neighbour. The Governor of the Gambia’s central bank, Buah Saidy, said the country was short of currency.

The small West African country had to review its currency after the defeat of former president Yahya Jammeh in the 2016 elections. Yaya Jammeh, who ruled for 22 years, had his own image on Gambian banknotes.

After his fall, the Gambian Central Bank set about destroying these notes.

Today, Dalasi banknotes depict a fisherman pushing his pirogue to the sea, a farmer tending his rice field and some colourful indigenous birds.

One problem remains, however: The Gambia does not print its own money. It places orders with British companies, which often leads to a shortage of cash.

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A very secure operation
And Gambia is not the only African country to have its currency printed abroad.

More than two-thirds of Africa’s 54 countries print their currency elsewhere, mainly in Europe and North America.

Among the main companies involved are British banknote printing giant De La Rue, Sweden’s Crane and Germany’s Giesecke+Devrient.

It is perhaps surprising that almost all African countries import their currency. This practice may even raise questions of sovereignty and national security.

Most countries do not talk about their currency printing process, probably for security reasons. The printing houses are even less transparent.

None of the companies contacted by DW would answer our questions.

Ethiopia, Libya and Angola – as well as 14 other countries – place orders with De La Rue, says Ilyes Zouari, president of the Centre d’étude et de réflexion sur le monde francophone.

Another six or seven countries, including South Sudan, Tanzania and Mauritania, are said to print their currencies in Germany, while most French-speaking African countries are known to print their currencies with the French central bank and the French printing house Oberthur Fiduciaire.

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Significant costs
It is not clear how much it costs to print African currencies like the Dalasi. For example, the US dollar costs between 6 and 14 cents per note to print.

It is therefore likely that the cost of printing over 40 African currencies is significant.

In 2018, an official at Ghana’s central bank complained to local journalists that the country spends huge sums on its UK orders of the Ghanaian cedi.

Yet analysts say it is not unusual for African countries to print much of their currency abroad.

Many countries around the world do so. For example, Finland and Denmark, as well as hundreds of central banks around the world, print their money abroad because there are not many companies with this expertise.

Only a handful of countries, such as the US and India, produce their own currency.

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Mma Amara Ekeruche of the African Center for Economics Research told DW that when a country’s currency is not in high demand – and not used globally like the US dollar or pound sterling – it makes little financial sense to print it at home because of the high cost involved.

Money printing machines usually produce millions of notes at a time. Countries with small populations, such as Gambia or Somaliland, would have more money than they need if they printed their own notes.

« If a country prints a ten-euro note at home and sees that it can print it for about eight euros abroad, why would it incur extra costs to do so? It wouldn’t make sense, » says the economist.

Some countries, such as Liberia, do not attempt to print their own currency because they do not even have a printing press, which is expensive to install and requires special technical skills.

Only a handful of African countries, such as Nigeria, Morocco and Kenya, have sufficient resources to print their own currency or mint their own coins, and even they sometimes supplement their production with imports.

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The risks of an operation

Another concern, according to economist Mma Amara Ekeruche, is that some countries that try to produce their own currencies may fall victim to corrupt officials or hackers who may try to forge or manipulate them. In many cases, production abroad is safer.

But with importation, there can also be security challenges. For example, containers of Liberian dollars shipped from Sweden disappeared in 2018 in the port of Lagos.

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On the other hand, the British company De La Rue, founded in 1821, produces banknotes for central banks around the world.

It therefore has the tools and experience to keep abreast of innovations in currency, such as the use of polymers, which are considered cleaner, more durable and more secure than paper, with the plastic material allowing more sophisticated features to be included to protect against counterfeiting.

But printing abroad is not without its drawbacks. Some countries could find themselves hit by economic sanctions. In 2011, for example, the UK withheld orders for Libyan dinars from De La Rue, after the UN sanctioned the late leader, Muammar Gaddafi.

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Lack of confidence

Printing banknotes in Africa would increase profits on the continent and, at least in theory, African countries could pick and choose which ones have printing capacity as there is likely to be spare capacity.

But this is not the case in practice. « This is due to trust issues between countries, » says Emmanuel Asie du-Mante, former deputy director of the Central Bank of Ghana.

And there is the complicated case of francophone Africa – countries using the Central African CFA franc and the West African CFA franc. These currencies are closely linked to the euro and are produced in France.

Yet there is hope for change on the horizon. With the Gambia’s central bank, officials are proposing a possible partnership with Nigeria, the countries could start to look inward for their currency orders. If this happens on a large scale, it could significantly reduce shipping costs.

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Author: Georges Ibrahim Tounkara