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Monday, June 17, 2024

Print the dalasi in Nigeria!

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Last Tuesday, thanks to the Internet and a visit by the governor of the Central Bank of The Gambia Mr Buah Saidy and delegation to the governor of the Central Bank of Nigeria, we have learnt a few telling things about the state of monetary supply in The Gambia. We do not have to wait for another months to be briefed by the Central Bank of The Gambia’s monetary policy committee. In fact the information gleaned from the discussions of the governors might probably not have been contained in the committee’s quarterly report.

First we learn that our bankers banker is “having a difficult time” regulating the commercial banks in the country especially in the areas of meting out sanctions to erring financial institutions. Governor Saidy wants the CBN leaders to tell him how they deal with the errant banks. In response his Nigerian counterpart told him they have a Central Bank Act that grants independence to the CBN and a Banks and Other Financial Institutions Act that also grants a lot of power and authority for the CBN to bite when it finds people who want to take advantage of the system for their own personal benefit.

Governor Godwin Emefiele pointedly advised: “We don’t breed any nonsense about people who try to take advantage of our system for their personal benefits. Everything must be done keeping in mind the overall national goals and objectives and that is why the CBN will act very fast on any economic agent that tries to undermine our policies and that’s why we are very firm on them. Working with your parliamentary I believe you can have laws that can give you the kind of independence that you need…”

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The second thing we learnt from the CBG governor is that The Gambia is running “very low on currency” and one of the ways the current situation can be averted is Nigeria printing the Dalasi.

Governor Saidy said: “We also need assistance in currency management. Right now we have a situation where we are running very low on currency and at some point I get scared because we cannot at the central bank run out of currency completely as that will be a disaster… We placed an order for three years of currency to be printed but again, the contract with De La Rue since independence they have been printing our currency. [Nigeria] is closer. De La Rue is in London but they do the printing in Malta and also Sri Lanka. The last one was done in Sri Lanka.

“Lifting those things all the way to The Gambia is costly because we had to do some emergency order and that cost was going to be on CBG but with negotiations and assuming then that we will give them this contract of three years of printing our currency, they now paid for the flight – about £70,000 to lift those currencies to The Gambia.”

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The Nigerian governor said the Nigerian Security Printing and Minting Plc has been printing the naira since the 1960s and assured that they would be more than willing to print the dalasi and that they would be more competitive than De La Rue and therefore provide more seniorage gains for The Gambia.

Since this news was released many Gambians have expressed scepticism about Governor Saidy’s intention to print the dalasi in Nigeria. They cite the systemic corruption pervasive in the Nigerian government and among Nigerians as ‘419’ fraudsters and scammers. To these sceptics, the optics do not look good and the governor’s intention is a non-starter.

We disagree. The Nigerian Security Printing and Minting Company Plc uses public security features and teller features to ensure the security of the naira notes. Like the de la Rue notes, they are protected by a number of security features to enable the recognition of genuine notes. The distinguishing features, which can immediately be recognised by touch and visibility, are raised print, the security thread and the watermark. CBN is also constantly reviewing the performance of the security features for vulnerability to counterfeiting to enable it to respond appropriately.

It makes a lot of sense for the dalasi to be printed in Nigeria than by an English company with factories in Malta and Sri Lanka. What Governor Saidy should demand are better quality notes especially for the D20 denomination. The new denomination notes introduced as recently as 2019 have already gone wrinkled beyond salvation thanks to their poor quality and misuse by a Gambian public hardly sensitised about how to handle banknotes.

The Gambia like most developing economies in Africa is still extremely reliant on cash for everyday transactions and large informal markets drive the usage of cash for transactions.

Therefore, the government of The Gambia should do more to promote digital and mobile payments.  

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