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Currency counterfeit undermines economy – Sanusi

25 June 2013, 10:04

Abuja - The Governor of Central Bank of Nigeria (CBN) , Sanusi Lamido Sanusi, has said that the increased prevalence of currency counterfeiting in the African Region, undermines integrity of domestic economies.

Sanusi said this at a Regional Workshop on bank notes and Currency Management and Forecasting in Central Banks, in Abuja on Monday.

He said that the increased prevalence of counterfeiting activities was one of the major challenges with the various Central Banks in the region.

Represented by Mrs Sarah Alabi, Deputy Governor, Policy, Sanusi said that there was a need to enhance currency management, to allow the Central Banks focus on their core functions.

"Currency counterfeiting undermines the integrity of the domestic, economy, creates economic distortion and renders the tools of economic management ineffective.

"In other to overcome this malady, appropriate enlightenment on the evil of counterfeiting needs to be provided to the people while adequate anti-counterfeiting laws should be enacted to check perpetrators of the act,’’ he said.

According to him, there is a need for effective collaboration between Central banks and other international agencies in the war to fight counterfeiting.

On currency design and forecasting, he called for new design of currencies must have public acceptance, incorporate requisite security features and meet durability and machine processing standards.

He said that circulation must be set and monitored whether currency sorting was carried out in house or out sourced.

The governor said that effective currency management depends on excellent information and institutional analysis.

"Efficient and effective currency management commences with strategic analysis of currency life cycle, however, strategic management of currency is impossible without accurate forecast of the demand for bank notes.

"The long lead time involved in bank note production makes it vital from cost and reputational point of view that Central banks forecast the demand for bank notes as accurately as possible,’’ he said.

He said that accurate forecasting encourages more efficiency procurement, reduces stock holding cost, discipline balance approach to currency management and enhance smooth functioning of the banking system.

Also, the Director-General West African Institute for financial and Economic Management (WAIFEM), Prof. Akpan Ekpo, said currency management was one of the critical functions in central banks' operations.

"Indeed, the integrity of a currency and its efficient supply are clear indicators of a well-functioning central bank.

"In the eyes of the people, this fundamental function of the central bank should be effective, efficient, and present no issues that may hurt the reputation of a country.

"Of particular concern, is the issue of counterfeiting, which is as old as money itself, and continues to present a potential danger to national economies and financial losses to consumers,’’ he said

According to him, recent developments in photographic and computer technology as well as printing devices have made the production of 'counterfeit money relatively easy.

He said that the major challenge to protect currencies from counterfeiters had increasingly become more dependent on partnerships between law enforcement agencies, financial institutions and central banks.

Others, he noted, include the security printing industry and high-grade supplier's community.

Commenting on the workshop, he said that the specific themes of the course include coin developments in Africa and Worldwide, Designing New Families for all substrate.

Others are currency, Benefits and Features of Paper Currency, Benefits of Polymer Currency, Moving the Coin/Note Boundary to meet User needs, trends in Worldwide Currency Developments, among others.

The News Agency of Nigeria (NAN) reports that the workshop was organised by WAIFEM and have participants from CBN and other financial institutions.

 - NAN


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