Why Africa Prints Money in Europe

Less than a third of 54 African nations can print their money. The rest rely on Europe and North American firms. It is a challenge, especially when the African Union is highly promoting the continent into a made-in Africa golden age
Less than a third of 54 African nations can print their money. The rest rely on Europe and North American firms. It is a challenge, especially when the African Union is highly promoting the continent into a made-in Africa golden age

In July last year, delegates from the Gambia went to the Nigeria Central bank to inquire whether they could print their money there. The country was experiencing a low supply of their money from reports made by the Gambian Central Bank governor Buah Saidy.

After the defeat of former President Yahya Jammeh, the country also had to create a new design for its currency. Jammeh was the president since 1994 and went into exile when he could not concede defeat in 2016.

Among several charges, Jammeh is accused of killing political rivals, and there were photos of him holding the country’s currency.

After he left power, the country’s central bank did everything possible to destroy the photos.

The new national currency has pictures of a farmer on a rice field, a collection of national indigenous birds, and a fisherman with a canoe out in the sea.

Outsourcing

The real problem is that Gambia relies on money printed by firms in the UK; hence their money shortage woes.

The Gambia is not the only African State in the same situation.

Less than a third of 54 African nations can print their money. The rest rely on Europe and North American firms. It is a challenge, especially when the African Union is highly promoting the continent into a made-in Africa golden age. The AU wants to increase production in Africa.

The main money printing companies are De La Rue, Gieske Devrient, and Crane. De La Rue prints money for the UK, while Gieske is a German firm. Crane is a Sweden-based printing firm.

CFA Franc

The Transparency of the process

It is unimaginable that all these countries do not print their currency. It raises an eyebrow about pride and security.

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Even in some of the growing and richer countries like Ghana and Angola, it is an issue that they cannot print their currency.

While most countries rarely disclose their money printing processes and details, the printing companies would never discuss their business.

Most companies refuse to expose their customers.

De La Rue prints money for Ethiopia, Gambia and Angola, and 14 other African Nations. The statement is from Ilyes Zouari, from his studies of Africa.

Mauritania, Tanzania, and South Sudan also get their money from Germany. Other French Speaking nations print money£ in France using Oberthur Fiduciaire, a French Printing company.

No one knows how much the countries pay for the services. Printing a dollar costs between 6 to 14 cents.

Printing for 40 African countries could be of an unknown high value.

The Central Bank of Ghana made a media statement complaining about spending a lot of money printing the Ghana Cedi in the UK. This was in 2018.

The amount charged further goes up with the shipping expenses from the printer to the countries.  Countries like the Gambia that order millions of notes can pay an amount of £70,000.

High Demand

While it seems like only African countries outsource money printing, other nations do it too. A handful of countries have their money printing systems in place. Finland and Denmark are among several other nations that outsource their money-making.

On the contrary, the US and India make their currency.

Printing low-value money that does not require a lot of global supply is expensive to print at home. Outsourcing makes it less expensive. These were the sentiments of Mma Amara Ekeruche from the African Center for Economics Research.

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Small countries like Somaliland and Gambia would produce more money than they need, as the machines print a lot of currency at a time.

Ekeruche explains that printing money at €10 at home is economically unreasonable, as compared to spending €8 abroad.

Other countries do not have a printing press. Therefore, they cannot attempt to print money. Creating a printing press that can churn out currency is costly and need more technicalities to run.

A few African nations like Kenya, Morocco, and Nigeria can print their own money and mint their coins. Yet, some still supplement their production with imports.

Security reasons

Money printing can turn dangerous, as Ekeruche says. African countries face the unfair advantage of corrupt leaders and hackers that may infiltrate the process. Outsourcing is secure.

Importing can also face hurdles. There is a case where Libyan dollars got lost in 2019 while in a shipment container. Fortunately, the government was able to account for them.

De La Rue has been around for years, and it is one of the mass producers of currencies around the globe.

The high tech allows foreign companies to keep up with changing trends. Also, it supports mass printing processes. The companies can use polymer, which works better than paper and implement other security measures.

Outsourcing can also run a country into some hurdles. For instance, the UK held up Libya’s Dinar from De La Rue in 2011. The move came after sanctions were placed on Muammar Gadhafi by the UN.

Printing Money in Africa

African counties have been laying the groundwork to increase intra-African trade. They mainly rely on Eastern and Western trading relations.

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It would be better if African countries could use printing facilities from other African countries to print their money. Most lie idle too many times making no income at all.

Yet, most African countries choose not to trust each other making it difficult to trade. According to Emmanuel Asiedu-Mante, a former deputy chief with the Ghanaian central bank, most African nations are only familiar with outsourcing money printing.

Francophone Africa, which uses the Central African CFA and the West African CFA Franc, depends on the Euro, making them impossible to print in Africa.

The move from the Gambia to get their money made in Nigeria could be an eye-opener for other countries. If they embrace printing in Africa, they will keep their money and cut shipping costs.

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