On 14 September the Ethiopian government announced new banknotes. These new banknotes were designed with the intention of fighting black market schemes, fraud, tax evasion, money laundering, and various other economic ills that have been plaguing the nation. One of the ways in which the government claimed that the new notes would combat economic crimes was through the use of enhanced security features making counterfeiting difficult.
Barely two weeks after this announcement, however, on 30 September 2020, police in Bahir Dar brought into custody two individuals who were caught in possession of counterfeit notes. These counterfeit notes were not of the old banknotes, but of the new ones. Even though the individuals were caught red-handed, police say that they are not aware of the source of the counterfeit currency. They speculate that the source could be anywhere from local to foreign agents.
Such discoveries are problematic for the economy of the nation. Experts (both public and private) have claimed that if counterfeit notes start being produced before the full integration of the new notes into the economy, the country’s already galloping inflation rates could reach unsustainable levels. Moreover, such developments are extremely concerning given that the central theme for reasons to introduce banknotes was the curbing of illicit economic activity.
The apprehension of these individuals adds to the criticisms that some were levying on the administrative procedures surrounding the new notes. Just last week, reports had surfaced that security forces were seizing cash reserves below the stated threshold of ETB 1.5 million. Addressing these concerns Ahmed Shide, the Minister of Finance, and Yinager Dessie, Governor of the National Bank, claimed that the actions of law enforcement were a result of confusion. Such affirmations do not do much for the conspiratorial concerns of some, however, which is why the government needs to address them before they take a life of their own, especially if counterfeiting is going to be an issue this early.