Africa's first polymer bank notes to remain in circulation
From Xinhuanet
China Economic Net
12.05.04
Africa's first and only polymer banknotes, issued by the Bank of Zambia, will remain in circulation despite their disappointing performance, the bank said Tuesday.
Speaking at a press briefing, Bank of Zambia's Deputy Governor Denny Kalala denied the rumor that it is withdrawing the controversial polymer banknotes from circulation.
"The position is that the Bank of Zambia is not withdrawing the polymer notes from circulation, rather it is expediting the process of exchanging unfit or faded polymer banknotes with fit notes," he said.
"This process of exchanging unfit notes, whether paper or polymer, with fit banknotes is a routine and on-going core activity of any currency issuing authority including the Bank of Zambia. The replacement process is intended to ensure a continuous flow of fit and clean banknotes in circulation," he said.
The Bank of Zambia officially launched 500 kwacha and 1,000 kwacha polymer banknotes on September 26, 2003. It was the first and is still the only African country to have polymer notes in circulation.
Bank officials said the polymer notes, printed by the Canadian Banknote Company, could last four times longer than the normal paper notes.
Even though the cost of polymer notes is twice that of the paper notes, bank officials said the long life span of polymer notes will result in much lower costs for the bank to maintain quality of notes in circulation.
According to bank officials, there are currently 22 countries in the world that have issued polymer notes, while Romania, Australia and New Zealand have gone full polymer notes.
The fate of polymer notes in Zambia, however, has been bad in the very beginning.
Even during the launch of the polymer notes, it had been found that the serial numbers on the notes could be easily rubbed off.
The bank then held urgent discussions with the printer and the problem was rectified. The printer met the cost for issuance of new notes and the withdrawal of problem notes.
Months after the polymer notes were in circulation, new problem occurred again. There are growing public complaints of notes features fading seriously.
Deputy Governor Kalala said the bank has raised the issue to the printer who have undertaken to take corrective measures to ensure that the notes perform to expected standard.
"Following our observation of accelerated fading and public concerns, further tests and analysis of notes were undertaken. These tests indicate that the principal problem of accelerated fading of notes appear to be a printing problem related to the formulation of the special inks," he said.
While the problem is being sorted out by the printer, the bank appealed to the public to change their unfit notes for fit ones at any commercial banks.
"The Bank of Zambia would like to assure members of the public of its commitment to ensuring that the benefits of using polymer technology accrue to the country," he said.
The deputy governor dismissed speculations of any foul play in the bidding process in selecting the printer. "We followed the procedures that are normally observed," he said.
Kalala also said that his bank has no regret for choosing to become the first African central bank to adopt polymer notes.
"In everything, there are people who start and there are people who follow," he said.
The deputy governor said polymer notes is a proven technology and that the problem of accelerated fading has a solution in the industry.
As a support to his case, he said Singapore has recently introduced polymer notes that were withdrawn in the 1990s.
"We believe polymer notes is still the way for future," he said.
