Ethiopia has recently announced new bank notes to replace the existing 10, 50 and 100 Birr notes and new 200 Birr notes. Various opinions are being expressed about the changed and newly introduced bank notes. Various sources have suggested that changing the notes have several benefits.
The government has announced that the new banknotes will help curb illegal activities, corruption and smuggling. Not only has most of the money been transferred without government or bank approval, but the government has said that a large amount of the country's currency is circulating in neighboring countries. The government said boldly that this is a threat to the country's security beyond the economy and is becoming a tool for crime.
Dr. Molla Alemayehu, a lecturer in economics at Haromaya University said that the change in bank note is a delayed decision. He said that if it had been changed earlier, it would have helped control inflation and reduces loss of life and displacement.
Even if it is a delayed decision, the change in the bank note is still important. He said, adding that it plays an important role in preventing money laundering, economic fraud, and controlling inflation.
According to Dr. Molla Alemayehu, the change of the bank notes will stabilize the economy and boost investment enhancing investors' confidence in Ethiopia. As the government strengthens the security of the financial sector, investors will invest in Ethiopia. This will play an important role in stimulating the country's economy.
Economist Wasihun Belay reinforces Dr. Molla Alemayehun's idea. The change of the bank notes allows the government to collect the money that is widely distributed in the market and helps control inflation.
"The change of the bank notes helps to separate healthy money from unhealthy ones. It creates an opportunity to identify anonymous, forged and corrupt funds. It also contributes to identifying individuals and organizations that work with healthy and unhealthy money and bringing them to the right truck. This is one of the benefits of the money change," he said.
According to Wasihun, the change will increase savings as it will bring all the money to the National Bank. As savings grow, it enables providing adequate funding to investors. If the government wants to borrow money from a bank to fill its budget deficit, it will have a chance to make enough money. If corporations get enough credit, the country will have enough production. If there is enough production, there will be employment opportunities for producers. When there are job opportunities, poverty is reduced.
"If the country can produce enough, it can export and earn foreign exchange," he said. In addition, if sufficient loans are provided to companies, small and medium enterprises that will replace imported products will be stimulated. Therefore, he said, the change in the currency will bring good opportunities.
Economists, on the other hand, raise concerns. Economists point out that the longer it takes to replace the existing banknotes with the new ones, the lower the amount of money in the economy. Hence, they suggest that great care must be taken.
The economics lecturer Dr. Molla Alemayehu said: "Efforts to control on those illegally deposited money and sanction on money laundering may also hurt the legal entities. This is happening even at the moment. All the money was confiscated just because the security forces were told to take control. This is not fair. The government needs to control this. If not, it is dangerous."
If a person is robbed of 100,000 or 200,000 in the name of illegality, it could do more harm than good to the economy. It is important to prevent this. To prevent this, the government should immediately address complaints to the security forces and accept complaints so that similar incidents do not recur.
Dr. Molla further explained that if the government does not follow up, it will open the door to other forces that seem to be legitimate and ready to commit illegal acts. It can hurt the legitimate trader and investor. If left unmanaged, they can be left astray and lose the right path. Therefore, the government must respond quickly to the problems and the monetary change must be carried out properly. If the change is not immediate, the consequences may take the upper hand than the benefits.
Everyone should play their part in making the money conversion process easier, said Dr. Molla. Citizens should obey the laws enacted and the government must enforce the laws properly. All citizens must abide by the guidelines for mutual benefit. It is said that it is impossible to trade large merchandise in cash. So the people must obey the law. The government, in turn, must implement the law properly. He explained that banks and government bodies should implement the guidelines without any discrimination.
Accelerating the change will help to achieve the goal of changing the money. In order to extend the new bank notes to all parts of Ethiopia, as to Dr. Molla Alemayehu, Banks have to use small financial institutions and cooperatives as widely as possible.
According to economist Wasihun Belay, though the distribution is done by the government; he shares Dr. Molla's idea of working together with all stakeholders for a healthy distribution. The money needs to be distributed and in line with this, information has to be provided in a short period of time.
The change of the money should be used to alleviate the problems that Ethiopians have been complaining about, such as the high cost of living, unemployment, inflation, lack of credit, foreign exchange deficit and lack of production. He said that this should be taken into account by all stakeholders.
According to Wasihun, more than 85 percent of the Ethiopian population is farmers and pastoralists and many people are currently displaced due to man-made and natural disasters. Thus, he said that efforts should be made to disseminate information so that these people can get the information and change their money quickly.
Wasihun emphasizes Dr. Molla's view that the change of the bank notes cannot be achieved by government efforts alone. Everyone must do their part to ensure a healthy distribution of the money. When people see illegal money movement, they should do their part, he said.
It is common in Ethiopia to run at the last minute, Wasihun said. The march is usually in the last days in the case of tax collection for example. But now this should not continue. If the money is distributed, it should be changed as soon as possible. If a person changes quickly, he or she can shorten his or her time. Therefore, it is important to change immediately.
According to Wasihun, in some areas all security forces have been involved in an activity that seems all money is illegal. But this is not appropriate. Legal money should not be confiscated. In Ethiopia, people earn money exerting a lot of effort. Therefore, those who have made money in this way should not have to worry about it.
He said that it is allowed to seize more than 1.5 million Birr by security forces, but they should consult with banks and other security agencies to determine if the money had been stored illegally or not.
Copyright The Ethiopian Herald. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English
