Ethiopia is spending approximately Ksh 10.5 billion to print new banknotes. This is a relatively lower amount compared to what Kenya spent on the same.
Kenya spent Ksh 15 billion to print new banknotes when it was changing its currency. Both countries decided to change their currency to lock out illicit financial flows, hoarding, and other illegal activities.
According to Ethiopian Prime minister Abiy Ahmed, the new notes possess improved design and security features that will make it difficult to produce counterfeit Birr notes.
Kenya was first to change its currency cases of corruption increased in the country. However, the cost of printing the new notes raised controversial opinion across the country.
Central Bank governor Patrick Njoroge defended the cost saying that the it nearly matches what Kenya would have used annually over the next three years to replace ageing and defaced currencies, a pointer that the new currencies are expected to last beyond June 2022.
The Ethiopian government said that money outside government was rising and affecting how commercial banks can turn assets into cash. The Prime Minister said that outside money has been financing corruption and illegal trade activities.
Quartz Africa reports Ethiopia last introduced a new currency at the end of the Ethiopian-Eritrean civil war two decades ago.
Recent studies by Transparency International show that Ethiopia is among the top 10 African nations with high illicit financial flows related to trade mispricing.
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