Wednesday, March 9, 2011
WAIFEM Regional Workshop In Gambia
NEWS BANJUL THE GAMBIA (MB)- A five-day regional workshop on “Banknote and currency management and forecasting in Central Banks” organised by the West African Institute for Financial and Economic Management fondly called WAIFEM, in collaboration with De La Rue, kicked off on Monday, 7th wind up 11th March, 2011.
The regional workshop, underway at the Paradise Suites Hotel, Kololi, drew participants from Ghana, Liberia, Nigeria, Sierra Leone and The Gambia.
“A regional workshop on Banknote and currency management and forecasting in Central Banks would not have been more appropriate given the fact that our economies remain predominantly cash-based; reflecting the preference of economic agents, the weakness of the legal system to enforce contracts, and the level of the development of payments systems in our countries,” the WAIFEM Director General, Professor Akpan H. Ekpo said in his welcoming remarks.
He buttressed that this maiden workshop could not have come at a more auspicious time, given the problems of currency management in our countries and the urgent need to chart a new direction consistent with best practices, in order to engender greater efficiency and minimize the cost of printing and minting currency.
“Indeed,” he continued, “no central bank function is more visible than currency management”.
According to him, a currency integrity and efficient support are unequivocal every day indicators of a well-functioning central bank. In the eyes of the people, WAIFEM DG went on, the integral central bank function should be efficient, meet demand and also present minimal issues which, he added, may damage the reputation of the country. However, of particular concern is the issue of counterfeiting, which is said to be as old as money itself,.
And, Ekpo added that counterfeiting continues to present a potential danger to national economies and financial losses to consumers. Worse of all, he lamented, recent developments in photographic and computer technology, as well as printing devices have made the production of counterfeit money relatively easy thereby increasing the potential threat.
Generally, he noted, the major challenge to protect currencies from counterfeiters has increasingly become more dependent on partnerships between law enforcement agencies, financial institutions and central banks, as well as with the security printing industry and high-grade supplier’s community.
These partnership bridge geographic, jurisdictional, cultural and organisational divisions, which were once impediments toward providing comprehensive and co-coordinated solutions for combating modern financial crises, so stated the DG.
In conclusion, Professor Ekpo told the audience, “It is my expectation that the distinguished participants at this workshop will come up with workable solutions to cash and currency management problems in our countries.”
Delivering his keynote address, Mr. Amadou Colley, Governor of Central Bank of The Gambia (CBG) stated that currency management is a critical aspect of central banks’ functions.
He pointed out that the integrity of the currency and efficient supply of banknotes are indicators of a well-functioning central bank, especially in preponderantly cash-based economies, citing member states as a good example.
“Issuing and destroying cash, maintaining note quality and guarding against counterfeit notes is a complex business and is increasingly costly,” said Colley, as he pointed out that some organisations have responded to this growing trend by out sourcing currency sorting.
Central Bank Governor Colley also noted that the International Organisation for Standardization’s (IOs) certification ensures that minimum international quality standards are adhered to in the systems and procedures followed in an organization.
Citing some of the qualities, Colley said for currency managers, note designs present a series of interlocking challenges.
He remarked on: “New designs must win public acceptance, incorporate requisite security features and meet durability and machine processing standards.
“Fitness standards for currency in circulation must be set and monitored whether currency sorting is carried out in house or outsourced.”
The Governor also told the workshop that the proliferation of Automated Teller Machines (ATMs) has had a considerable impact and sharpened the focus for both commercial and central banks.
He disclosed also that the growing network of ATMs has also affected the compositional shift from lower denomination notes to higher denomination notes, stating that “the banks do not find it commercially viable to stock the machines with lower denomination notes because they run out sooner and increase both the capital cost and operating costs”.
He maintained that efficient and effective currency management commences with a strategic analysis of the currency life-cycle. However, strategic management of currency is impossible with out accurate forecasters of the demand for banknotes, as said by Colley. He went on to explain that the long lead time involved in banknote production makes it vital from cost and reputational point of view that central banks forecast the demand for banknotes as accurately as possible. Indeed, the benefits of accurate forecasting are obvious, the gathering was told by Colley as he went on to add that it encourages more efficient procurement and reduces stock holding costs.
In other words, he said, a disciplined, balanced approach to currency management reduces opportunity losses and thus enhances the smooth functioning of the banking system.
The regional workshop course is expected to cover New challenge in currency management; New Directors in Banknote Design; Security features against counterfeiting; forecasting the Demand for Banknotes, and country case studies on currency management.
WAIFEM, it could be noted, was established in July 1996 by the Central Banks of the Gambia, Ghana, Liberia, Nigeria and Sierra Leone, with the mandate to build sustainable capacity for improved macroeconomic and financial sector management in the countries member central banks.
Mr. Gabriel Asante, Programme Manager Macroeconomic Management, Department WAIFEM delivered the vote of thanks.