Rising metal costs complicate coin series update

The Bank of Namibia will update its coin series for the first time in 32-years, and has expressed concern that while the measure was necessary, rising metal costs would impact its ability to produce the new series as effectively as possible.

This is according to BoN governor Johannnes !Gawaxab who said that one key reason for the redesign was due to negative seigniorage, which occurs when the cost of producing a currency exceeds its face value.

The cost of the metal and the manufacturing process can sometimes be higher than the coin's denomination, resulting in a mint producing a 5 cent coin at double its value for 15 cents. This is most commonly seen with coins.

!Gawaxab made the remarks at the launch of a new commemorative note in honour of late president Hage Geingob, who passed away last February.

“This needs to be addressed promptly to optimise resources, manage negative seigniorage, and maintain a stable currency system,” !Gawaxab stated.

The move was further necessitated to ensure the central bank was keeping to international best practices.

“Our coins have never been upgraded since their first issuance in 1993. As per policy and industry best practice, a review should take place every 6-8 years, which is essential to ensure currency security, durability, and cost-effectiveness. Upgrading security features helps to prevent counterfeiting, while technological updates maintain competitiveness,” !Gawaxab said.

Meanwhile, touching on the launch of a new N$60 commemorative denomination, !Gawaxab said it was in line with the central bank’s tradition to issue high-quality bank notes.

“The Bank of Namibia proudly introduces the ‘Dr Hage G. Geingob N$60.00 commemorative banknote’ as part of the stellar tradition of issuing high-quality banknotes and coins in which the Namibian public has trust and confidence,” !Gawaxab said.

“Issuing the 60 Namibia dollar banknote may prompt inquiries regarding its significance. The explanation underscoring the denomination of 60 is straightforward: Dr Geingob devoted 60 years of his life to the selfless service of this nation, encompassing his time in exile, his return, and his leadership in an independent Namibia,” he added.

In paying tribute to Geingob, President Nangula Mbumba said the former statesman had dedicated 6 decades of his life to Namibia, in line with the launch of the N$60 commemorative denomination.

“This commemorative banknote cements Dr Geingob’s vision, which was not only for economic recovery and growth but also for shared economic prosperity for all Namibian citizens, in the spirit of his famous motto that ‘No one should feel left out from the Namibian House,’” Mbumba said.