West Africa’s central bank enrolled town criers, United Nations peacekeepers and even desert pilots as it pulled out all the stops for an unprecedented, 10-week campaign to swap old banknotes for new that ended last week.
The Central Bank of the States of West Africa (BCEAO), which controls the CFA franc currency used by eight nations in the region, hailed the campaign as a triumph. Old banknotes bound for the shredder had been mopped up by and large on deadline by December 31.
“It was a success,” Sambani Fall said from BCEAO headquarters in Dakar. “We’re still working on final figures, but we already know that in some countries it was a great success.”
In Benin and Togo, for example, 99% of old banknotes had been swapped for new. In other countries, the figure varied between 95% and 98%.
But whatever the final data, there are certain to be wads of worthless currency left over in far-flung corners of West Africa, a region where the poor often pile up their savings under beds or bury them under the earthen floors of their houses.
In Niger, the Consumer Council urged the bank to remember much is at stake.
“We must save peoples’ savings, help the innocent holders of banknotes”, said council president Nouhou Arzika.
There was also concern at the lack of facilities for people to change their cash in the rebel-held north of Côte d’Ivoire.
The BCEAO only operated one exchange centre for three days in the rebel capital, Bouake, right at the end of the operation. That was supposed to meet the demands of six million people in the rebel zone who have been forced to live without normal banking for more than two years.
Prevention of laundering
The scheme to withdraw 911-billion CFA francs (about R11,16-billion) of old notes issued since 1992 was launched on September 15, with the new series of notes supposed to be harder to forge. But the aim was also to prevent the laundering of buckets of cash robbed from BCEAO coffers over the past couple of years.
Rebels in wealthy Côte d’Ivoire, which alone accounts for 40% of West Africa’s monetary mass, are suspected of financing their two-year-old insurgency with the proceeds of a raid on the BCEAO’s head office in Abidjan in 2002.
Many more billions of notes that had been officially withdrawn from circulation were stolen in a subsequent raid on the BCEAO office in Bouake.
In Togo, an official who asked not to be identified, said 60-million CFA francs of stolen money had turned up during the banknote swap.
“The people who brought them in were not suspect,” the source said. “The notes had been through several hands so it was difficult to trace their origin.”
Also in Togo, a BCEAO director said the swap had been a frank success in the small tropical country wedged between Nigeria and Togo.
“We did everything we could to facilitate the currency exchange,” said Kouami Amekoudji. The bank used megaphones to rally people to makeshift bank counters set up at Lome’s central market, and in far-off villages town criers banged traditional gongs to let people know the old banknotes were about to be withdrawn from circulation.
In vast landlocked Niger, a country that is mostly desert, a chartered plane ferried loads of the new, brightly coloured, smaller bills to towns located in the arid north bordering the Sahara.
In Guinea-Bissau, about 400 police and 50 vehicles were drafted to transport the funds. A couple of boats were even roped into service to mop up old banknotes on small islands off the coast. In Mali, the bank set up more than 300 makeshift counters and sent teams to more than 130 locations to exchange the notes.
Tough job in Côte d’Ivoire
But the situation was toughest in the rebel-held north of Côte d’Ivoire, where banks closed down more following the outbreak of civil war in September 2002.
After neglecting the problem, the BCEAO only last week made a last-ditch, three-day bid to mop up old banknotes. It sent a 26-person team from the loyalist south to man bank booths temporarily set up in a United Nations building in Bouake, while members of the 6 000-strong UN peacekeeping force, backed by French troops and rebel soldiers of the New Forces, provided security.
“People are very disciplined; the operation is proceeding as planned,” said Colonel Alassane Fall, who commands UN forces in the Côte d’Ivoire rebel capital, Bouake.
In all, the BCEAO set aside 255-billion CFA francs in new banknotes to be exchanged in Côte d’Ivoire. By mid- to late December, 94,3% of the old notes had been removed, according to Yao Sahi Kablan, the BCEAO manager there.
But that still left 14-billion CFA francs to be collected in the country by the time the BCEAO team went into the rebel north. Much of it was in small bills and most of it was probably in the hands of poor farmers in remote villages, who traditionally keep their savings hidden at home. Any old notes left in their possession are now worthless.
In a region where many people live below the official poverty line on less than $1 a day, the smaller denominations, notes worth 500 CFA francs and 1 000 CFA francs, are the banknotes most in use at street markets, in public transport and for festivities such as weddings.
Just more than a week before the deadline expired, BCEAO Governor Charles Konan Banny said a large proportion of the smaller bills had yet to be exchanged.
“Ninety percent of the notes are in,” he told Burkina Faso television. “Now the small bills are coming in too. That is all according to plan.”
Shopkeepers refuse notes
Across West Africa in the days leading up to the December 31 deadline, shopkeepers and street sellers had been refusing payment in 500 and 1 000 CFA franc bills in fear of not being able to exchange them.
“I didn’t want to be paid in 500s and 1 000s because I didn’t know if I’d have time to get to the bank before the deadline,” said Christine Amava, who sells rice in Lome.
“I haven’t sold anything for days because of a lack of cash,” said Ami Sacko, who sells cosmetics in the Malian capital, Bamako. “Nobody will accept the 500 CFA banknotes and there aren’t enough new 500 CFA franc coins available.”
In Bamako, BCEAO director Adama Coulibaly, said just before the close of the operation that 97% of the old banknotes in circulation in Mali — 99,5-billion CFA francs — had been exchanged.
In Guinea Bissau, officials said 98,5% of the 10,4-billion CFA francs in circulation had been converted into crisp new notes.
But fears lingered that the poor would lose out.
“There really should have been more time for the swap,” said Moussa Aboubacar, a trader at the main market in the Niger capital, Niamey. “In spite of the communications campaign, farmers probably still have old notes.”
Before the close of the campaign, BCEAO spokesperson Madior Sylla had said the bank had given its eight member states ample warning about the currency swap.
“We’ve done everything we could to make sure people swapped the banknotes. We sent messages out on radio, not just national radio, but rural stations and community and religious networks,” he said.
The CFA franc, which is backed by the French treasury, was introduced in 1945 to provide the then French colonies with a stable currency.
Originally tied to the French franc, it is currently pegged to the euro at a rate of 656 CFA francs to one euro. The BCEAO issues the currency in Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo.
The currency is also used by seven Central African states. These have their own central bank and use different notes, which are due to be swapped for a new series in early 2005. — Irin