Mandela money: Spend it or keep it?
If you are lucky enough to find one of the five million new commemorative Nelson Mandela R5 coins, would you trade it for a loaf—pardon, half a loaf—of bread?
The hype surrounding the 1994 presidential inauguration R5 coins and 2000’s Nelson Mandela R5 coins shows no signs of abating. These coins can sell for more than 20 times their face value, and the new Mandela coin promises to create similar demand.
The authorities have made it clear that the new R5 coin, launched to coincide with Madiba’s 90th birthday on July 18, is normal legal tender.
It pays tribute to a great man and is not meant to be a collector’s item.
Conventional numismatic wisdom says that the large number of new coins minted—five million of them—precludes it from ever becoming an “investment coin”.
However, nothing about the former South African president fits convention. Everything related to Madiba—including coins bearing his likeness—seems to acquire a special aura. That is probably why the authorities felt it necessary to urge South Africans to spend, rather than hoard, the new coin.
“Do use it to buy goods and services,” said South African Reserve Bank Governor Tito Mboweni when announcing the launch of the new coin.
If the fate of the earlier coins associated with Nelson Mandela is anything to go by, those scrutinising their loose change for a 2008 Mandela coin will likely be disappointed.
There are several Mandela commemorative coins, minted in small numbers, and some of them may indeed appreciate considerably with time. There also Mandela medallions, which normally derive their value from the precious metals they comprise.
Then there are ordinary Mandela coins, which is where things get complicated.
Johannesburg Coin Exchange experts explain that ordinary coins, meant to be used as legal tender in a country, are divided into three board categories: proofs, and uncirculated and circulated coins. Moreover, each category has several sub-categories and numerous degrees. To simplify, the proofs and uncirculated coins are fewer in number. The modern proofs are packed in boxes or plastic holders, and uncirculated coins come in laminated plastic.
Proofs and uncirculated coins are the categories where real treasure may reside. This is especially true of several rare Mandela coin proofs, which have been known to reach high prices, thus igniting the imagination of every Tom, Dick and Harry with a few coins jiggling in their pockets.
Currently, a set of Nobel Prize laureates Mandela and De Klerk coins, described by the seller as “a very rare PF 70”, is up for grabs for R750 000 or more at local auction website Bidorbuy.co.za. It’s hard to tell how much of the high asking price can be attributed to Mandela’s 90th birthday celebrations this week.
In the eyes of true collectors, it is much more bewildering that ordinary circulated, or second-hand, Mandela R5 coins are vying for potential buyers alongside proofs and other pedigreed items, occasionally achieving 10 or more times their “real” value.
Against such a background, the odds are that the 2008 Mandela R5 coins will disappear from circulation and appear on auction websites and in other trading places before the nation and the world have finished expressing their best wishes to Madiba on his birthday.
Many South Africans doubtlessly feel like one blogger who goes by the name of “flxy”.
“Why would you want to spend a coin that depicts Nelson Mandela, given the previous track record of circulation coins featuring Mandela?” writes flxy on his or her blog, adding: “Surely, a coin depicting one of the greatest statesmen should be something that would endear itself to the holder?”