The Bank of Namibia (BoN) has intensified its efforts to maintain the integrity and quality of the national currency, withdrawing a record N$2.8 billion in unfit banknotes from circulation in 2024, according to its latest annual report. This marks a significant increase from the N$2.4 billion removed the previous year, driven largely by the phased introduction of modified N$100 and N$200 banknotes, which prompted a surge in the retirement of older, degraded notes. The move underscores the central bank’s commitment to ensuring that Namibians transact with clean, secure, and durable currency, even as it balances the logistical complexities of modernizing cash management systems and responding to evolving market demands.
The heightened withdrawal of unfit notes, particularly the N$100 and N$200 denominations, aligns with the BoN’s strategy to introduce enhanced security features and updated designs. On 4 April 2024, the central bank unveiled a modified N$100 note in Lüderitz, featuring the current Governor’s signature as a Level 1 security feature, while retaining existing anti-counterfeiting elements such as watermarks and holographic strips. This release followed the 2023 rollout of a redesigned N$200 note, part of a broader initiative to stay ahead of counterfeiters and improve public confidence in the currency. The BoN emphasized that all modifications were executed in strict compliance with the Bank of Namibia Act and its Currency Design and Production Policy, ensuring alignment with international standards for durability and security.
To streamline these operations, the BoN completed its Integrated Cash Management System (ICMS) Project in 2024, a technological overhaul aimed at automating currency transactions between the central bank and commercial banks. Launched in 2023, the ICMS went live in two phases: the first in March 2024 focused on automating withdrawals and deposits, while the second in May 2024 integrated real-time tracking and reconciliation tools. This system has slashed manual processing errors, reduced operational risks, and accelerated the flow of cash through the economy. “The ICMS represents a leap forward in efficiency,” the report noted, highlighting how the project has fortified Namibia’s cash supply chain against fraud and administrative bottlenecks.
Despite withdrawing more unfit notes, the BoN issued N$9 billion in new banknotes in 2024—a 10% drop from 2023—reflecting a strategic adjustment to market needs. The total number of banknotes issued fell from 105 million to 98 million pieces, while coin issuance declined from 18 million to 13 million pieces. However, currency in circulation grew by 6.9% to N$5.6 billion, signalling robust demand for cash despite global trends toward digital payments. The N$20 note emerged as the most sought-after denomination, with issuance soaring by 28.4%, while the N$10 and N$50 notes saw steep declines of 22.4% and 26.9%, respectively. Analysts attribute this shift to changing consumer preferences and businesses favouring smaller denominations for everyday transactions, particularly in retail and informal sectors.
Coin circulation patterns also shifted markedly, with the N$0.50 piece dominating demand at a 114.8% increase, followed by the N$1 coin at 4.2%. This surge in lower-denomination coins reflects heightened retail activity, where small change remains critical for customer transactions. Overall, coin usage rose by 4.6%, while banknote circulation climbed 7.1%, underscoring cash’s enduring relevance in Namibia’s economy. Notably, the N$5 coin accounted for 45% of all new coins issued, valued at N$13 million, despite a drop in total pieces minted.
The BoN’s report also revealed progress in combating counterfeiting, with fake banknotes declining by 10.7% to 75 incidents in 2024, down from 84 the previous year. Most counterfeit notes were low-quality imitations of the N$200 denomination, followed by the N$100 and N$50. Reassuringly, the ratio of counterfeit notes to genuine currency in circulation remained far below the BoN’s threshold of 10 pieces per million, settling at 1.63—a marginal increase from 1.43 in 2023 but still indicative of robust anti-fraud measures. “The security features on our modified notes are proving effective,” the BoN stated, crediting public awareness campaigns and collaboration with law enforcement for the decline.
Behind these statistics lies a delicate balancing act. While the BoN works to withdraw aging notes and introduce secure replacements, it must also respond to fluctuating demand across denominations. The dramatic rise in N$20 notes—now the most issued denomination—highlights the public’s preference for mid-value cash, likely driven by its versatility in both urban and rural markets. Conversely, the steep drop in N$10 and N$50 notes suggests commercial banks are optimizing their cash inventories to match transactional patterns, reducing stockpiles of less-used denominations.
The central bank’s efforts to maintain “high-quality currency” extend beyond design and security. The 2024 annual report emphasizes the BoN’s role in stabilizing the money supply amid economic headwinds. Bulk cash deposits by commercial banks dipped slightly by 2.4% to N$8.9 billion, reflecting tighter liquidity management by financial institutions. Meanwhile, the value of new banknotes issued remained steady at N$3 billion, with the N$200 note dominating at 52% of total issuance—a testament to its role in high-value transactions and savings.
Critics, however, question whether the BoN’s focus on physical currency aligns with global digital payment trends. While cash remains king in Namibia, particularly in rural areas with limited banking infrastructure, the report acknowledges the need for “future-ready” policies. The ICMS Project, for instance, not only modernizes cash handling but also lays groundwork for potential integration with digital financial systems, ensuring the central bank remains agile in a rapidly evolving financial landscape.
For now, the BoN’s achievements in 2024 paint a picture of an institution navigating complexity with precision. By withdrawing unfit notes, introducing secure replacements, and deploying cutting-edge cash management tools, it has bolstered public trust in the Namibia Dollar. Yet challenges persist: counterfeiters continue to target high-value notes, inflation pressures linger, and the demand for certain denominations remains volatile.