Ethiopia is spending $ 97 Million (KSh 10.5 Billion) to print new banknotes, a move authorities say will lock out illicit financial flows, hoarding, and other illegal activities.
According to Prime minister Abiy Ahmed, the new notes possess improved design and security features that will make it difficult to produce counterfeit Birr notes.
The new banknotes are in denominations of 10, 50, 100 and 200. The Ethiopian government intends to turn the 5 Birr note into a coin format.
Ahmed said in a statement that money outside the banking system has been rising, affecting how commercial banks can turn assets into cash. He added that outside money has been financing corruption and illegal trade activities.
Quartz Africa reports Ethiopia last introduced a new currency at the end of the Ethiopian-Eritrean civil war two decades ago.
Recent studies by Transparency International show that Ethiopia is among the top 10 African nations with high illicit financial flows related to trade mispricing.
This involves over-invoicing imports and under-invoicing exports, thus transferring cash abroad without detection by evading taxes and avert capital controls.
According to the IMF, the top four emitters of illicit flows—South Africa, the Democratic Republic of the Congo, Ethiopia, and Nigeria—emit over 50% of all illicit financial flows originating from the continent.