CHAMWE KAIRA
Although several retailers have said there is a shortage of five cent and 10 cent coins in circulation, the Bank of Namibia maintained this week that there is not a shortage of 10 cents.
“The bank however discontinued the minting and the issuance of five cents in 2019 which is placing undue pressure on the 10 cent coin denomination. The bank is considering long term strategies to alleviate this pressure,” said Kazembire Zemburuka, Director of Strategic Communications and International Relations at the Bank of Namibia.
SBV Namibia, the company which collects banknotes and coins for distribution to shops, recently told retail shops that there was a shortage of five cent and 10 cent coins in its holdings.
In a notice shared by one of the retailers with Observer Money, SBV said due to the shortage it would not be able to serve the retailer with the order of the coins.
But Zemburuka said the perceived shortage is as a result of the hoarding of coins by the public. He urged members of the public to exchange all excess coins with their commercial banks or at the Bank of Namibia branches in Windhoek and Oshakati.
Some shops in Windhoek have not been giving change to customers citing the shortage of coins in circulation. Zemburuka said the rounding off principles should always be done in favour of the customers.
“Hence if there are specific concerns around this, the customers can contact the Bank of Namibia to raise the said concerns,” he said.
Zemburuka said Bank of Namibia is not in the process of withdrawing the 10 cent coin denomination as they are still being minted and issued by the Bank of Namibia as legal tender, deemed necessary for the current coin denomination structure and the economy at large.
In April 2019, the central bank announced that the production of the five cent coin has been discontinued as of 1 January 2019. The coin remained a legal tender in Namibia and accepted as a way of payment at local retailers and businesses indefinitely.
The bank said that the decision to discontinue the making of the five cent coin was because of the low recycling of the coins, while the accumulation of the coin by members of the public in their households has increased. The bank said this resulted in unnecessary pressure being exerted on the five cent coin denomination, given the current high withdrawal rate noted by the bank over the past few years.
The central bank added that the handling of five cent coins had become exorbitant for commercial banks and retailers and that the five cent coin had a low purchasing power, compared to other denominations in terms of the number of goods or services that the five cent coin can buy.
