By Richard Giedroyc, World Coin News November 21, 2009

It may have a modest exchange rate value of about eight cents US (It takes 12.56 birr to equal one US dollar, according the most recent issue of MRI Banker’s Guide to Foreign Currency), but frugal Ethiopia has recently recognized it is more economical to have a 1-birr coin rather than a 1-birr bank note in circulation.

The October 19 issue of the publication Addis Fortune reported the National Bank of Ethiopia has been studying the value of issuing the denomination as a coin rather than as a paper bank note for about two years, concluding that while a bank note of the 1 birr denomination circulates for about three years a coin of the same value should circulate for 20 years.

NBE Governor Teklewold Atnafu told Addis Fortune, “We have reached a consensus after talks with the prime minister’s office five months ago.”

Although the decision to issue a coin has been reached, there are other logistical matters still to be addressed. While it has been confirmed that the standard lion’s head will appear on the obverse of the new coin the reverse design has yet to be determined. The reverse design will be selected from among a collection of proposed designs at the NBE.

Addis Fortune reported, “Whether or not the new coin should be engraved or minted with aluminum has yet to be decided, depending on the offer made by the bidding companies.”

A clarification is needed regarding what the publication meant by “engraved or minted,” but the “bidding companies” are several mints outside Ethiopia that are currently bidding for the contract to make the new circulation coinage.

Bidding for the contract opened Oct. 15, but the results were not available in time for this article. The five bidders were from Australia, Canada, France, Germany, and Great Britain. The NBE reported the French company Francois-Charles Oberthur is supplying 50- and 100-birr bank notes currently in circulation, while the 1- and 5-birr denomination notes are supplied by the British security printing firm De La Rue.

The specifications for the new coinage contract include that the coins must be acceptable in vending machines as well as in coin operated telephones of the Ethiopian Telecommunications Corporation. The winning bidder will be required to produce 411 million coins, which must be delivered within eight months of the signing of the contract. The date or dates to appear on these coins was not addressed. A committee was to select the mint within three weeks of the bidding, then submit its finding to the NBE. Plans call for the coin and bank note to circulate concurrently, with the bank note being phased out within three years.

Coins are currently in circulation in Ethiopia in denominations of 1, 5, 10, 25, and 50 cents. It takes 100 cents to equal one birr. The 1-birr bank note has been in use for 57 years. The current note depicting a vignette of a young man on the front and of a bird and waterfalls on the back was introduced in 1997. It appears the demise of the 1-birr bank note was almost a certainty.

Addis Fortune reported, “The note was not the NBE’s favorite as it aged fast and cost a lot of money and time for disposals. It regularly accounted for half the volume of notes NBE disposed of.”

Regardless if a coin or a bank note of this denomination circulates in Ethiopia it may not make any difference to visitors. The most current issue of MRI Banker’s Guide to Foreign Currency reports, “Visitors must pay hotel and car rental charges with hard currencies. Reconversion requires proof of prior hard currency exchange, but it is difficult.”

More Resources:

• Standard Catalog of United States Obsolete Bank Notes 4-CD Set, 1782-1866

• Fascinating Facts, Mysteries & Myths About U.S. Coins

• 2010 Standard Catalog of World Coins 2001-Date, 4th Edition

• State Quarters Deluxe Collector's Folder