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The Adverse effect of counterfeit currency

Decryption-counterfeiting and the economy: what are the dangers?

More than 43 billion FCfa, that is the amount in counterfeit notes seized in Senegal between 2015 and 2016. This is at least what emerges from the information given by the newspaper L’observateur. This disturbing revelation makes Senegal a real country of counterfeiting.Indeed, despite the use by the issuing banks of complicated graphics that are difficult to reproduce and costly manufacturing processes that are unaffordable for counterfeiters, the counterfeiters keep up with them. All in all, what is counterfeiting, what are its impacts in the economy of the country, why does it persist?

  • What is it?

In legal jargon, “counterfeiting” refers to the counterfeiting of a currency. It refers to the crime of making, holding or using counterfeit currency. The legal basis for the Prohibition and punishment of this offence is article 119 of the Criminal code.The latter provides: “anyone who counterfeits, falsifies or tampers with monetary signs that are legal tender in the national territory or abroad shall be punished by hard labour for life and a fine ten times the value of the said signs and at least equal to 20,000,000 francs. If the culprit benefits from mitigating circumstances, the penalty cannot be less than five years of hard labour and 1,000,000 francs of fine “.In the light of that provision, it must be held that the legislature was required to penalise counterfeiting to the extent of its gravity.

  • Counterfeiting, the enemy of the economy

The counterfeiting of bank notes is not without consequences for an economy, especially like ours. Indeed, while the losses suffered by individuals and businesses who have received counterfeit banknotes are the tip of the iceberg, the uncontrolled spread of these banknotes is still causing more serious damage. On a larger scale, the consequences of this phenomenon are economic instability due to the loss of investor confidence in our financial systems.The confidence that is the main quality on which the central bank bases its credibility is thus seriously damaged. The list of impacts cited above is far from exhaustive. To put it simply, counterfeiting is a threat, not least, to developing countries like ours.

  • Why does the phenomenon persist?

When it comes to scrutinizing the factors that ensure a bright future for counterfeiting in Senegal, many reasons are cited. Indeed, in the opinion of some experts , the high rates of counterfeit currency recorded in Senegal are explained, in part, by the fact that law enforcement agencies gave only a low priority to investigating counterfeiting.The lack of public awareness of the overall economic impact of counterfeiting on the Senegalese economy would also be a factor. Some economists, on the other hand, index the informal sector, which in their view, favours counterfeiting because of the lack of control exercised there.In any case, it should be noted that this phenomenon is not new. Almost no country escapes it. It has sometimes even been used by some countries as an economic weapon to weaken enemy countries. The idea was to submerge the competing economy with counterfeit currency in order to lower the value of its currency. Our country would then have to redouble its efforts to overcome this dangerous phenomenon.