Giesecke+Devrient: From Zimbabwe’s Economic Collapse to Ethiopia’s Sovereignty Threat?
Giesecke+Devrient (G+D), a German company specializing in secure payment and identity technologies, has a controversial track record in Africa. Most notably, it played a pivotal role in Zimbabwe’s devastating hyperinflation crisis by supplying security paper for the country’s banknotes. Now, the company is turning its attention to Ethiopia, proposing to design a Central Bank Digital Currency (CBDC) for the National Bank of Ethiopia (NBE). This move raises serious concerns about Ethiopia’s economic sovereignty and the potential risks of foreign interference in a nation renowned for its resistance to colonial domination. In addition to Germany, Giesecke+Devrient has printed banknotes for other various countries through the years, including Cambodia, Croatia, Ethiopia, Guatemala, Jamaica, Lithuania, Peru, Zaire, and Zimbabwe, profiting again from printing banknotes that cause hyperinflation. In Japan, G+D is active in the fields of cards and banknotes.
G+D’s Role in Zimbabwe’s Hyperinflation
During the 2000s, Zimbabwe experienced one of the worst economic collapses in history, driven by hyperinflation that peaked at an unimaginable 79.6 billion percent in November 2008. The government, led by Robert Mugabe, recklessly printed money to cover fiscal deficits and fund failing policies, leading to the collapse of the Zimbabwean dollar. Giesecke+Devrient’s supply of security paper for banknotes was critical to sustaining this disastrous monetary policy.
As the Reserve Bank of Zimbabwe churned out increasingly worthless currency, millions of citizens were plunged into extreme poverty, unable to afford basic necessities. The economy spiraled into chaos, and the humanitarian toll was catastrophic. Amid mounting international criticism, G+D cut ties with Zimbabwe’s central bank in July 2008, but by then, the damage had already been done. The company’s role in enabling such economic destruction remains a stark example of how corporate actions can exacerbate national crises.
Targeting Ethiopia: A New Frontier for G+D
Now, Giesecke+Devrient is proposing to research and design a Central Bank Digital Currency (CBDC) for the National Bank of Ethiopia. At first glance, a CBDC may seem like a step toward modernization, offering digital solutions for financial inclusion, faster transactions, and improved monetary control. However, when viewed in the context of G+D’s history and the potential implications for Ethiopia, this development warrants deep scrutiny.
Risks to Ethiopia’s Sovereignty
Ethiopia holds a unique position in African history as the only nation to successfully resist colonization during the Berlin Conference’s imperial scramble for Africa. Its sovereignty is a source of immense national pride and a symbol of resilience. Allowing a foreign corporation with a contentious past to design the country’s digital currency infrastructure could jeopardize this legacy in several ways:
1. Economic Dependency: A CBDC designed by an external entity could make Ethiopia’s financial systems dependent on foreign technology and expertise. This dependency may erode the country’s ability to independently manage its monetary policy.
2. Data Sovereignty: Digital currencies require robust data management systems. Entrusting G+D with the design of Ethiopia’s CBDC raises concerns about data privacy and the potential misuse of sensitive financial information.
3. Control and Manipulation: A CBDC could give the Ethiopian government powerful tools to control and monitor transactions, but if the system’s design is influenced by external parties, it may also expose the country to foreign interference or manipulation.
4. Historical Parallels: G+D’s involvement in Zimbabwe demonstrates how its products can be used to perpetuate harmful economic policies. Ethiopia must consider whether it is wise to entrust such a critical aspect of its economy to a company with a track record of enabling economic crises.
The Ethical Responsibility of Businesses
Giesecke+Devrient’s actions in Zimbabwe highlight the ethical dilemmas faced by multinational corporations operating in politically and economically unstable environments. While businesses seek profit, their decisions can have far-reaching consequences for the populations they serve.
In Ethiopia, G+D must be held accountable for how its proposed CBDC project aligns with the country’s long-term interests and sovereignty.
A Call to Action
Ethiopians and the global community must critically evaluate G+D’s involvement in the country’s financial future. Ethiopia’s history of resisting external domination makes this an issue of both national pride and economic survival. Policymakers, activists, and citizens should demand:
1. Transparency: Full disclosure of the terms of G+D’s partnership with the National Bank of Ethiopia, including safeguards for data privacy and economic independence.
2. Accountability: Mechanisms to ensure that the CBDC system benefits Ethiopian citizens without exposing the country to undue foreign influence.
3. Alternatives: Exploration of local or regional solutions for developing Ethiopia’s digital currency infrastructure to minimize reliance on foreign entities.
Conclusion
Giesecke+Devrient’s involvement in Zimbabwe’s hyperinflation crisis serves as a cautionary tale for Ethiopia. As the company shifts its focus to designing a CBDC for the National Bank of Ethiopia, the risks to the nation’s sovereignty and economic stability cannot be ignored. Ethiopia’s legacy as a symbol of African independence is at stake, and it is up to its people and leaders to ensure that history does not repeat itself.