The Grip on Money Intensifies as Cash Transactions in Property Sale Get Outlawed

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The Federal Documents Authentication and Registration Agency (DARA) is no longer accepting and validating property sale agreements made with cash payments.

The Agency introduced the new practice today, September 17, 2020, following the recent move of the National Bank of Ethiopia (NBE) that introduced a cash holding limit.

The Agency’s new requirement applies to both immovable and movable properties. Clients who want to authenticate their property sale contract will have to make the payment transaction through a bank and provide the bank transfer slip to the Agency.

Besides, the Agency, until it establishes a working system for the new arrangement, has temporarily stopped authenticating and registring property sale contracts, and those who want to sell their properties will have to have to be paitent.

The latest move of the Agnecy follows a set of new changes and regulations applied on the Ethiopian currency.  

Last month the NBE put a 1.5 million birr cap on the amount of cash that individuals and companies can set aside outside of banks or financial institutions with the view of easing the pressure on the economy and solving liquidity problems.

In addition, the government, on September 14, 2020, unveiled new birr notes with additional security features. Prime Minister Abiy Ahmed (Ph.D.) revealed, on a Facebook post, that the existing 10, 50, and 100 birr notes will ultimately be replaced, and the first 200 birr notes will join the market.

The replacement aims to collect the money circulated informally outside of the conventional financial institutions, as well as curbe corruption and contraband.

The Ethiopian Bankers Association states that more than 115 billion birr circulates outside of the country’s financial institutions in 2020.

The government also intends to forfeit Ethiopian currency found in other countries entirely. The Ethiopian birr is widely used in Ethiopia’s neighboring countries, especially in Somalia and Somaliland, as the currency’s exchange value compared to major international currencies, is better. 

The county spent close to 3.6 billion birr (97 million dollars) to print the new notes, and both the new and old notes will be used together until the replacement entirely takes place. 

Yinager Dessie (Ph.D.) Governor of the National Bank of Ethiopia stated that border control during the replacement period had been intensified, and strict regulatory measures are being taken.