The Democratic Republic of Congo (DRC) has emerged as a key center for the production, transit, and distribution of counterfeit currency, particularly fake U.S. dollars.
This is according to Oluwole Ojewale, Regional Coordinator for the ENACT Organized Crime Observatory for Central Africa at the Institute for Security Studies (ISS), in an article published on Thursday.
Criminal networks operating in the underground economy exploit porous borders and informal trade routes to circulate these counterfeit notes.
This phenomenon, which extends far beyond Congolese borders, poses a serious threat to both local and regional economies, as well as the security of neighbouring countries, Ojewale warns.
In February 2021, Ugandan police arrested eight individuals, mostly from the DRC, with $2.4 million in counterfeit U.S. dollars intended for circulation in Uganda and the wider region, Ojewale reports. More recently, in January 2023, Ugandan tax authorities intercepted a Congolese trafficker carrying $500,000 in fake bills hidden in his luggage.
These incidents are just the tip of the iceberg, as the circulation of counterfeit money remains vastly underreported. An INTERPOL liaison officer, speaking anonymously, noted that only about two cases are reported annually in the DRC, a figure that fails to reflect the true scale of the trafficking.
Local markets and small businesses, often ill-equipped to detect counterfeits, are the primary targets of these illicit activities.
Severe economic and security consequences
The spread of counterfeit currency has dire repercussions for the Congolese and regional economies. It drives currency devaluation, inflates the prices of goods and services, and inflicts substantial financial losses on businesses.
Moreover, counterfeit money is frequently used to fund broader criminal enterprises, including human trafficking, drug smuggling, and even terrorism. In 2021, Congolese police seized weapons, fake dollars, and counterfeiting equipment during an operation in Bukavu, exposing the links between these networks and more serious illegal activities.
The dollarisation of the Congolese economy—stemming from hyperinflation and the devaluation of the Congolese franc in the 1990s—has worsened the problem. Today, roughly 90% of banking system assets are denominated in U.S. dollars, and the currency is widely used for major transactions. A 2001 law even guarantees the free use of foreign currency in transactions, inadvertently facilitating the circulation of fake bills. This reliance on the dollar leaves the DRC particularly vulnerable to counterfeiters.
To combat this issue effectively, several measures are needed, Ojewale argues. Strengthening the capabilities of law enforcement, financial investigation units, and the judiciary is essential.
“Accurate and relevant data collection is a critical component of the response. East and Central African countries must also enhance cross-border cooperation to monitor and dismantle these criminal networks,” he explains.
The Central Bank of the DRC has a pivotal role in safeguarding the integrity of banknotes. It must ramp up efforts to educate and train the public, businesses, and law enforcement on banknote security features.
“Investing in new technologies to detect counterfeit bills and accelerating prosecutions against offenders is also vital,” Ojewale adds.
Finally, to reverse the trend of dollarisation, Congolese authorities must tackle inflation and restore confidence in the local currency. This will require deep economic reforms and sustained political stability.
ARD/te/sf/lb/as/APA