The Bank of Uganda (BoU) has explained how the growing misuse of banknotes is accelerating their deterioration and forcing the central bank into costly early replacements.
The clarification follows a warning issued last week cautioning the public against mutilating Uganda shilling notes, particularly through decorative cash bouquets and other gift arrangements that damage currency.
Speaking on NBS Morning Breeze on Monday, Milton Baluku, Assistant Director in charge of the Currency Department, said the central bank is constitutionally mandated to be the sole issuer and custodian of the national currency, overseeing its entire lifecycle — from production and circulation to withdrawal and destruction.
Under normal conditions, a Uganda shilling banknote is designed to circulate for between two and three years, depending on its denomination and usage patterns. However, that lifespan is significantly reduced when notes are stapled, pinned, glued, taped or otherwise mishandled.
“Once a banknote is mutilated, it is declared unfit and must be destroyed prematurely. Practices such as taping, stapling, pinning or gluing money — often done to make decorative bouquets — tear and weaken the notes, drastically shortening their lifespan,” Baluku said.
He explained that when damaged notes are withdrawn earlier than planned, the Bank is compelled to print and distribute replacement notes ahead of schedule.
“Printing, transporting and securely distributing banknotes requires public resources. When currency is destroyed early due to mishandling, the cost of replacement is ultimately borne by the public,” he said.
In its statement last Friday, BoU said it had observed a growing trend of currency mutilation, especially during festive periods when cash gifts are creatively arranged into flowers, bouquets and elaborate displays.
Kenneth Egesa, the Director of Communications and Public Relations at the Bank of Uganda, said such arrangements often involve harmful materials including glue, cello tape, pins, clips and other adhesives or fasteners that permanently damage the notes.
“The public is cautioned against any practice that mutilates, defaces or compromises the integrity of Uganda shilling currency,” the statement read.
According to the Bank, damaged notes cannot be processed by cash-handling infrastructure such as counting machines and automated teller machines (ATMs), making them inefficient and costly to manage within the financial system.
“These practices destroy the utility of banknotes, making them unusable in cash processing and distribution equipment,” the statement said.
BoU emphasised that while cash remains a legitimate and widely used form of gifting, it should be exchanged in its normal form to preserve its integrity and usability.
“We are not stopping people from giving cash gifts. We are simply encouraging responsible handling of money,” Baluku said.
He pointed to safer alternatives for gifting, including placing cash in envelopes or opting for mobile money transfers, electronic funds transfers (EFTs) and other digital payment platforms that do not compromise physical currency.
The central bank reaffirmed its commitment to safeguarding the Uganda shilling, noting that maintaining the quality and durability of notes in circulation is essential for ensuring confidence in the country’s monetary system.
BoU urged the public to handle currency responsibly, stressing that protecting banknotes ultimately protects public resources and supports the efficient functioning of the economy.
