By Grace Gilo
The National Assembly Departmental Committee on Finance and National Planning has requested that the Central Bank of Kenya (CBK) to avail comprehensive documentation regarding the recent procurement of new currency valued at Kshs. 689 billion for scrutiny.
This is to assist the Committee in verifying that the appropriate procedures were adhered to during the process.
The directive follows even as the Bank through the Central Bank Governor, Dr. Kamau Thugge assured the Committee that the procurement of new banknotes by German firm Giesecke+Devrient Currency Technologies GmbH (G+D) for €103, 229,000 (about Kshs. 14.8billion) at the current exchange rate was above board.
During his appearance before the Committee, chaired by Hon. Kuria Kimani, Dr. Thugge explained that the decision to procure new banknotes was made in response to the potential risk of a shortage of banknotes, which could have serious economic and national security consequences.
“Hon. Chairperson, the classified procurement was undertaken to avert a stock-out crisis. The procurement process was conducted in accordance with the Public Procurement and Asset Disposal Act (PPADA), and with the approval of the National Security Council and the Cabinet. The contract was reviewed and approved by the Attorney General as required by law before execution by the Parties”, Dr. Thugge told the Committee.
The lawmakers, led by the Chairperson, pressed the Governor to explain the necessity of printing new currency within a span of five years, particularly in light of the substantial costs associated with the process.
The Bank launched the current generation currency banknotes in 2019 whereby, the old generation 1,000-shilling banknote was withdrawn.
According to the Bank, notes worth Kshs. 689 billion are set to be printed, which will include 460 million notes in the Kshs. 50 denomination, 690 million notes in the Kshs. 100 denomination, 260 million notes in the Kshs. 200 denomination, and 170 million notes in the Kshs. 500 denomination.
Additionally, 460 million notes will be printed in the Kshs. 1,000 denomination.
The new currency is already in circulation in the Kshs. 1,000 denomination, bears the signature of the Governor of the Central Bank of Kenya, Dr. Kamau Thugge, that of the Principal Secretary, National Treasury, Dr. Chris Kiptoo, the year of print – 2024, and new security threads with colour changing effects that are specific to each denomination.
Governor elaborated that these modifications align with the traditions of the CBK and that they had sought the advice of the Attorney General.
Thugge further clarified that the existing currency will remain legal tender, emphasizing that the decision to print new currency does not imply any form of demonetization.
In the meantime, Hon. Kimani has urged the CBK to consider commemorating Kenya’s heroes, such as athletes, on new banknotes as a gesture of appreciation for their contributions to the nation’s profile.
However, Mr. Paul Wanyagi, the Bank’s Director of Currency Operations, pointed out that while this is a commendable proposal, there is currently no legal provision to facilitate it.
When lawmakers inquired about the possibility of developing higher quality notes that would not require frequent replenishment, Mr. Wanyagi noted the necessity of educating Kenyans on proper money handling, as rough treatment, particularly of lower denomination notes, has led to their regular withdrawal from circulation.