The Central Bank of Kenya (CBK) governor Kamau Thugge has revealed the German firm awarded the tender for printing new bank notes.
While appearing before the National Assembly’s Finance Committee on August 21, Thugge disclosed that the German firm Giesecke+Devrient Currency Technologies GmbH (G+D) secured the contract to print the new banknotes.
This follows summons by MPs for CBK Governor Thugge to explain the details of a contract with the German firm for printing the new banknotes.
In his response, Thugge assured the Committee that the procurement, costing €103,229,000 (about Ksh 14.8 billion), was conducted transparently.
“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,” Thugge told the Committee.
CBK Governor Explains Why Bank Notes were Changed
Thugge was also tasked to justify why the Bank needed to print new currency in under a period of 5 years, especially given the huge expense the process is set to incur.
He told the committee that the move to change bank notes was taken after realization that the country was at a risk of stockout of bank notes particularly the Ksh 1000, with grave economic and national security implications.
Thugge added that change was also meant to align the process of procuring currency to global practice where most countries procure currency in a classified manner.
According to the Bank, notes worth Ksh. 689 billion are set to be printed. They include 460 million notes in Ksh. 50 denomination, and 690 million notes in Ksh. 100 denominations.
Furthermore, the deal will also see 260 million notes in Ksh. 200 notes, 170 million notes in Ksh. 500and 460 million notes printed in Ksh. 1,000 denominations printed.
Also Read: MPs Summon CBK Boss Over Secret Bank Note Printing Contract
De La Rue Company Dropped
The MPs further sought to know what the fate of De La Rue company was, and the 40 per cent stake owned by the National Treasury in the firm locally.
Thugge noted that the printer which established base in Kenya in October 1992, had made a decision to exit the country by themselves.
He told the lawmakers that there was a remote chance that G+D would wish to use the De La Rue facility.
Noting that Kenya had made great progress in the fintech sector, the MPs inquired if CBK would consider introducing an e-currency or even digital currency given that the contracted Germany firm, G+D has the capacity to generate digital currency.
Also Read: CBK Invites Kenyans to Invest in Ksh15 Billion Treasury Bonds
Dr. Thugge however noted that given the digitization progress on M-Pesa, the Bank did not view this as a priority.
He cited the failed attempt by Nigeria to introduce an e-currency as one of the reasons why the plan would not work.
CBK Makes Changes to Bank Notes
Changes made on the banknote include new Signatures for the Governor and Member, Year of Print Specified as 2024 and Security Thread.
The banknotes will now bear the signature of the Governor of the Central Bank of Kenya, Dr. Kamau Thugge and that of the Principal Secretary, National Treasury, Dr. Chris Kiptoo.
Besides, the year of print will now be 2024. The notes will also have a new security thread with colour changing effects that are specific to each denomination.
The Governor explained that the new changes are in line with the traditions of the CBK adding that they had sought the advisory of the Attorney General.
He also clarified that the old currency would continue to be legal tender adding that the move to print new currency did not occasion any form of demonetization.
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