Francis Atwoli, the Secretary General of the Central Organization of Trade Unions (Kenya), COTU (K), has condemned the proposed Forex Hoarding Bill, 2023.
In a statement on Thursday October 5, Atwoli expressed his reservations against the legislative proposal, spearheaded by Rongo Member of Parliament Paul Abour.
The Bill seeks to criminalize the hoarding of United States dollars in a bid to address the persistent depreciation of the Kenyan shilling against the American currency.
Atwoli contends that the Forex Hoarding Bill, 2023, if enacted into law, would constitute a grave setback for Kenya.
“This bill, which seeks to imprison or fine individuals for ‘hoarding’ foreign currency beyond 45 days, is a retrogressive, repressive, and archaic piece of legislation that runs counter to the principles of economic progress and investor-friendly policies,” the statement read in part.
The Forex Hoarding Criminalization Act 2023 proposes strict controls on the purchase and holding of U.S. dollars by Kenyan citizens.
Also Read: Uproar After Ichung’wa Mocks Azimio Advisor
The Bill’s Proposal
The Bill proposes that the National Treasury will be tasked with setting regulations specifying the acceptable quantity of dollars one can purchase and the duration they can retain the funds before being deemed hoarders and subject to legal penalties.
Legislator Paul Abour, the bill’s proponent, argues that the legislation is necessary to prevent wealthy Kenyans from speculatively stockpiling U.S. currency, a practice he claims has escalated since the 2022 General Elections.
He argues, “We can’t afford the luxury of people buying dollars and keeping them in their houses for speculation purposes.”
Abour added that the Central Bank of Kenya statistics reportedly show that local lenders hold approximately Ksh.1.2 trillion in dollars.
COTU’s Stance
However, the Atwoli-led COTU has taken a starkly different stance. The organization noted that Kenya has moved beyond the era when individuals were required to declare their currencies when traveling in and out of the country.
Further, the trade union argues that the proposed bill harks back to colonial-era practices that suppressed individual freedoms and discouraged investment.
“Kenya has made significant strides in its economic development and international trade relations have taking in mind that we have witnessed the rise of numerous multi-millionaires and start-ups striving to become unicorns,” added COTU.
Moreover, the union argued that in this dynamic and competitive environment, it is imperative that the legislative framework fosters an environment conducive to investment and economic growth.
The Kenyan banking system currently allows workers and investors to hold multi-currency accounts accommodating global trading currencies such as dollars, euros, and pounds.
COTU (K) maintains that punitive measures like those proposed in the Forex Hoarding Bill, 2023, are detrimental to investor confidence, discouraging participation in international trade and currency exchange.
It went on to encourage the parliament to come up with new legislations stating, “COTU (K) would like to encourage the Parliament of Kenya to come up with legislations that encourages the free and unconditional flow of capital as long as individuals can account for the capital and that the same is not out of money laundering.”
The organization advocates for progressive economic policies that encourage investment, create jobs, and promote prosperity for all Kenyan citizens.
Also Read: Fighting in Meru is a Hobby-Moses Kuria
If the Bill is assented into law, it proposes a 90-day amnesty to allow those with the dollars in their accounts or homes to convert the money into Kenya shillings lest they attract a 15% tax of the amount being held.
COTU on the other hand hopes and trusts that the Parliament will reject this bill in its entirety, emphasizing the importance of preserving an environment conducive to economic growth, job creation, and prosperity for all Kenyan citizens.
