PS reveals pressure to sway money printing deal in Kenya
Posted Sunday, April 15 2012 at 18:27
Former acting Central Bank governor Jacinta Mwatela was blocked from printing new currency notes after interest groups exerted pressure for the cancellation of an existing contract with De La Rue.
Mrs Mwatela was barred from ordering the printing of new currency in view of a stock out on the grounds that her signature had not been authorised to appear on the notes.
She had been allowed by the Treasury and a Cabinet sub-committee to set in motion plans for the procurement, pending the authorisation.
“There was a lot of pressure on the Central Bank and even Treasury. I remember somebody calling me to say, Mr PS, are you aware of this contract for printing money?
I told him the right place for an inquiry would be the Central Bank,” Mr Kinyua told the Public Accounts Committee (PAC).
The authorisation — usually given by the President — did not come through and instead Prof Njuguna Ndung’u was appointed governor.
It was only then and after the director of currency, Lukas Ogolla, was replaced with a Mr Chege, PAC chairman Boni Khalwale said, that new bank notes started being printed.
“You withheld the signature to flag off the process of procurement and Mwatela could not proceed. Even after numerous reminders from CBK to you and the minister, you refused to reply thereby occasioning a stock out of currency until the Director of Currency, Mr Lukas Ogolla, was removed and replaced by a Mr Chege,” said Dr Khalwale.
His assertions appear to have been informed by testimony from Mrs Mwatela who requested the committee to hold its session in camera on Thursday. She had said her life would be in danger if she testified publicly on the De La Rue currency printing tender.
The committee alleged that key officials in government were lobbying to have the money printing tender awarded to a French firm instead of De La Rue.
“We have information that Mrs Mwatela was allegedly pressurised by former State House advisor, Stanley Murage, who questioned why the contract was awarded to De La Rue,” Dr Khalwale said.
The jostling only stopped after a meeting between the Central Bank, the Treasury and President Kibaki where the Head of State ordered that the contract be given to the winning bidder. Mr Kinyua admitted the meeting took place, but said the contract was held up for other reasons.
“In 2006, CBK was told to hold on because the bank made a presentation to the President to print new currency with new security features. They wanted new redesigned notes,” he said.
The committee said two weeks ago that the cancellation of the contracts and recourse to piecemeal arrangements with De La Rue for replacement of defaced notes has so far cost taxpayers more than Sh2.7 billion.