Currencies

CBK mum on timeline for introduction of new-look currency

CBK Governor Patrick Njoroge. FILE PHOTO | NMG
CBK Governor Patrick Njoroge. FILE PHOTO | NMG 

The Central Bank of Kenya (CBK) Thursday remained mum on details of the planned introduction of a new-look currency.

This came as debate raged among Kenyans on how the new currency, including notes and coins, will look like.

The production of new currency notes that do not bear the images of former presidents was supposed to start after passage of the 2010 Constitution.
It is estimated the replacement will cost Sh18 billion.

Central Bank of Kenya (CBK) Governor Patrick Njoroge had told the Senate last year that there are risks issuing the new currency in an election year, due to security concerns, adding then that the regulator saw September 2017 (this month) as the preferred time to roll it out.

It appears Kenyans will have to wait a bit more before the new notes and coins are actually in circulation.

Kenya must replace all currency with completely new bank notes because the Constitution adopted in 2010 prohibits the use of a person’s portrait on the legal tender.

Texture details

CBK is also committed to making the new bills more accessible for the visually impaired, meaning that they may have to develop new texture details.

On Tuesday, Dr Njoroge told a media briefing: “We are in the business of having the new generation currency that is consistent with the Constitution and we will do this in accordance with the Central Bank Act and to all other laws that govern that whole process.”

The Cabinet had approved the design of new generation currency in August 2013, and was working on a production date of 2015, prompting a botched international tender.

The tender was cancelled after the bidders quoted a zero price. The CBK, in consultation with the Attorney-General, ruled the move illegal.

Notes currently in circulation have the images of first President Jomo Kenyatta and his successor Daniel arap Moi.

“We have revised the timelines based on where we are today. The 17 months required for the tendering, award of contract and printing of the new currency adds up to September 2017,” said Dr Njoroge last year.

The CBK governor had then said Sh18 billion would be required to withdraw the currency now in circulation over a three-year period. This will be backed by an awareness campaign.

Tendering woes

The business of printing currencies has been hit by tendering woes before.
The CBK has never floated a successful competitive international tender since it was established in 1966.

In June 2014, CBK sought a short list of currency printers through a tender that was to see United Kingdom-based firm De La Rue lose its exclusive cash printing rights. It failed because of the zero bids.

De La Rue has had a stranglehold on the business except for the period between 1966 and 1985 when the country’s bank notes were printed by a UK company known as Bradbury Wilkinson, which was later acquired by De La Rue.

Towards the end of 2002, when all indications were that the regime of President Moi was about to leave the scene, CBK moved quickly and signed a 10-year exclusive deal with De La Rue in the eleventh hour.

On March 14, 2003, Finance minister David Mwiraria cancelled the 10-year exclusive currency printing contract and ordered an international tender.

When the Central Bank floated the tender in 2006, De La Rue won a three-year contract to print 1.7 billion pieces at a cost of $51 million (Sh5.1 billion).

The bank notes procured through the competitive process did not see the light of day after the Kibaki administration decided to take the route of buying shares in De La Rue’s Ruaraka-based subsidiary.

To date — and even after the new Constitution demanded new designs — De La Rue continues to exclusively print currency under opaquely-negotiated interim orders.