By Jackson Okoth

Kenya: The Government’s plan to launch new currency notes and coins this week has attracted criticism, with questions being raised on whether firms had been invited to bid for the job.

There are also fears that the country could incur huge costs if it is forced to repeat the exercise to meet East African Community common currency provisions.

The Constitution requires new notes be in circulation by February 2015, while the EAC is expected to have set up a monetary union within the same year.

International tender

“Given the controversy surrounding the deal between the Government and UK-based De La Rue, it is prudent for the State to float an international tender and open up the process to the public,” said Dr Nzioka Kibua, a former CBK boss.

Further, the disclosure that Cabinet had approved a move to print new currency came from Head Of Public Service Francis Kimemia and not bureaucrats at the Central Bank of Kenya, which has maintained a studious silence.

There are concerns that public procurement rules may not have been followed, leaving the process vulnerable to shadowy deals and briefcase operators.

“The Cabinet should not be the only organ that discusses this matter. The entire process, right from the design to the tendering, and even the printing costs for this new cash, should be open and transparent,” said Kariithi Murimi, a risk consultant.

One way of opening up the process to public participation is allowing the discussions to move from the Cabinet to the summit where governors and the President can participate, while allowing consultations at the county level.

Article 231(4) of the Constitution states that all notes and coins shall bear only images that depict Kenya. These images exclude portraits of any individual.

“Once all the features have been approved and the printing complete, it will be upon the Central Bank to issue timelines on when the old notes will be withdrawn from circulation as new ones come into circulation,” said Habil Olaka, the Kenya Bankers Association chief executive.

Security features

The new notes are expected to have enhanced security features and specific national symbols.

It is still unclear what will happen when the Sh10 coin is removed from circulation and replaced with a Sh10 note.

“We are yet to change the public behaviour on the usage of coins and stop them from the habit of storing coins at home, in the car or in the office drawer,” said Olaka.

Phasing out the old notes and printing new ones is expected to cost the economy billions of shillings, to be spread over 2014 and 2015. Available figures put the average cost of printing Kenyan bank notes at Sh3,721 per 1,000 pieces. Some 390 million bank notes are printed per year.

“It is still unclear whether printing of the new notes will be done through open tendering or single sourcing,” said Murimi.

Apart from a disclosure that the Cabinet had approved the features on the new notes, little more has filtered out on the matter.