The introduction of the new currency should help greatly in the fight against corruption. There are numerous instances where people have been found with large sums of money suspected to be illegally acquired. The discovery of huge amounts of high denomination notes stashed in people’s houses by law enforcement agencies, demonstrates that there is substantial amount of money looted from public coffers. This point was driven home by Central Bank Governor Patrick Njoroge yesterday; that there is a lot of illicit money in circulation. While unveiling the new currency yesterday, the governor said all the old Sh1, 000 series shall be withdrawn. To this effect, a Gazette Notice dated May 31, has been issued, advising that Kenyans have until October 1 to exchange the notes, after which they will cease to be legal tender.
The banknotes, which embody the Big Five and are appropriately colour-coded, have a unique theme to denote the richness of our people and nature of Kenya. The Sh50 note has green energy, Sh100 note has agriculture, Sh200 note depicts social services, Sh500 note is promoting tourism, while the Sh1, 000 note symbolises governance. After rolling out the new notes, Central Bank should quickly conduct civic education to ensure that the new notes are easily recognisable by all Kenyans. According to official data, about Sh210 billion worth of Sh1, 000 notes was in circulation last year. A lot of this money could be lying idle somewhere as people hide their illegal wealth.
This justifies Central Bank’s move to withdraw the high-denomination currency because our big currency banknotes are being used for illicit financial flows in Kenya and other countries in the region. More recently, we have seen the emergence of counterfeits. There have been reports of people suspected of corrupt deals trying to inject their ill-gotten money into circulation by carrying out big transactions in cash.
This, we hope, will be cured by the new currency. All financial institutions should now strictly adhere to Central Bank regulations, which demand that huge cash transactions are duly noted and relevant authorities notified so that corrupt individuals and corporates who might be tempted to try to clean the cash through bank deposits are nabbed. Forex bureaus too should be on guard to make sure that those holding huge cash do not try to buy foreign currency in a bid to hide their illicit money. Although some reservations have already been expressed in some quarters over the suitability of using images which have a portrait of a person in the notes, we hope this will not be used as an excuse to delay the roll out of the currency.
When Kenya promulgated the new Constitution in 2010, the expectation of many was that a new currency prescribed by the supreme law would be introduced soon. This was however not the case as the process has been dogged by controversy over who ought to print the currency and how they should be picked.
Since the new generation coins were unveilled last December, Kenyans have been waiting anxiously for the currency notes and now that they have been unveilled, it is our prayer that they will cure some of the ills which came with the old notes. It is important to note that that the new currency has more features, which make them more recognisable and user-friendly, even to the visually impaired. We also hope that they will make it difficult for counterfeiters to copy.
But even as we celebrate this new currency, Kenyans hope that due care was taken so that the country is not plunged into chaos which gripped India in 2016, when the country gave the people just days to exchange their old notes for new ones.
In India, ATMs had to close down and be refitted so that they could accommodate the new currency notes which were of different size. This created unnecessary tension and had a negative effect on the market. We hope Kenyans, who have several months till the changeover, will not be caught in similar quagmire.