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CS Fred Matiang'i: Why there is a shortage of Sh100 and Sh200 notes

Banks have a shortage of Sh200 notes. [iStockphoto]

The Cabinet Secretary for the Ministry of Interior Dr Fred Matiang’i has claimed that banks have a shortage of Sh200 notes as politicians withdrew the cash to bribe voters.

Speaking during the launch of the report of the National Risk Assessment on Money laundering and Terrorism Financing taskforce, Matiang’i noted that most of this money is dirty money that is simply being laundered.

"The bankers in the room, I understand now you have a shortage of Sh200 in your banks...and sh100," said Matiang’i during the event that was held at Serena Hotel, Nairobi.

He added: "Because politicians are bribing villagers. People are not working, they are standing on the roadside to get Sh200 and so on from this money laundering."

Matiang’i noted that after elections, 40 people that will be elected are active players in money laundering and trafficking.

The CS noted that there was a political will to deal with the problem of money laundering.

The Taskforce was appointed to coordinate and conduct the National Money laundering and Terrorism Financing Risk Assessment exercise whose objective was to identify and assess the level and trends of Money laundering Terrorism Financing and Proliferation Financing in the Country.

It is not clear whether there has been a shortage of the Sh200 notes.

However, data from the Central Bank of Kenya shows that there was an increase of Sh18.5 billion of cash outside of banks in the first four months of this year compared to an increase of Sh6.6 billion in the same period last year.

Much of the increase, analysts say, has been due to the electioneering with politicians getting money to bribe voters.

"They are laundering themselves into these elective institutions," said Matiang’i.

The Money Laundering and Terrorism Financing National Risk Assessment Report (NRA) assessed the banking sector as having the highest impact on Kenya’s ML/TF risk profile due to the pivotal role it plays in facilitating payments, trade and investments in Kenya and the region.