He further noted that under the five-year contract, Kenya will receive 2.04 billion banknotes to replace those that are torn, worn out, or destroyed.
Central Bank of Kenya (CBK) Governor Kamau Thugge has explained why a German money printing firm was chosen over British printer De La Rue in the printing operations of the new banknotes unveiled on August 7, while at the same time ending speculation regarding the identity of the firm.
During a post-Monetary Police Committee (PMC) meeting address on August 7, Thugge stated the firm was carefully selected and was believed to be “one of the best firms”.
De La Rue – in which the government owns a 40 percent stake — had closed down its Kenya operations in the financial year that ended March 2023 due to a lack of new orders. At the time, the firm spent £15.1 million (Ksh2.48 billion) to lay off over 300 workers, pay lawyers, and write off its assets.
It was the action that forced CBK to source a new currency printer after De La Rue’s exit, thus leading to a deal struck with the German firm, Giesecke+Devrient Currency Technologies (G+D).
A photo of De La Rue Currency and Security Print Ltd factory along Thika road. /FILE
“The (Ruaraka) plant was owned by De La Rue, with the government of Kenya, through the National Treasury, acquiring a 40 percent stake in De La Rue Kenya EPZ Limited, in 2017. This company printed the 2019 series of Kenyan banknotes until January 2023,” he told the National Assembly’s Finance and National Planning Committee on Wednesday, August 21.
“Around mid-2023, CBK determined that the country was at risk of a stock out of currency bank notes. A stock out of the Ksh1,000 notes was looming,” the Governor explained the reason for updating the current banknotes.
According to Thugge, G+D was picked through a classified procurement process amid risks of a stock out of bank notes which would have had grave economic and security implications for the country.
The deal between G+D and the Kenyan government to print the new notes was revealed to be Ksh14.2 billion which will facilitate the printing of new notes to replace old ones.
“The classified procurement process was therefore necessary to avert a stock-out crisis. The procurement was conducted in accordance with the Public Procurement and Disposal Act, and with the approval of the National Security Council and the Cabinet,” Dr Thugge added to MPs.
“The cost of the banknotes was $109,422,740 using the exchange rate at the date of the contract signing. The contract for 2019 series banknotes was worth $112,856,000,” he added.
Dr Thugge told the committee chaired by Molo MP Kuria Kimani that the contract with the German currency printer was reviewed and approved by Cabinet through the National Treasury and the Attorney-General as required by law.
He added that due to its national security implications, CBK’s request was initially considered by the National Security Council before its tabling before the full Cabinet. After that, the National Security Council and the Cabinet approved the classified procurement as requested.
He further noted that under the five-year contract, Kenya will receive 2.04 billion banknotes to replace those that are torn, worn out, or destroyed.
The changes affect the denominations that include fifty shillings (Ksh50), one hundred shillings (Ksh100), two hundred shillings (Ksh200), five hundred shillings (Ksh500) and one thousand shillings (Ksh1,000) currency banknotes
Kenyans can expect changes in their banknotes, including Dr. Thugge’s signatures and that of the Principal Secretary of the National Treasury, Dr. Chris Kiptoo.
Other changes include the year of print – 2024, and new security threads with colour-changing effects that are specific to each denomination. The rest of the features remain the same as those of the series issued in 2019.
A person holding Kenyan banknotes. /FILE