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A parliamentary committee is investigating how the Central Bank of Kenya awarded a supplementary contract worth Sh14.2 billion to a German company.
Yesterday, there was news that CBK Billions of shillings were signed A five-year contract for printing banknotes was signed with Giesecke + Devrient Currency Technologies.
Central Bank of Kenya Governor Kamau Thugge said yesterday during a meeting of the National Assembly’s Finance and National Planning Committee that the government took the step following De La Rue’s exit.
Mr. Thugge disclosed that under the new contract, the foreign company will print and replenish 460 million 1,000 shilling notes and 170 million 500 shilling notes. For 200 shilling notes, 260 million are expected to be supplied, and for 100 shilling notes, 690 million are expected to be supplied. The company is also expected to deliver 460 million 50 shilling notes during the contract period.
The committee, led by Moro MP Kimani Kuria heard that the company The replenishment of some 1,000 shilling notes has been completed, and more versions will be introduced in the coming months.
“After the exit of De La Rue, the country faces the risk of a shortage of banknotes, which will have serious implications for the economy and national security… We know that the country needs this process of restocking, which is why we went through all the legal procedures in the tender process,” Thugge said.
He added: “I also want to clarify that the company is not printing new currency, but replenishing the existing old currency.”
The company was contracted exclusively by CBK, rather than through an open tender system. “Who really owns this company? How did we choose it? How many other jobs have they done? What was the real reason for contracting it?” asked Eldas MP Adan Keynan.
He added: “We need you to provide the council with documentation relating to the new contract, including the rationale for the closure of De La Rue.”
Councillors further wondered whether it was value for money and questioned the sudden withdrawal of De La Rue, who signed on in 2019.
“When you pick a company, how do you determine the cost of the contract? Also, when these notes are printed, will the existing notes still be legal tender?” asked committee chairman Kimani.
He also asked the governor and his team to explain why the current contract to produce 2.04 billion notes costs Kenyans 14.2 billion shillings, while the contract signed with De La Rue in 2019 cost Kenyans $3 million to produce 2.35 billion notes of various denominations.
“The committee needs to understand the scope of work of these companies. Why is this contract $3 million cheaper than the contract we signed with De la Rue in 2019? This shows that there was indeed serious fraud in our previous contract and it should be investigated,” Kimani said.
Baringo MP Joseph Makilap questioned Exact number of notes These facilities are badly worn out and the central bank needs Sh14.2 billion to replenish them.
Tager said the contract was approved by top security and constitutional bodies, including the National Security Council and the Attorney General’s Office.
“We will provide the documents. We have nothing to hide. We applied for the confidential procurement process through the Ministry of Finance, then submitted it to the National Security Council and later to the Cabinet, which analysed it and issued a directive to the Ministry of Finance for us (CBK) to go ahead with the procurement,” he said.
He said the value of banknotes currently in circulation was Sh330 billion. Central Bank of Kenya director of currency operations Paul Wanyage explained that the accelerated wear of banknotes was because Kenyans treated them roughly. “No matter what we do to increase the value of our currency, Kenyans treat banknotes roughly, which means they don’t last long,” Mr Wanyage said.
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