MPs Launch Probe Into CBK’s Secret New Banknotes Printing Deal With A German Firm

Parliament has summoned Central Bank of Kenya Governor Kamau Thugge to provide details about a contract signed with an undisclosed German firm to print the country’s new banknotes.

The awarding of the tender to the German company was announced yesterday by the CBK governor, but details regarding the firm’s name, the tendering process, and the cost of the deal remain undisclosed.

This development follows Kenya’s decision to shut down De La Rue, the local British printing subsidiary, due to a lack of new printing orders. Kenya purchased a 40 per cent stake in the company for £5 million (Sh. 820.5 million) in 2019.

De La Rue ceased its currency printing operations in the financial year ending March 2023 and spent £15.1 million (Sh2.48 billion) to lay off more than 300 workers, pay lawyers, and write off its assets.

The company stated that its exit was due to confirmation from the CBK that there was “no expectation of new banknote orders” for at least 12 months. Former CBK governor Patrick Njoroge mentioned in February last year that the country’s currency needs were “completely fulfilled.”

Dr. Thugge, the new CBK governor, justified the decision to introduce new notes for all denominations as an essential step to address potential stockouts.

“The notes we have are getting old, and therefore we need to get new notes. The reason we started with the Sh1,000 notes is that we project a potential stockout of those notes in July or August, so it was necessary to acquire new notes as quickly as possible,” he said.

The National Assembly’s Finance and National Planning Committee seeks clarity from the CBK governor on several issues, including the name of the German firm, how the tender was awarded, and the cost to taxpayers for printing the new currency.

“We will be meeting Central Bank of Kenya Governor Kamau Thugge over reports that a firm has been identified to print new banknotes,” said committee chair, Molo MP Kuria Kimani, regarding the directive for Dr. Thugge to appear before the Parliamentary committee next Tuesday.

“I urge members to attend the meeting. Although we will be in recess, it is crucial to understand the details of this currency printing deal,” Kimani added. The committee has initiated a probe following the CBK’s hiring of the German firm.

When questioned by the media about the deal with the undisclosed German firm, CBK Governor Thugge stated that the printing was being conducted by “one of the best firms” in Germany.

The new notes will feature the signatures of Dr. Thugge and Treasury PS Chris Kiptoo. They will be dated 2024 and include new security threads with colour-changing effects specific to each denomination. CBK noted that the rest of the features will remain the same as those of the 2019 series.