National Assembly Probes Ksh.14.2 Billion Contract for Currency Printing

The Finance Committee of the National Assembly, chaired by Molo MP Kuria Kimani, has launched an inquiry into the circumstances under which the national government secured a restricted tender valued at Ksh.14.2 billion. This contract, awarded to Giesecke+Devrient Currency Technologies, covers the printing and replenishment of Kenyan banknotes over the next five years.

The Committee questioned Central Bank of Kenya (CBK) Governor Kamau Thugge on the financial prudence of this contract. In his defense, Thugge emphasized the urgency and critical nature of the task, which necessitated swift action.

The contract with Giesecke+Devrient involves printing 2.04 billion currency notes, including 460 million Sh50 notes, 690 million Sh100 notes, 260 million Sh200 notes, 170 million Sh500 notes, and 460 million Sh1,000 notes. These new notes, intended to replace the old 2019 series, will have a total value of Sh689 billion.

Thugge justified the use of a classified procurement process, citing the pressing need to replenish banknote stocks after the previous supplier, De La Rue, ceased operations in January 2023. The CBK identified a potential shortage of Sh1,000 notes by mid-2023, prompting the need for swift procurement. Thugge further explained that the National Security Advisory Council (NSAC) and the Cabinet had approved the procurement, deeming it essential to maintain price stability and support the exchange rate.

Committee members expressed concerns about the decision to bypass an open tender process and raised questions about the potential impact on Kenya’s interests in De La Rue. MPs also sought clarification on the selection process for the German firm, Giesecke+Devrient, and how the cost compares to the previous contract with De La Rue.

In response, Thugge clarified that De La Rue's withdrawal was a decision made by the company and was not influenced by the government. He assured the committee that the procurement process was conducted transparently and in accordance with legal requirements, with input from all relevant stakeholders, including the Treasury, NSAC, and the Cabinet