Chiamaka Ihekwoaba

Chiamaka Ihekwoaba

Cost of printing Kenya’s new currency increases to Sh15bn

Kenya’s delays in switching to new banknotes have increased the cost of printing by half the price to SH15 billion, which is an additional SH5 billion from the initial cost of the tender.

Central Bank of Kenya on Monday, 12 November, stated that the provision of the new generation currency will cost Sh15 billion from an initial SH10 billion, thanks to the court delays and the introduction of a new coat of varnish to reduce wear and tear and prolong the currencies circulation life.

In January, a High Court nullified a Sh10 billion-a-year tender for the printing of the new-look currency awarded to British security printing firm, De La Rue International. However, last month, the High Courts decision was overruled by the Court of Appeal and De La Rue International retained the tender to design and print the new Kenyan currency.

De La Rue has always been in charge of printing Kenya’s new notes until the contract was awarded to UK firm, Bradbury Wilkinson, who printed the notes only between 1966 and 1985. Last year, De La Rue beat three other European banknote printing firms, Germany’s Giesecke & Devrient, Sweden’s Crane Currency and a French firm, Oberthur Fiduciaire to a successful bid for the currency contract.

Unhappy with the outcome, Crane AB moved to court and accused the Central Bank of giving De La Rue a 15 percent margin preference for having local shareholding.

De La Rue’s decision to coat the new notes is to avoid quick defacing of the bank notes caused by mis-handling of the notes. To reduce the wear and tear of the bank notes, the Central Bank of Kenya issued regulations that provide a jail term of up to three years or a fine of Sh500,000 for those who mishandle notes and coins.

The printing tender has been seen as an acid test for the banking regulator, which has never successfully floated a competitive international currency printing bid since it was established in 1966.