Central Bank of Kenya (CBK) Governor Kamau Thugge has been summoned to Parliament to provide details of a contract signed with an undisclosed German firm to print the country’s new bank notes.
The National Assembly’s Finance and National Planning Committee wants the CBK chief to shed light on the name of the German firm, how the tender was awarded and how much the deal will cost the taxpayer to print the new currency.
The committee, chaired by Molo MP Kuria Kimani, has launched an investigation after the CBK revealed that a German firm had been hired to print new notes.
“We will be meeting the Central Bank of Kenya Governor, Kamau Thugge, over reports that a firm has been identified to print new bank notes,” Mr Kimani said of a directive to Dr Thugge to appear before it the parliamentary committee next Tuesday.
“I ask you members to be present on that day. I know we will be on recess, but we need to know the details of this currency printing deal.”
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Dr Thugge revealed last week that Kenya had engaged the services of a German firm to print new notes, months after allowing the local subsidiary of British printer De La Rue – in which it owns a 40 percent stake – to shut down for lack of new business.
However, he gave no details of the name of the company, how the tender was conducted or how much will be spent on the deal.
The government did not explain whether the new printer was contracted through competitive or direct procurement.
Dr Thugge revealed the new printer while answering questions from the media after the Monetary Policy Committee meeting.
The Governor told the media that the printing would be done by “one of the best firms” in Germany.
“The notes we have are getting old and therefore we need to get new notes. The reason why we started with Sh1,000 notes is that we are projecting there could be a stockout of those notes in July or August and so it was really necessary that we get new notes as quickly as possible,” he said.
The banknotes will be signed by Dr Thugge and Treasury Principal Secretary Chris Kiptoo. They will have a printing year of 2024 and new security threads with colour-changing effects specific to each denomination. CBK said the rest of the features will be the same as those of the 2019 series.
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The new German printer is taking over the multi-billion shilling currency printing contract after De La Rue Kenya EPZ Limited, a banknote printer in which Kenya bought a 40 percent stake for £5 million (Sh820.5 million) in 2019, closed its Nairobi plant and ceased operations 19 months ago.
Germany has two prominent currency printers — Bundesdruckerei GmbH and Giesecke+Devrient GmbH — and it is not clear whether either is the company that has been awarded the contract to print banknotes for Kenya.
Giesecke+Devrient is one of the firms that lost out to De La Rue in 2018, when it bid to print Kenya’s new generation of banknotes.
De La Rue ended its currency printing operations in Kenya in the financial year ending March 2023, spending £15.1 million (Sh2.48 billion) to lay off more than 300 workers, pay lawyers and write off its assets.
De La Rue’s exit marks an abrupt change in fortunes for a company that in late 2018 won an £85 million (Sh13.9 billion) three-year tender to design and produce Kenya’s new generation of currency notes.
CBK disclosures show that the cost of producing the currency, which includes ordering, printing, minting, freight, insurance and handling costs, amounted to Sh12.51 billion over the past five years to June 2023.
The Treasury’s dividends from the joint venture were £0.8 million (Sh131.2 million) in 2020, £1.2 million (Sh196.9 million) in 2021 and £0.9 million (Sh147.7 million) in 2022, before winding up costs resulted in a loss of £2.9 million (Sh475.8 million) last year.
