Why MPs are worried over CBK's 'secret' currency printing contract with German firm

Members of Parliament have cast significant doubt on the decision of the Central Bank of Kenya (CBK) to enter into a contract with a German money printing firm.

The National Assembly's Finance and National Planning Committee expects the CBK governor to furnish them with details on the name of the German firm, how the tender was awarded, and how much the deal will cost the taxpayers to print the new currency.

Chaired by Molo MP Kuria Kimani, the committee has launched a thorough investigation following CBK's disclosure that it contracted the German firm to print the country's new banknotes.

"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," Kimani said ahead of Thugge appearing before the parliamentary committee next Tuesday.

"I ask you members to be present on that day. I know we will be in recess, but we need to know the details of this currency printing deal."

While announcing the decision to engage the German firm last week, Thugge explained that the move was prompted by the exit of the local subsidiary of British printer De La Rue. The subsidiary, in which De La Rue holds a 40 per cent stake, shut down due to a lack of new business opportunities.

The Central Bank of Kenya. (Photo: File)

Despite his announcement, Thugge failed to issue details of the name of the company, how the tender was conducted, or how much would be spent on the deal.

He also failed to further explain if the new company was contracted through competitive or direct procurement.

Germany has two prominent currency printers, Bundesdruckerei GmbH and Giesecke+Devrient GmbH, and it is not clear whether either of these companies was 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.

Nonetheless, the CBK boss, who addressed the media last week after a Monetary Policy Committee meeting, assured Kenyans 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.

Kenya's new banknotes will be signed by 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.