The Auditor-General Nancy Gathungu has flagged the Central Bank of Kenya (CBK) for irregularities in awarding a Ksh 14.5 billion contract to the German firm Giesecke+Devrient Currency Technologies GmbH (G+D) for printing new Kenyan currency notes.
The report points out that the CBK violated procurement laws by failing to establish a special committee as required under the Public Procurement and Asset Disposal Regulations of 2020.
This committee is necessary for the procurement of classified items, such as currency printing, to ensure proper oversight and transparency.
CBK Governor Kamau Thugge defended the decision, stating that the procurement was authorized by the National Security Council and the Cabinet due to concerns over a potential shortage of banknotes, particularly the Ksh 1,000 note.
He further explained that the exit of De La Rue, the British firm previously responsible for currency printing in Kenya, exacerbated the urgency of the situation.
De La Rue ceased its operations in Nairobi after its contract expired in 2023, leading to job losses and the liquidation of Kenya’s 40% stake in the local subsidiary of De La Rue.
This closure raised concerns about the country’s ability to print its currency domestically.Despite the CBK’s justification for treating the contract as classified, lawmakers and the Auditor-General have raised serious questions.
These include the absence of an open tender process and concerns over insider dealings or potential collusion.
The Auditor-General’s report highlighted that CBK did not fully comply with Section 9 of the Public Procurement and Asset Disposal Act, which mandates oversight by the Public Procurement Regulatory Authority.
This has fueled calls for an investigation into the tendering process to ensure value for money and transparency.
The deal involves printing 2.04 billion notes over five years, including various denominations from Ksh 50 to Ksh 1,000. G+D has already delivered part of the notes, with the Ksh 1,000 note being the first to enter circulation.
However, the costs associated with the new contract have raised eyebrows, as the contract appears more expensive than previous deals with De La Rue, even though it covers fewer notes.
Questions about the future of currency printing in Kenya are gaining traction, with some lawmakers suggesting a revival of local printing capabilities. Others have proposed investigating why De La Rue was not retained or if its exit was a deliberate move to pave the way for the German firm.
This situation raises broader concerns about governance, transparency, and the management of critical national assets in Kenya, especially in sectors that impact the economy and national security.
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