CBK Talks About Alarming Trend Of The KSh 1,000 Bank Note In Kenya, How It Averted Crisis

• CBK said it averted a national security threat by addressing a potential shortage of KSh 1,000 banknotes that started presenting itself in mid-2023
• Following De La Rue's Nairobi plant closure, CBK signed a KSh 14 billion contract with a German company for new banknotes; DLR had been printing banknotes for Kenya since 1966
• CBK governor Kamau Thugee said the new banknotes will feature enhanced security measures, including signatures of top officials and colour-changing threads

Muyela Roberto is a business journalist at TUKO.co.ke with over 9 years of experience in the digital media, offering deep insights into Kenyan and global economic trends.

The Central Bank of Kenya (CBK) has disclosed how it averted a potential national security crisis due to a declining volume of KSh 1,000 banknotes in circulation.

CBK initiates sourcing of currency printer

While appearing before Parliament, CBK Governor Kamau Thugge revealed that the regulator identified a looming shortage of the critical denomination around mid-2023.

Thugge explained that, in addition to the KSh 1,000 banknotes, other denominations were also running low, prompting the CBK to initiate the process of sourcing and contracting a new printer.

“A stockout poses significant economic and national security risks. The imminent shortage of the KSh 1,000 notes could have had severe economic and security implications for the country. This necessitated urgent currency procurement,” Thugge said.

Following the shutdown of De La Rue’s Nairobi plant in January 2023, after fulfilling its contract to deliver the 2019-series banknotes, the CBK embarked on the process of procuring a new printer to prevent the shortage.

Since 1966, Kenya's banknotes had been sourced from De La Rue International (DLR) or its predecessors, Thomas De La Rue & Company Limited (TDR) and Bradbury & Wilkinson, which was acquired by TDR in 1986.

De La Rue had established a factory in Ruaraka that exclusively printed Kenyan banknotes. The government, through the National Treasury, held a 40% stake in De La Rue Kenya EPZ Limited. The company printed the 2019 series of Kenyan banknotes until January 2023.

Faced with the risk of a banknote shortage, the CBK sought classified procurement approval from the National Treasury.

Giesecke+Devrient Currency Technologies GmbH (G+D)

While previous contracts had been awarded through direct procurement, the 2019-series banknotes were subject to competitive bidding.

“CBK gathered relevant data from publicly available sources and confidential channels. Through this process, Giesecke+Devrient Currency Technologies GmbH (G+D), a reputable German banknote printing company, was identified,” Thugge noted.

According to Thugge, the contract with the German firm has been signed and will cost the country KSh 14 billion.

Features of new banknotes

The CBK announced that the new banknotes, including the KSh 50, KSh 100, KSh 200, and KSh 500 denominations, will incorporate enhanced security features, such as:

• The signature of CBK Governor Kamau Thugge.
• The signature of Principal Secretary, National Treasury, Chris Kiptoo.
• The year of print, 2024.
• New security threads with colour-changing effects specific to each denomination.

Proofreading by Mercy Nyambura Guthua, journalist and copy editor at TUKO.co.ke