Kenya Signs Sh14.2 Billion Deal with Giesecke+Devrient for New Banknotes
Kenya has secured a Sh14.2 billion ($109,422,740) agreement with Germany’s Giesecke+Devrient Currency Technologies (G+D) for the production of new banknotes over the next five years. This contract aims to replace outdated notes and prevent potential shortages, as announced by the Central Bank.
Central Bank of Kenya (CBK) Governor Kamau Thugge disclosed to the National Assembly’s Finance and National Planning Committee that G+D will be taking over from Britain’s De La Rue, putting an end to the speculation about the new contract’s winner.
Thugge explained that the German company was chosen through a confidential procurement process to mitigate risks of a currency shortage that could have had severe economic and security consequences.
The confidential procurement process was crucial to avoid a crisis of note shortages. The process adhered to the Public Procurement and Disposal Act and was approved by both the National Security Council and the Cabinet, Thugge said.
He also noted that the value of the banknotes was $109,422,740 at the time of the contract signing, compared to $112,856,000 for the 2019 series.
The new notes will feature the signatures of Thugge and Treasury Principal Secretary Chris Kiptoo, with a print date of 2024. They will include updated security threads with color-changing properties specific to each denomination while maintaining the design of the 2019 series.
De La Rue, the British firm in which the Kenyan government holds a 40 percent stake, closed its Kenyan operations at the end of the financial year in March 2023 due to a lack of new orders. The company spent £15.1 million (Sh2.48 billion) on severance, legal fees, and asset write-offs.
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Following De La Rue’s departure, the CBK began the search for a new currency printer. The Ruaraka plant, formerly owned by De La Rue, had seen the government acquire a 40 percent stake in 2017, and it had been responsible for printing the 2019 series until January 2023.
By mid-2023, CBK identified a risk of a currency shortage, particularly concerning Sh1,000 notes. The contract with G+D was reviewed and approved by the Cabinet, the National Treasury, and the Attorney-General, with initial consideration by the National Security Council due to its national security implications.
Under the five-year agreement, Kenya will receive 2.04 billion new banknotes to replace those that are damaged or worn.
According to Paul Wanyeki, CBK’s Director for Currency, Kenya will get 460 million 50-shilling notes, 690 million 100-shilling notes, 260 million 200-shilling notes, 170 million 500-shilling notes, and 460 million 1,000-shilling notes. The new Sh1,000 notes with enhanced security features are already in circulation.
Wanyeki noted that printing 1,000 banknotes now costs $53.5 (Sh6,842), compared to the $48 (Sh6,198) spent on the 2019 series by De La Rue, reflecting an 11 percent increase.
As banknotes age and are removed from circulation, it’s essential to periodically replenish the money supply, Thugge explained. Currently, approximately Sh330 billion in banknotes is in circulation.
Kenya Signs Sh14.2 Billion Deal with Giesecke+Devrient for New Banknotes
