Economy

Cost of printing Kenya currency shoots to Sh15bn

cash

Kenya currency notes. FILE PHOTO | NMG

The cost of printing new-look Kenya currency has increased by half to Sh15 billion amid delays and introduction of a new coat of varnish to reduce wear and tear and prolong their life in circulation.

Central Bank of Kenya on Monday said provision of the new generation currency will cost Sh15 billion, which is Sh5 billion more than the initial cost of tender.

British security printing firm De La Rue International last month retained tender to print Kenya’s new-look currency after the Court of Appeal reversed a High Court decision that nullified the award.

“Government Consolidated Fund (GRF) resources are needed for…provision of new generation currency in line with the 2010 Constitution. CBK is mandated to issue new generation currency, with an expected cost of Sh15 billion,” said the CBK in a statement.

Kenya’s plan to switch to new generation bank notes in compliance with the 2010 Constitution has delayed following court fights over the bank notes printing tender and opposition to its decades old contract.

De La Rue has had a stranglehold on Kenya’s lucrative money printing business except for the period between 1966 and 1985 when another UK firm, Bradbury Wilkinson, did the job. There was opposition to extending the contract under the new currency.

The British firm last year beat three other European bank note printing firms, German firm Giesecke & Devrient, Swedish firm Crane Currency and Oberthur Fiduciaire of France to the hotly contested and lucrative contract.

Swedish firm Crane AB, also bidding for currency printing tender, moved to court and accused the central bank of collusion after losing.

In October, De La Rue International will retain the tender to print Kenya’s new-look currency after the Court of Appeal reversed High Court decision that nullified the award.

The delays could have escalated the costs.

De La Rue, which mints Kenyan currency at its factory in Ruaraka, Nairobi, said it was adding the fresh coat which will see paper money stay longer before getting defaced.

The more durable paper money is expected to slash printing costs and ultimately reduce cash cost.

Notes have been defaced or damaged due to poor handling, which prompted the Central Bank of Kenya to issue regulations that provide a jail term of up to three years or a fine of Sh500,000 for those who mishandle notes and coins.

The printing tender has been seen as an acid test for the banking regulator, which has never successfully floated a competitive international currency printing bid since it was established in 1966.