Kenya recently launched new generation notes, becoming one of the first countries in Africa to scrap old notes, the announcement made on July 1 elicited various reactions, especially on the crackdown on the 1,000 shilling notes which has been challenged in court.
According to CBK Governor, the new notes are meant to crack down on embezzlement and counterfeit notes which are mainly used for illicit financial flows in Kenya and other parts of the region.
Barely two months later, the country has been reportedly grappled with the shortage of new currency, which has forced most banks to resort to the old notes which were being mopped from the market.
Unconfirmed reports indicate that the shortages were experiences from the second week after the banks configured their automated teller machines.
“Where there are shortages, nothing stops them from dispensing the old notes. These are just some operational hitches but I do not expect that banks will still be dispensing the old notes come August and September,” Mr Habil Olaka, KBA chief executive was quoted by Business Daily.
This report raises the question of whether the East African nation was prepared with the exercise amid questions whether the new currency notes will work for the economy and bring out the intended outcome for the exercise.
Ghana and India, who also scrapped old notes in a bid to curb illicit flows, failed after the new generation notes fuelled the illicit flows in the black market.
Under the leadership of President Muhamad Buhari, Nigeria also introduced the new currency which was largely blamed for the inflation which crashed the economy of the West African nation.
Bank regulator, Central Bank of Kenya has declined to comment on the issue, however, according to some players in the sector, the challenge can be attributed to acute training.
“We are using the train-the-trainers approach, where we train some trainers who go and train the rest,” a source who sought anonymity stated.
Featured Image Courtesy: Business Daily
Hi! Here’s a little something for you. In the first edition of The African Podcast by WeeTracker, get access to the formula behind ‘Building a $ 100 Mn company (twice) in Africa’ with the co-founder of Andela & Flutterwave – Iyinoluwa Aboyeji. The exclusive podcast goes live soon, Subscribe here to listen to it.
9500+ subscribers are getting our free newsletter on African technology, startups and innovators bi-weekly.
Made with ❤ in Africa