Cabinet on the spot over De La Rue deal

Photo/FILE

Employees at a currency printing firm. De La Rue is said to charge the government about Sh3.8 for a bank note compared to Sh1.8 of other international bank note printers.

The government could be paying double for printing of Kenyan currency after it dropped the competitive tendering process, a former Deputy Governor of the Central Bank has said.

Last month, the Cabinet made De La Rue Ruaraka, the exclusive currency printing company in Kenya after entering a deal that gave the government 40 per cent ownership of the company.

But according to former deputy governor of the Central Bank, Ms Jacinta Mwatela, such a venture has eliminated competition in the currency printing business.

“Most Central Banks in the region moved their business of procuring currency notes to more competitive manufacturers.

The pricing of currency products from De La Rue Ruaraka has remained uncompetitive,” said Ms Mwatela on Sunday in a statement.

“Any procurement of currency should be done within the confines of the Procurement Act,” she added.

Parliament’s Finance Committee is yet to table its report of an investigation into the deal with De La Rue Ruaraka. (READ: Queries over De La Rue cash deal)

However, Nominated MP Musikari Kombo said the team had raised eyebrows over the issue but the government said “its decision was made”.

“We received a presentation by the Central Bank but at that time we couldn’t do anything about it. We are yet to table our report and I cannot discuss it until we do,” Mr Kombo told the Nation on Sunday.

De La Rue is said to charge the government about Sh3.8 for a bank note compared to Sh1.8 of other international bank note printers.

In the deal, De La Rue was to be granted an export processing zone licence, which exempts it from paying taxes. The Cabinet paper was prepared when Amos Kimunya was Finance minister.

In justifying the deal, Treasury argued that leaving the currency printing job solely in the hands of a private printer exposes the country to risks of counterfeiting.

But Ms Mwatela said the company has been slow in embracing new technology to print the new generation currency. She questioned the objective of the deal, which comes at a time when the country is headed for a general election next year.

“With elections around the corner, when a government invests in the printer of its own currency, one cannot but stop to ponder the direction which our nation is taking,” said Ms Mwatela.

Additional reporting by John Ngirachu