Kenya is likely to continue relying heavily on hard cash for payments. Cash accounts for 98 per cent of total transactions, according to a report by McKinsey and Mastercard Advisers.
In November 2018, British security printer De La Rue won a Sh11.1 billion (£85 million) three-year contract to design and manufacture Kenya’s new generation currency.
Always leading. Constantly innovating. Watch our latest film to find out how for over 200 years De La Rue has defined the industries it leads. #ConstantInnovation https://t.co/DpuUg0mB1s pic.twitter.com/U9kVpabLoz
— De La Rue (@DeLaRuePlc) November 15, 2018
In its latest disclosure at the London Stock Exchange ,De La Rue said that it plans to deliver the first batch of the banknotes, which will not bear the image of an individual, during the 3 year period.
De La Rue is a British banknote manufacturing, security printing of passports and tax stamps, brand authentication and paper-making company with headquarters in Basingstoke, Hampshire, England.
Established over 200 years ago, De La Rue works with governments, central banks and commercial organisations around the globe in three core areas:
Cash Supply Chain, producing banknotes; Citizen Identity including passports and identity management; and Product Authentication protecting brands and fighting counterfeiting.
There are overseas offices in Kenya, Sri Lanka and Maltaa and is listed on the London Stock Exchange.
De La Rue, which has operated in Kenya for more than 25 years, says it is investing more in its factory in Ruaraka, Nairobi as part of a long-term plan to become a regional and Pan-African security printer.
The latest deal with the CBK will enable the government to comply with the Constitution, which says that “notes and coins issued by the Central Bank of Kenya may bear images that depict or symbolise an aspect of Kenya but shall not bear the portrait of an individual.”
Kenyan currency currently bears the images of former presidents Jomo Kenyatta, Daniel arap Moi and Mwai Kibaki.
De La Rue’s contract comes after the government took a 40 per cent stake in the multinational’s local subsidiary (De La Rue Kenya EPZ Limited), paying £5 million (Sh654 million) in the transaction.
The stake gives the government, the largest customer of the multinational, an opportunity to recoup part of its currency printing expenses through profit sharing.
De La Rue is also betting on the joint venture to smoothen its relations with the government which has been rocky for years.
Under the agreement, the printer continues to operate and manage the joint venture.
Besides local customers, including the government, the De La Rue factory also prints currency and documents for export to overseas clients.
However , increased uptake of digital payments enabled by cards, Internet and mobile telecommunications will reduce cash dominance in the long term.
Singapore, the Netherlands and France have been the most successful countries at weaning themselves off cash. Only 39, 40 and 41 per cent of transactions in these countries are settled in hard currency respectively.
The stock of outstanding notes and coins in Kenya stands at about Sh1.4 trillion, according to CBK statistics.
The new currency will circulate concurrently with the current notes and coins.
The CBK had invited the public to submit their proposals for features to be included in the upcoming banknotes.
The new currency is expected to capture the progressivity of the Constitution and the country’s growth aspirations as captured in the Vision 2030.