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{
"id": 191919,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/191919/?format=api",
"text_counter": 133,
"type": "speech",
"speaker_name": "Mr. Kimunya",
"speaker_title": "The Minister for Finance",
"speaker": {
"id": 174,
"legal_name": "Amos Muhinga Kimunya",
"slug": "amos-kimunya"
},
"content": " Mr. Deputy Speaker, Sir, I beg the House to be attentive to this. The matter has been blown out of proportion, it has been taken out to the media and this is the opportunity for the House to get the truth. As I was saying, De La Rue International Ltd. has not supplied any new generation notes since the agreement that was entered into on 4th May, 2006 was mutually cancelled by the parties. The agreement was cancelled after thorough consultations which brought out several issues including the following: First, the concept of new currency had not been comprehensively dissected and addressed by the bank. For instance, the fate of the old currency was not determined and was not clear whether the old currency would be demonetised or if the new currency would be debased. In other words, we were replacing one currency with another, without provision for what happens to all the money in circulation. The second issue was that of storage. This was a major constraint since the new consignment would have been printed, shipped and delivered to the CBK for storage. It is important to note that under the new Generation Currency Contract, the printing of the money was supposed to be off-shore and all the money was to be printed, delivered to Kenya and given to the CBK. Now, without the strong rooms and vaults that were constructed in Times Tower which have now been taken over and transferred to the Kenya Revenue Authority, storage of 1.7 million pieces June 26, 2008 PARLIAMENTARY DEBATES 1449 of currency would have been a major problem to the CBK. The third item under consideration was that the cost implication of the new currency to commercial banks and to Kenyans in general had not been considered especially as it relates to changes necessary to ensure conformity with the technological requirements of the new currency. There was also need for public education and sensitisation which had not been factored in the agreement. The fourth item was that the CBK requirement for bank notes after the three-year agreement for the new currency, which expires in the year 2009, had not been addressed. Number five, under the terms of the agreement, all the security features - and this is very important - in the bank notes were the property of the printer and not the CBK. Since the contract had not seen the need to purchase the corporate security features of this new generation currency notes by the CBK, it meant that every time the supplier is changed on the basis of cost or price competitiveness, a new currency design would emerge. In effect, that means that we would have to be changing the currency every three years because the contract was run for three years and you have a new competitive bid. Mr. Deputy Speaker, Sir, the sixth item that has not been considered is the fate of 300-plus jobs at the Ruaraka factory. It was not considered, as the production of the new generation currency would have to be done abroad for cost competitiveness with the result that the factory in Ruaraka would have had to be closed down. It would have been difficult for a Government institution like the Central Bank of Kenya (CBK) to justify the export of jobs abroad given the current levels of unemployment in the country. Mr. Deputy Speaker, Sir, on the second item under Dr. Khalwale's request, I want to state that one of the key roles of the senior bank staff is to provide advice to management at the bank. This also applies to whichever bank committees they serve in. In this regard, I am not aware of any bank staff who came out strongly to oppose an attempt to cancel the new generation currency agreement. The information I have, and which is on public record, is that all this was discussed and approved by the Board of Governors (BOG) of the CBK. The technocrats at the CBK do not advise the Minister. Mr. Deputy Speaker, Sir, on the third item, it is critical and I want to state both as the Minister for Finance, and as Mr. Amos Kimunya, the Member of Parliament for Kipipiri Constituency, that I have absolutely no personal interest in the matter. All my actions in the matter were strictly guided by the public interest and the advise I received from the CBK. Mr. Deputy Speaker, Sir, on the fourth item, I want to state that I, as Minister, have not committed the Government of Kenya with De La Rue in a joint venture. The issue of a joint venture with De La Rue in currency production was discussed in detail and approved by the Cabinet. It is only after Cabinet approval that Treasury constituted a multi-disciplinary technical four-member task force which includes Treasury, CBK, De La Rue and the Attorney-General's office to negotiate with De La Rue on the issue of a joint venture. The negotiations are still ongoing and have not been concluded. I want to state that the overriding objective of seeking this joint venture is to ensure that the security and access to the required currency in the most cost effective manner, while ensuring local production with the added benefit of job creation and contribution to the growth of our domestic economy. Mr. Deputy Speaker, Sir, lastly, I want to state that I am not aware of any funds that have been lost in this matter. Thank you."
}