The Central Bank of Kenya of Kenya headquarters in Nairobi.
The Central Bank of Kenya (CBK) says it awarded the Sh14.5 billion currency printing tender to a German firm after a nod from the National Security Council (NSC), downplaying the Auditor-General’s position that it flouted the procurement process.
Auditor-General Nancy Gathungu flagged irregularities in CBK’s secretive award of the tender to Germany’s Giesecke+Devrient Currency Technologies GmbH (G+D), saying the CBK management failed to appoint a special committee to guide the search for the currency printer of fresh bank notes.
However, CBK governor Kamau Thugge said on Friday during the post-monetary policy committee media briefing the apex bank had explained to the office of Auditor-General that the procurement received the blessings of NSC and therefore had to proceed.
“We have engaged with the Auditor-General and we did explain that this procurement process was approved by the Cabinet and the National Security Council and there was that approval to allow us to undertake this procurement process,” said Dr Thugge in response to this publication.
NSC exercises supervisory control over all national security organs and its meetings are presided over by President William Ruto.
Other members of the council include deputy President, chief of Kenya Defence Forces, Director-General of the National Intelligence Service, Inspector-General of the National Police Service, Attorney-General and cabinet secretaries for defence, foreign affairs and internal security.
The nod from Cabinet and NSC saw CBK drop Britain’s De La Rue that had been printing Kenya’s currency for decades.
The powerful body also saw CBK deviate from its internal processes that required setting up a special committee to handle the procurement of classified items or bringing on board the Director-General of Public Procurement Regulatory Authority to monitor the process.
Regulations 84 of the Public Procurement and Asset Disposal Regulations (2020) says an accounting officer of a national security organ or procuring entity that deals with classified items shall appoint a special committee to handle the procurement and disposal of its classified items.
“In establishing the special committee, the accounting officer shall submit the names of the nominated members of the special committee to the respective Cabinet Secretary, county executive committee or governing body of that procuring entity for approval,” the regulations say.
Under the deal, the German firm is expected to print 2.04 billion bank notes in five years to replace those worn out or destroyed, with 330 billion bank notes currently estimated to be circulating in the country.
The tender terms included the printing of 460 million pieces of the Sh50 bank note, 690 million pieces of the Sh100 note, 260 million pieces of the Sh200 note, 170 million pieces of the Sh500 note and 460 million pieces of the Sh1,000 note.
Last month, CBK announced the rollout of the redesigned banknotes featuring the signature of Dr Thugge, alongside that of the Treasury PS Chris Kiptoo.
It took the National Assembly's Finance and National Planning Committee to compel Dr Thugge to reveal the name of the German firm and how much the deal will cost the taxpayer to print the new currency. He told Parliament that the hurried procurement was meant to avert notes stock out.
