THE KENYA CURRENCY CHANGE, REPERCUSSIONS AND CONSEQUENCES ACROSS THE BORDERS

 The wide reactions since the government made public the changes on June 1^st - from high levels of governments in the region through public and corporate organizations to the ordinary person is a clear manifestation of the shillings’ power regionally just like the US dollar is in global terms.

The new Kenyan bank notes.

The decommissioning of the Kshs. 1000 note among others will affect the entire East African region, particularly the East African Community (EAC) member’s states as the October 1^st deadline gallops even closer.

That is because the Kenya Currency has for decades been and remains the supreme and most powerful preferred currency for trading in the Eastern Africa region countries particularly Tanzania, Uganda, Rwanda and even more recently South Sudan. 

The wide reactions since the government made public the changes on June 1^st - from high levels of governments in the region through public and corporate organizations to the ordinary person is a clear manifestation of the shillings’ power regionally just like the US dollar is in global terms.

Therefore, the government’s decision to introduce the new Kshs. 1000 and terminate the old notes, the highest currency in Kenya like the US$ 100 is already having immediate and later long effects term consequences  in the EAC region.

 

Namanga

Therefore the decision first by the Tanzania Central Bank (TCB) and Uganda Central Bank (UCB) to stop accepting the Kenyan currency has affected many. That is because right from the border towns of Namanga, Isebania,Mwanza and Arusha, the Kenyan currency virtually rules the markets and is accepted as a mode of payment in businesses just like the American dollar is to the world.

Busia County Kenya National Chamber of Commerce and Industry (KNCCI) Chairman, Peter Kubebea, talking to The Weekly Vision said “The situation with Uganda is even more precarious because of the larger and open cross border business interests that country transacts with Kenya. The effect and consequences of Kenya’s currency change are going to be felt right from the border towns of Busia (Uganda), Malaba, Tororo, Mbale, Iganga, Jinja all the way to Kampala because millions are still held within the country’s businesses.”

 

Busia border point on the Kenyan side.

Mr. Kubebea said it is an open secret in Busia and Malaba towns and to those in the interior that when you are a Kenyan going to transact business in Uganda right from a mundane of Kshs. 50/100 transaction to millions of shillings - the Ugandan business people prefer transacting in Kenya shillings or particularly the Ksh. 1000 note and the Us dollar.

The other critical issue with Uganda over the new currency is that the reduced size and some of its colours look exactly like some of Uganda’s currency notes – particularly the new Kshs 200. 

According to the Lake Region Economic Bloc KNCCI Hillary Kasili spokesman said: “Citizens from our neighboring states have only a few immediate options, first to use the branches of the Kenyan or multi-national Commercial Financial Institutions operating in capitals of their countries and a few other towns with mostly single units per town or cross the border into Kenya to offload the cash.”

Mr. Kasili said just to mention a few from the Kenyan market are led by Equity Bank followed by the Kenya Commercial Bank (KCB) while the multi-nationals are led by the Standard Bank followed by Barclays.

With their Central Banks having closed doors on dealing in the Kenya currency, according to banking experts this is most likely to trigger immediately floodgates to Kenya’s financial institutions to get rid of the powerful cross border Kshs. 1000 notes by individual citizens and business organizations.

A veteran Banker who requested not to be named said: “The most panicked are likely to be Tanzanians, Ugandans, the South Sudanese, the Rwandese, even the Somali individuals and corporate business organizations – these are billions of Kenya shillings out there that have to be brought back for exchange for the new currency – hence the likely rush in the immediate future.”