Corrupt Leaders Hoarding Millions to Be Exposed by CBK’s Elimination of KSh. 1,000 Notes

By Korir Isaac / June 1, 2019



Governors

CBK Governor Patrick Njoroge on Saturday announced that all old 1,000 shillings notes have been withdrawn and Kenyans have until October 1 to exchange them for the new generation currencies. What does this mean to the citizens and the corrupt leaders with loads of cash at hand?

Governor Njoroge noted that the move is meant curb illicit finance, which seems like a necessary evil but at the same time, it’s caught many off guard.

For one, if the government holds true on this policy, corrupt leaders with millions of 1,000 currency notes will be forced to come out or risk losing their “wealth.”

Given that the announcement came unexpectedly, corrupt leaders aren’t the only ones that will be affected.

READ ALSO: Current 1,000 Banknotes to Become Useless By October

Recent statistics from the Central Bank of Kenya showed that the hard-cold cash being employed in the country stands at a settlement of up to 96 percent of daily expenses ahead of mobile cash, bank transfers, and pay bill solutions.

What this means is that Kenya is highly dependent on cash transactions as it is the most preferred mode of discharging payments regardless of the rapidly growing digital sector.

The ripple effect of this policy flows all the way to the low-income earners. One factor that contributes to this challenge is the fact that most Kenyans do not have bank accounts.

Although not everyone has the 1,000 currency notes, there is no denying that from today, there will be long lines at banks and ATMs, which could instigate chaos.

If there is one thing we’d all love to see is how leaders with cash under their mattresses get exposed. It will be a sight for sore eyes not to mention how Kenyans will get to know who has been stealing public funds.

The move is aimed at breaking the grip of corruption that’s become uncontrollable in the country as well as getting rid of black money.

SEE ALSO: Inflation Rate for May Eases to 5.49 Percent

Black money and increased cases of corruption are some of the biggest obstacles in eradicating poverty in the country.

Anyone hoarding bills will be forced to deposit or exchange the money. This is bound to allow the relevant authorities to delve deeper into the sources of such cash.

But, will it be the start of the end of corruption? And if these leaders won’t justify how they hold so much money in cash, what will be done? Will they be brave enough to hide their corrupt nature and let their money become obsolete? We all hope their identities won’t be hidden.

Now, from an economic point of view, won’t the sudden announcement send the economy plunging? Cash sales will become stagnant, tourists will be paralyzed by the inability to use the cash in their possession.

SEE: It is a Done Deal, KCB Group given go-ahead to Buy NBK

Economists will also tell you that this cash crunch has a rippling effect on the supply chain, which might lead to manufacturers cutting jobs, lower productions, and low demand for raw materials. In case the events turn out this way, Kenya will suffer a drop in GDP rendering the current projections of growth a mere dream.

Here is another thing worth mentioning, what has the government put in place to ensure that there is no fraud during the exchange process? It should impose limits on the amount of cash currency an individual can swap.

Here is a loophole though, what if an individual exchanges cash in one bank then heads over to a different bank to do the same? The whole point of the policy implementation is to get rid of corruption, which is why a quick solution is needed here.

The decision by the government might have serious effects like what happened to India in 2016 when it rendered notes belonging to 86 percent of the country’s currency obsolete. It didn’t augur well with the economy.

Similarly, Canada retired its 1,000-dollar currency over its popularity in criminal use. The notes, however, retained their status as legal tenders, and many of them still remained at large. Other countries that have done the same include Singapore and Venezuela.

READ: List of 17 Banned Vehicle Parts and the Government’s Resolve to Support Local Manufacturing

Nonetheless, the decision will phase out criminal acts including the funding of terrorists, get rid of tax evasion, and put a stop to illegal underground activities like drug and human trafficking.



About Korir Isaac

A creative, tenacious, and passionate journalist with impeccable ethics and a nose for anticipated and spontaneous news. He may not say it, but he sure can make one hell of a story.

View other posts by Korir Isaac


More Articles From This Author










Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE



ARCHIVES

2019
  • January 2019 (256)
  • February 2019 (216)
  • March 2019 (285)
  • April 2019 (254)
  • May 2019 (272)
  • June 2019 (251)
  • July 2019 (339)
  • August 2019 (293)
  • September 2019 (307)
  • October 2019 (185)
  • 2018
  • January 2018 (291)
  • February 2018 (219)
  • March 2018 (278)
  • April 2018 (225)
  • May 2018 (238)
  • June 2018 (178)
  • July 2018 (257)
  • August 2018 (249)
  • September 2018 (256)
  • October 2018 (287)
  • November 2018 (284)
  • December 2018 (187)
  • 2017
  • January 2017 (183)
  • February 2017 (195)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (190)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (165)
  • February 2016 (165)
  • March 2016 (190)
  • April 2016 (143)
  • May 2016 (245)
  • June 2016 (182)
  • July 2016 (271)
  • August 2016 (248)
  • September 2016 (234)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (166)
  • April 2015 (108)
  • May 2015 (116)
  • June 2015 (120)
  • July 2015 (148)
  • August 2015 (157)
  • September 2015 (188)
  • October 2015 (169)
  • November 2015 (174)
  • December 2015 (207)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950