Revelations by the Central Bank of Kenya (CBK) on the collected sums of the old generation Ksh.1000 notes have served to raise more questions than answers as financial sector allied experts pierce through the shared numbers.
According to data from the CBK, 58 percent transactions in the three months to September 1 sat below Ksh.500,000 in value with only 24 individuals bringing forth sums in excess of Ksh.2 million to the interchange.
While the CBK says the values are reflective of expectations, analysts have peaked through the findings to query the sum total of the perceived illicit flows within the financial system.
“The CBK may as well have over-estimated the sum of money held in the ‘black economy’. Alternatively, illicit cash might have been well embedded in the system to filter right through the sieve,” reckoned Kenya Business Guide research analyst Titus Maina.
The sum of illicit flows in the economy lies only in estimations with the CBK, at best, raising the alarm on the funds proliferation of transactions.
“We have accessed the grave concern that our large bank notes, particularly the older Ksh.1000 series are being used for illicit financial flows and in other countries in the region,” CBK Governor Patrick Njoroge told Kenyans on June 1.
“These are grave concerns that would jeopardize proper transactions and the conduct of commerce in our currency”.
Dr. Njoroge has kept his hands off the revealing trigger on the sum of returned notes, leaving any disclosures to the very last day as speculation abound on the success of the directive.
However, the CBK has made the additional disclosure of suspect transactions which might as well point in the direction of covert clean up operations.
Citizen Digital’s inquiry into curious cash purchases in Narok County by CBK’s account has since established inflated valuations on wheat, livestock and even rental charges on land.
Even so, CBK’s push back against the disclosure of net transactions in the period leaves all to speculation.
“The likelihood of deception through agriculture based purchases is real but can’t be taken for face value until we establish the actual number of demonetized sums from the CBK,” said Cytonn Investment analyst David Ngugi.
The magic number
The early pointer to the success or failure of demonetization will lie in the disclosure of the ‘magic’ demonetized notes upon the rounding up of the process on September 30.
The present yardstick to count success in the process is represented by 217.6 million individual Ksh.1000 old series notes which were in circulation as of June 1.
Subsequently, the CBK made the disclosure of the collection of 100 million pieces of the circulation Ksh.1000 notes on August 29 to leave into contention the status of 117.6 million pieces in the period to September 30.
The return of a sum lesser than the net 217.6 million pieces will mark some level of confidence in the purging of illicit financial flows while a sum equal to the number of circulating notes will mean the colossal failure of the demonetization process.
For Citizen TV updates
Join @citizentvke Telegram channel
Video Of The Day: Sossion: What is happening to KNUT is a test for labour movement in this country | NEWSNIGHT |