Kenya’s cabinet approves joint venture in currency printing

De La Rue’s Commercial Legal director Douglas Denham at a press briefing at the Sarova Stanley on August 16, 2012. The controversial money printing contract awarded to British currency printer De La Rue can now get underway. PHOTO | NMG 

In Summary

The developments brings to an end a long standing dispute that saw the British money printer face opposition from legislators and civil society groups alike over its conditions for entering into the joint venture.

Nairobi. The controversial money printing contract awarded to British currency printer De La Rue can now get underway.

The approval from the cabinet brings to an end a decade-old stand-off over the lucrative deal.

A communication from the cabinet meeting on Thursday indicated that the contract, which was first approved in 2011 by former President Mwai Kibaki’s government, can now proceed.

“Cabinet approved a joint venture in currency printing between the Government of Kenya and De La Rue Currency and Security Printing (K) Limited,” read the Cabinet brief.

Under the joint venture, the Government of Kenya will take a 40 per cent stake while De La Rue Kenya factory will take a 60 per cent shareholding.

The developments brings to an end a long standing dispute that saw the British money printer face opposition from legislators and civil society groups alike over its conditions for entering into the joint venture.

In April this year, De La Rue dropped its condition of a 10-year exclusive currency printing contract as a prerequisite to forming the joint venture with the government.

The British firm made the about turn, citing expected sharp rise in demand for bank notes within the East African Community under the planned single currency regime.

It is this change of heart that informed the government to reconsider the partnership agreement.

In May 2013, the currency printing company threatened to close down its local subsidiary if the Kenya government did not grant it the exclusive rights after CBK said it would not guarantee it business.

In a presentation to the parliamentary Public Accounts Committee, which was investigating the 10-year exclusive contract, it argued that its business would be rendered unprofitable without the exclusive agreement. (NMG)