The Business Daily reported on Tuesday: “It was business as usual for many banks and currency dealers Monday as the old …[Kenya shilling 1,000 currency notes] … ceased to be legal tender after 25 years in the market. A visit to six banks in Nairobi and several forex dealers showed that there was nothing out of the ordinary. Bank officials said there was no rush to beat the deadline, with only a small increase in the number of customers asking to convert their cash on the last day noticed.”
The matter-of-fact tone was striking because these kinds of things usually end in near-civil war. There were, this being Kenya, the inevitable court cases about the legality of the currency note change and whether the Central Bank had broken the law by putting First President Jomo Kenyatta’s portrait on the notes.
For the middle class, the biggest irritation was that for a long time many parking lot machines at the malls didn’t take the new notes.
My favourite paragraph in the Business Daily story said, “The Central Bank of Kenya … also reached out to the Judiciary to ensure that any currency kept in the courts system as exhibits has been converted, after the necessary procedures”. That was great presence of my mind.
I have seen currency changes in my homeland and around the world, and they can be extremely ugly and leave many people in hospital or even the grave. India tried one in 2016 and made a royal mess of it. Unlike Kenya, which did it over a four-month period, India tried to pull it off in 50 days. There were queues stretching beyond the hills. A year later, economists were claiming that the cock-up shaved a few percentage points off India’s growth.
With such a boring demonetisation, which didn’t yield photos of fistfights in queues, and widows who’d lost their money cursing government and Central Bank officials, the only interesting stories were on the grapevine.
We heard stories about how this currency change was not really about tackling money laundering, smoking out corrupt fortunes and destabilising terrorism financing but to fix politicians who had stacked billions of shillings in buried containers, warehouses, bank vaults, ceilings of houses upcountry and such unusual places.
You see, as soon as the first new notes came on the market, although Kenya still had four months to go, immediately, you couldn’t exchange the old notes in neighbouring countries like Uganda and Tanzania.
Nairobi, apparently, scared Uganda and Tanzania with images of trailers arriving with dump and fungus-infested Kenya shillings dug up from caves where crooks were hiding it, destabilising their currencies.
In those countries, especially Uganda, these stories sounded very familiar. You can’t sit with Ugandans in Kampala for an hour before stories of the alleged massive amounts of money outside the banking system come up.
Some of them swear there is as much money stashed away in darkened rooms and ceilings as in the banking system. Some of it is dirty but there are many people who want to hide their fortune from the taxman, and there is a widely held view that well-connected extortion rings scour bank accounts and then shake down the owners of the large ones. Lately, kidnap for ransom has also become a popular weapon in Uganda.
The stories are incredible. Some claim that fumigators in Kampala today make more money airing and tending hidden currency than zapping bugs — because they charge a premium, which includes a mark-up for keeping their mouths shut. You will hear that you are likely to make more money renting your house in an upmarket suburb to a money hoarder than to human beings to live in.
When the periodic airing of the money arrives, it’s alleged that the owners go far upcountry and ferry workers who don’t know Kampala to take it out and sun it and brush off the dried mould. Some of them are driven the last few kilometres blindfolded. When their work is done, they are driven back to the village, and paid the kind of money they couldn’t dream of for their service — and, again, silence. There’s so much money, they claim, the owners can’t count it. They keep a tab on it by weighing it with large scales!
The hidden stashes, then, are actually impacting society, though in peculiar ways.
Anyway, here we are. I didn’t make the slightest effort to get the new currency note but, by Tuesday, there wasn’t an old one in my wallet or anywhere in sight. It was probably the experience of many people who didn’t have sacks of money buried in their backyard. How did it happen?
And, I think, for the first time this century, a deadline arrived in Kenya and passed without queues and demands for it to be extended for months. This time, we really have to give the devil his due.
Mr Onyango-Obbo is the curator of the Wall of Great Africans and publisher of explainer site Roguechiefs.com. @cobbo3