what will the process achieve for Kenyans?

The demonetization of Kenya’s KSh1,000 notes ends in a month. So far, conversion stands at approximately 100 million out of the 217 million one-thousand notes. As the number grows, questions as to how the future looks seize the minds of Kenyans.

Patrick Njoroge, the Central Bank Governor believes that the process will help to give Kenya a fresh start as the country rids itself of the old KSh1,000 notes.

The governor believes that demonetization’s key success is making sure all Kenyans convert their old notes. While the conversion of the 1000 note is a half success, the governor believes that it is too early to draw conclusions.

Mr. Njoroge pointed out that Kenyans can only appreciate the totality of the demonetization process come September 30. This is because some Kenyans prefer to wait until the last minute.

Furthermore, people with proceeds from crime will shy away from the process to avoid scrutiny.

Demonetization will achieve parts of its success if the process does not convert all the liquid currency in the economy. “This will help diminish the wealth of individuals who stole hard cash” noted Mr. Njoroge.

While the war against corruption was part of demonetization’s motivation, the governor warns that criminals might have converted some money to other assets.

Finally, the Central bank plans to prevent a repeat of the process in a few years. He believes that after September 30, the economy will have less flow of illicit funds.

This, and a sustainable war against corruption will help prevent the need to demonetize again in the near future. Besides, the growth of digital cash platforms such as M-Pesa will promote a society with less cash. Such a society will experience less theft in cash, therefore reducing the need to demonetize.