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Brief history of Kenya’s currency printing politics

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By JOHN KAMAU
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Between late 1989 and early 1990, President Daniel Moi gave one of his British friends, Roland ‘Tiny’ Rowland, a contract to print the Kenyan currency — and that was the only person ever to edge out De La Rue out of the multibillion-shilling contract.

This deal was actually fixed at the Norfolk Hotel, then part of Tiny Rowland’s empire, and where he had a reserved table on the right side of the entrance.

Here, he would hobnob with all the deal brokers, wire-pullers, power players and busybodies who would want to meet him when on the Kenyan business tour.

Mr Rowland loved Nairobi and would later build the iconic Lonrho House between Kaunda Street and Standard street, and where Moi’s court-jester, Mark Too, a semi-literate former milkman, had an office as the deputy chairman of the Lonrho East Africa; the face of the company’s massive interests in the region.

Actually, Lonrho East Africa had no chairman by then — and Mark Too was not deputising anyone. He would later assume the title of chairman.

Mr Too had earned the position at the Norfolk when Mr Rowland was desperate to get into the inner circle of the Nyayo regime.

He was told of a Mr Mark Too, a Nandi businessman; and Mr Rowland went upcountry to meet him.

According to Mr Rowland’s biographer Tom Bower, the 1979 meeting was a test: “Can you get the president on the phone?” he asked.

Mr Too is reported to have picked the phone and dialled the new president. They spoke — and in a second, the British tycoon was convinced that this was the man he wanted in East Africa.

As a result, Mark Too managed to edge out Lonrho’s executive director, the Princeton-trained banker Udi Gecaga, then husband to Jomo Kenyatta’s daughter, Jeni.

‘Tiny’ Rowland, as he was best known because of his height (he was 1.8 metres), knew how to mix business and politics — and that is how he managed to get multimillion dollar deals.

“No wonder the British Prime Minister Edward Heath once described him as ‘the unpleasant and unacceptable face of capitalism’ but the tycoon didn’t give a hoot: ‘You can never have enough enemies.”‘

When Udi was brought to Lonrho, he was to occupy a position similar to that of West Africa’s Mr Fix-it Gil Olympio, the brilliant son of the first president of Togo, Sylvanus Olympio, who was killed in 1967 in a successful army coup led by Sergeant Gnassingbe Eyadema.

Gil was a graduate of Oxford and London School of Economics and once worked with the International Monetary Fund (IMF).

In Nairobi, Mr Rowland had Mark Too, a complete opposite of Mr Olympio, who would also broker deals from this table — the Lonrho power desk, known for its unending flow of top-notch Chardonnays and expensive steak cuts.

At the back, some managers of Harrison and Sons had an office and they would fly to Nairobi and spend a week at the Lord Delamere Terrace bar — just waiting for Tiny Rowland’s appearance, according to a source familiar with the itinerary.

Actually, Tiny Rowland had not founded Harrison and Sons but had acquired this company, established in 1750, just about the time he was meeting Mark Too, to print currency given its long tradition of printing bank notes and stamps for the British government.

The business of printing currency is cartel-based, cut-throat and a reserve of just a few companies.

While De la Rue had been printing Kenyan currency for ages, it had always managed to outwit its competitors in Kenya — at times by playing diplomatic and commercial politics.

Winning currency printing contracts — often through single-sourcing — is a high-stakes business because it is continuous and lucrative for both the brokers and the shareholders.

By then, Mr Rowland was a well-known corporate raider and his company, Lonrho, was one of the most prominent at the British stock market with the Financial Times describing it as the “symbol of buccaneering capitalism”.

“He tried to look and speak with the affected airs and eccentricities of an arch-type Old Etonian,” Gordon Fischer wrote in his book Fleeting Moments.

At first, Lonrho was looking for a Mr Fix-It in East Africa and poured his troubles on Kenyatta’s colonial-era minister Bruce McKenzie to the Kenyan High Commissioner in London, Mr Ngethe Njoroge.

The Kenyan diplomat had been introduced to Rowland by Zairean diplomat Thomas Kanza, regarded as one of the first Africans to attend the distinguished Louvain University near Brussels.

Mr Njoroge was a brother to Kenyatta’s Cabinet minister Njoroge Mungai, and was quick to recommend his relative, Udi Gecaga.

A meeting was arranged and the two met in London: “Call me Tiny,” Mr Rowland said as he extended his hand. “Can I call you Udi?”

Udi was only 26 but Mr Rowland had found what he was looking for: a gatekeeper with a foot at State House.

But with Kenyatta’s death in 1978, he had to look for another person, Mark Too, and that is how he would manage to get a chance to print currency through the now defunct Harrison and Sons, which was single-sourced to print Sh20 and Sh50 notes in addition to second generation identity cards.

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The Kenyan currency was printed by De La Rue during colonial times, but later it lost the tender to an English company, Bradbury & Wilkinson, after it started printing its own currency in 1966 with the death of the East African currency board.

Although De La Rue would manage to get back this contract, it also bought Bradbury & Wilkinson, its major rival, through an acquisition concluded in 1986. It was one of the many ways to survive as a company — purchasing and killing your rivals.

The entry of Tiny Rowland and his grabbing of the high-circulation Sh20 and Sh50 notes sent shock waves to the British company, and they decided to do something: They started to plot on how to buy the company from Lonrho, which they did in 1997.

Elsewhere, according to Tiny Rowland’s biographer Mark Bowen, the business mogul had fallen out with Kenya’s Cabinet minister, Nicholas Biwott, now deceased, who demanded some kickbacks.

“The trouble with Biwott is that everyone in Kenya knows that he has collected tens of millions in commissions, but not from us, which is why we didn’t get the sugar or the pipeline, or any other contract for that matter,” Mr Rowland told his own The Observer publication as he launched an incessant attack on Mr Biwott in the British newspaper.

It is now known that Mr Rowland also encouraged other British newspapers to protest about corruption in Kenya — which eventually led to his fall out with Moi and he lost the printing contract.

In 1991, just about the time that Tiny Rowland had started winning some currency tenders, De La Rue was allowed to build a factory at the former Central Bank of Kenya playfield on LR 78784, and was given an EPZ (Export Processing Zone) status — thanks to Hezekiah Oyugi, then a powerful minister for Internal security, and Ketan Somaia, the now jailed conman and thief.

This allowed the company to enjoy a 10-year tax holiday and they brought some old machines then stored in Malta, and which had previously been used in New Zealand which had abandoned the making of paper notes for polymer.

Whether this led to the fall out between Tiny Rowland and Somaia is not clear, but historian Charles Hornsby — author of a Kenya: A History since Independence — says that the British businessman wrote to Moi during that period “claiming that Somaia had shown him procurement forms from the Office of the President with spaces for prices left blank, to be filled as he wished”.

By the time Moi was leaving office, De La Rue had managed to get an exclusive 10-year contract signed a few days before Mwai Kibaki was sworn in.

This was the first contract that President Kibaki cancelled after a meeting with his Finance Minister David Mwiraria and Central Bank governor Andrew Mullei in March 2003.

In a letter dated March 13, 2003, Dr Mullei wrote to Mwiraria to confirm the State House agreement: “That De La Rue be informed that a decision has been made to go for open tender for the supply of our notes for the period after December 2004, it being understood that De La Rue will be free to participate in bidding.”

This move, together with the loss of the Land Rover contract for government vehicles, incensed the British government, which eyed Kibaki with suspicion.

The reason the deal was cancelled was because it had been single-sourced and was to become effective on January 1, 2003 after the Narc government came to power.

Mwiraria described this contract, signed by former CBK governor Nahashon Nyaga, as “fishy”.

Mwiraria had told Dr Mullei in a letter: “There was no reason for the former government to award the contract as early as they did unless there was something fishy.”

The attempt to right the wrongs on currency printing deals backfired so badly as the companies bidding for the tender got entangled in the Anglo Leasing crisis.

In the restricted tendering, some of the companies invited to show interest included French company François-Charles Oberthur Fiduciaire, Germany’s Giesecke & Devrient, Canadian Banknote Company, Britain’s De La Rue, Holland’s Joh Enschede Banknotes, Orell Fussli of Switzerland and Australia’s Note Printing Australia Limited.

But when CBK picked the finalists, it dropped Canadian Banknotes and Note Printing Australia leading to a protest by the Canadian High Commission in Nairobi.

But with the emergence of Anglo Leasing scandal, one of the top bidders, François-Charles Oberthur Fiduciaire, was busy handling the damage done after it was linked to the aborted passport printing saga.

It is a long story … but of interest is that behind the tenders and the fight to control the currency printing is a huge battle won in boardrooms and over coffee. There are many other sideshows, thanks to deal brokers and wire-pullers.

Mr Kamau is the Editor, Investigations and Special Projects. [email protected]; @johnkamau1



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Public officers above 58 years and with pre-existing conditions told to work from home: The Standard

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Head of Public Service Joseph Kinyua. [File, Standard]
In a document from Head of Public Service, Joseph Kinyua new measure have been outlined to curb the bulging spread of covid-19. Public officers with underlying health conditions and those who are over 58 years -a group that experts have classified as most vulnerable to the virus will be required to execute their duties from home.

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However, the new rule excluded personnel in the security sector and other critical and essential services.
“All State and public officers with pre-existing medical conditions and/or aged 58 years and above serving in CSG5 (job group ‘S’) and below or their equivalents should forthwith work from home,” read the document,” read the document.
To ensure that those working from home deliver, the Public Service directs that there be clear assignments and targets tasked for the period designated and a clear reporting line to monitor and review work done.
SEE ALSO: Thinking inside the cardboard box for post-lockdown work stations
Others measures outlined in the document include the provision of personal protective equipment to staff, provision of sanitizers and access to washing facilities fitted with soap and water, temperature checks for all staff and clients entering public offices regular fumigation of office premises and vehicles and minimizing of visitors except by prior appointments.
Officers who contract the virus and come back to work after quarantine or isolation period will be required to follow specific directives such as obtaining clearance from the isolation facility certified by the designated persons indicating that the public officer is free and safe from Covid-19. The officer will also be required to stay away from duty station for a period of seven days after the date of medical certification.
“The period a public officer spends in quarantine or isolation due to Covid-19, shall be treated as sick leave and shall be subject to the Provisions of the Human Resource Policy and procedures Manual for the Public Service(May,2016),” read the document.
The service has also made discrimination and stigmatization an offence and has guaranteed those affected with the virus to receive adequate access to mental health and psychosocial supported offered by the government.
The new directives targeting the Public Services come at a time when Kenyans have increasingly shown lack of strict observance of the issued guidelines even as the number of positive Covid-19 cases skyrocket to 13,771 and leaving 238 dead as of today.
SEE ALSO: Working from home could be blessing in disguise for persons with disabilities
Principal Secretaries/ Accounting Officers will be personally responsible for effective enforcement and compliance of the current guidelines and any future directives issued to mitigate the spread of Covid-19.

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Uhuru convenes summit to review rising Covid-19 cases: The Standard

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President Uhuru Kenyatta (pictured) will on Friday, July 24, meet governors following the ballooning Covid-19 infections in recent days.
The session will among other things review the efficacy of the containment measures in place and review the impact of the phased easing of the restrictions, State House said in a statement.
This story is being updated.
SEE ALSO: Sakaja resigns from Covid-19 Senate committee, in court tomorrow

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Drastic life changes affecting mental health

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Kenya has been ranked 6th among African countries with the highest cases of depression, this has triggered anxiety by the World Health Organization (WHO), with 1.9 million people suffering from a form of mental conditions such as depression, substance abuse.

KBC Radio_KICD Timetable

Globally, one in four people is affected by mental or neurological disorders at some point in their lives, this is according to the WHO.

Currently, around 450 million people suffer from such conditions, placing mental disorders among the leading causes of ill-health and disability worldwide.

The pandemic has also been known to cause significant distress, mostly affecting the state of one’s mental well-being.

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With the spread of the COVID-19 pandemic attributed to the novel Coronavirus disease, millions have been affected globally with over 14 million infections and half a million deaths as to date. This has brought about uncertainty coupled with difficult situations, including job loss and the risk of contracting the deadly virus.

In Kenya the first Coronavirus case was reported in Nairobi by the Ministry of Health on the 12th March 2020.  It was not until the government put in place precautionary measures including a curfew and lockdown (the latter having being lifted) due to an increase in the number of infections that people began feeling its effect both economically and socially.

A study by Dr. Habil Otanga,  a Lecturer at the University of Nairobi, Department of Psychology says  that such measures can in turn lead to surge in mental related illnesses including depression, feelings of confusion, anger and fear, and even substance abuse. It also brings with it a sense of boredom, loneliness, anger, isolation and frustration. In the post-quarantine/isolation period, loss of employment due to the depressed economy and the stigma around the disease are also likely to lead to mental health problems.

The Kenya National Bureau of Statistics (KNBS) states that at least 300,000 Kenyans have lost their jobs due to the Coronavirus pandemic between the period of January and March this year.

KNBC noted that the number of employed Kenyans plunged to 17.8 million as of March from 18.1 million people as compared to last year in December. The Report states that the unemployment rate in Kenya stands at 13.7 per cent as of March this year while it stood 12.4 per cent in December 2019.

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Mama T (not her real name) is among millions of Kenyans who have been affected by containment measures put in place to curb the spread of the virus, either by losing their source of income or having to work under tough guidelines put in place by the MOH.

As young mother and an event organizer, she has found it hard to explain to her children why they cannot go to school or socialize freely with their peers as before.

“Sometimes it gets difficult as they do not understand what is happening due to their age, this at times becomes hard on me as they often think I am punishing them,”

Her contract was put on hold as no event or public gatherings can take place due to the pandemic. This has brought other challenges along with it, as she has to find means of fending for her family expenditures that including rent and food.

“I often wake up in the middle of the night with worries about my next move as the pandemic does not exhibit any signs of easing up,” she says. She adds that she has been forced to sort for manual jobs to keep her family afloat.

Ms. Mary Wahome, a Counseling Psychologist and Programs Director at ‘The Reason to Hope,’ in Karen, Nairobi says that such kind of drastic life changes have an adverse effect on one’s mental status including their family members and if not addressed early can lead to depression among other issues.

“We have had cases of people indulging in substance abuse to deal with the uncertainty and stress brought about by the pandemic, this in turn leads to dependence and also domestic abuse,”

Sam Njoroge , a waiter at a local hotel in Kiambu, has found himself indulging in substance abuse due to challenges he is facing after the hotel he was working in was closed down as it has not yet met the standards required by the MOH to open.

“My day starts at 6am where I go to a local pub, here I can get a drink for as little as Sh30, It makes me suppress the frustration I feel.” he says.

Sam is among the many who have found themselves in the same predicament and resulted to substance abuse finding ways to beat strict measures put in place by the government on the sale of alcohol so as to cope.

Mary says, situations like Sam’s are dangerous and if not addressed early can lead to serious complications, including addiction and dependency, violent behavior and also early death due to health complications.

She has, however, lauded the government for encouraging mental wellness and also launching the Psychological First Aid (PFA) guide in the wake of the virus putting emphasis on the three action principal of look, listen and link. “When we follow this it will be easy to identify an individual in distress and also offer assistance”.

Mary has urged anyone feeling the weight of the virus taking a toll on them not to hesitate but look for someone to talk to.

“You should not only seek help from a specialist but also talk to a friend, let them know what you are undergoing and how you feel, this will help ease their emotional stress and also find ways of dealing with the situation they are facing,” She added

Mary continued to stress on the need to perform frequent body exercises as a form of stress relief, reading and also taking advantage of this unfortunate COVID-19 period to engage in hobbies and talent development.

“Let people take this as an opportunity to kip fit, get in touch with one’s inner self and  also engage in   reading that would  help expand their knowledge.

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