This archive report was first published on 25 September 2019.
On September 25, 2019, President Kenyatta made a bold move to combat corruption by demonetising all 1000-shilling bills. This decision is a crucial step in the war against graft, which has plagued Kenya for far too long.
The use of cash has been a cornerstone of economic development, allowing for high-volume trade and the growth of modern capitalism. However, the anonymity of cash has also made it an attractive tool for criminals, who exploit the system for their illicit dealings.
By demonetising the 1000-shilling bills, President Kenyatta has effectively cut off a key source of funding for these criminal activities. Honest citizens have nothing to fear, as they can exchange their old bills for new ones before the end of the month. On the other hand, criminals who have been hoarding millions of shillings in warehouses are now faced with a difficult decision: declare their source of income and pay taxes, or lose the entire value of the money.
This move is not unique, as Prime Minister Narendra Modi of India took a similar step in 2016 to fight the black market and terrorist activity. The results were significant, with tax revenues jumping after the reform.
President Kenyatta's strategy in fighting corruption is well thought out and effective. He has put his most trusted and effective soldiers in key positions, such as Noordin Haji as Director of Public Prosecution and Dr Fred Matiang'i in charge of the Ministry of the Interior. As they start working, he slowly but surely pulls the loop tighter around the criminals' necks by passing one reform after another.
It is essential to see the bigger picture and understand why a certain policy is put in place. In this case, President Kenyatta's decision to demonetise the 1000-shilling bills is a significant boost in the war against graft. I, for one, am looking forward to bidding the old 1000 shilling bills farewell!
— Michael Mugwang'a is a communications consultant based in Nairobi. Twitter: @Mikeysoul
