This archive report was first published on 30 September 2019.
As of today, September 30, 2019, the Central Bank of Kenya (CBK) has announced that all old Sh1,000 notes will cease to be legal tender. This marks the end of a four-month demonetisation process that was launched on June 1, 2019.
CBK Governor Patrick Njoroge has stated that once the bank's computers are switched off at the close of business today, all unconverted bank notes will become worthless pieces of paper. Many banks have already closed their doors by 4pm, making this the actual deadline and not midnight today.
The CBK had initially targeted to collect Sh217 billion, which represents 80 per cent of all the money in circulation, but it is now clear that this target will not be met. Analysts say the success of the process will be measured after the country gets the real picture of the total money in circulation.
Despite massive awareness campaigns, Kenyans have been in no hurry to return the old notes, and most companies and retailers have not been accepting them towards the end of the grace period. Those who do not want to lose their money will have to walk into a bank or a CBK outlet to convert or risk losing it.
Mr Tony Watima, an economist, has questioned the effectiveness of demonetisation in curbing black money, stating that not all corruption income is necessarily cash income and that majority of ill-gotten cash is locked in physical assets.
