The Central Bank of Kenya (CBK) is under scrutiny after an internal audit flagged procedural lapses in its Ksh14.5 billion currency printing contract with a foreign company.
The contract was awarded through a classified procurement route, raising concerns over adherence to legal frameworks and oversight gaps.
According to the audit report by the Auditor General, CBK signed the contract on April 22, 2024, under the classified procurement method governed by Section 90 of the Public Procurement and Asset Disposal Act, 2015.
The bank had obtained prior clearance from the Treasury Cabinet Secretary in January 2024. However, auditors found that CBK failed to meet key requirements set out in Regulation 84 of the Public Procurement and Asset Disposal Regulations, 2020.
Specifically, CBK did not conduct proper supplier identification and assessment before selecting the foreign contractor. The audit noted that no special procurement committee was formed, despite it being mandatory for sourcing classified goods and services.
Furthermore, the Director-General of the Public Procurement Regulatory Authority (PPRA) did not monitor the transaction, as required under Section 9(1)(d) of the Act.
“Audit review of the procurement process revealed that the internal processes before the procurement were not followed in compliance with Regulation 84 of the Public Procurement and Asset Disposal Regulations, 2020 on the identification and assessment of the suitable currency supplier,” the report stated.
“The appointment of a special committee to handle the procurement of classified items, or the requirement for monitoring by the Director-General of Public Procurement Regulatory Authority in accordance with Section 9(1)(d) of the Act, among other requirements under Regulation 84, were also not met,” the report added.
Despite these concerns, the Auditor-General’s broader review concluded that CBK’s internal controls, risk management, and governance systems were effective in all material respects. The audit, conducted under ISSAI 4000 and related standards, affirmed the bank’s overall governance structure as compliant.
The audit’s purpose was to verify whether CBK's financial activities and regulatory compliance aligned with governing authorities, following the standards of the Public Audit Act, 2015, and ISSAI 2315 and 2330. While the controls passed the test, this particular high-value contract revealed weaknesses in procurement compliance rather than a systemic governance failure.
CBK officials have yet to publicly respond to the audit findings. Meanwhile, the Treasury and PPRA are likely to come under pressure to explain why the contract proceeded without adherence to key regulatory steps, despite having granted initial clearance.
However, CBK Governor, Dr Kamau Thugge, had revealed in August 2024 that the government had contracted a German firm to print its currency, without revealing its identity.
"The printing is being done by a German firm, and it is actually one of the best firms," the governor stated in a press briefing.
On June 2, Nelson Amenya, popularly known for exposing the Adani-JKIA deal, dropped a bombshell on an alleged clandestine redesign of the Kenyan currency barely a year after the upgrade of security features on the money.
Amenya claimed that the government had changed the design of the currency and had already embarked on mass printing of the new currency in Germany without informing the public.
