Central Organization of Trade Unions (COTU) Secretary General Francis Atwoli has joined a beeline of individuals rattled by the new Forex Hoarding Criminalization Act 2023 bill.
The bill, presented by Rongo MP Paul Abour, proposes stringent regulations on the storage of dollars. According to the proposal, Kenyans will be prohibited from holding dollars for more than 45 days.
Those who violate the law will face a hefty fine of Ksh1 million or imprisonment for up to 10 years. Entities might be required to pay even steeper penalties, potentially reaching Ksh10 million.
In the forex industry, the bill has been seen as an affront to free trade and targeting wealthy persons who have made their wealth through foreign exchange.
Atwoli, in a statement, termed the bill a retrogressive, repressive, and archaic piece of legislation that runs counter to the principles of economic progress and investor-friendly policies that will affect job creation and the freedom of workers.
"COTU (K) firmly believes that Kenya has evolved beyond the era where individuals were required to declare their currencies when traveling in and out of the country," read the statement in part.
"The proposed Forex Hoarding Bill, 2023, if passed, would be a step backward, reminiscent of colonial-era practices that stifled individual freedoms and intimidated investment in the country."
The Secretary-General argued that Kenya has made significant strides in its economic development and international trade relations and urged the legislators to develop laws that will boost Kenyan companies, instead of taking them backward.
"COTU (K) believes that punitive measures like those proposed in the Forex Hoarding Bill, 2023, are detrimental to investor confidence. Such measures discourage individuals and businesses from participating in international trade and currency exchange," added the statement
"In today's globalised world, it is essential that we encourage the free flow of capital and support an open, flexible, and investor-friendly regulatory environment."
The bill also sought to control the amount of dollars that Kenyans can purchase and hold within a 45-day period.
The lawmaker argued that wealthy individuals have been hoarding the currency since the 2022 General Election despite the country experiencing acute shortage of dollars. The MP also observed that banks were sitting on Ksh1.2 trillion worth of the currency.
“We can’t afford the luxury of people buying dollars and keeping them in their houses for speculation purposes. Even if you have the freedom to buy and sell as you wish, you can’t do it to the detriment of the common mwananchi (citizens)," he stated.
“We are not saying that you shouldn't be allowed to buy dollars. If you do buy them, you must use them within a specified period. If you don't you should either convert the cash into Kenyan shillings, use it to import products or pay a 15% tax, on the amount being held, to the government."
The Bill also proposes that individuals who help expose those hoarding the dollars should be entitled to 10 per cent of the recovered amount.
