How much does Kenya’s money cost to produce?

Kenya’s Revised Constitution 2010 Section 231(4) states:

“Notes and coins issued by the Central Bank of Kenya may bear images that depict or symbolize Kenya or an aspect of Kenya but may not bear the portrait of any individual.

Kenya’s Currency Notes and Coins.

Kenya’s currency notes and coins have historical have the faces of former Presidents (Jomo Kenyatta, Daniel Moi and Mwai Kibaki) and thus compliance with this constitutional requirement will be a large scale attempt to replace all currency notes and coins in circulation. Kenya has notes of 5 denominations (KES 1000, KES 500, KES 200, KES 100 and KES 50) and 5 coins (KES 40, KES 20, KES 10, KES 5 and KES 1) in circulation. A replacement drive might choose to retain these denominations or do away with them entirely. The 40th year of independence was marked by releasing the KES 40 coin which is unlikely to be replaced in the push for demonetization.

Notes have shorter lifespans of up to 2 years unlike coins whose lifespans extend to 25 years. Unsurprisingly, notes of comparatively lower value i.e KES 100 and KES 50 have one year life spans unlike those of comparatively higher values i.e KES 1000, KES 500 and KES 200 that have 2 year lifespans. It follows that notes have to be replaced quite regularly depending on their individual lifespans therefore Central Bank of Kenya engages in regular currency production which former Governor Prof Njunguna Ndungu reported costs ₤ 28.62 to print 1000 pieces of notes on a short term contract. This was in 2012 when he appeared before the Public Accounts Committee. Historically, Kenya’s currency notes and coins have been printed by De La Rue who quoted the tabulated costs in a 2006 winning bid for the tender to print Kenya’s currency on a 3 year term.

Indian rates estimates used for comparison are from this article about a response to a freedom of information request by the government of India.

It is noteworthy that demonetization would not be instant (as has been seen to be quite messy in India) but would be carried out in phases as proposed by Kenya’s Central Bank’s to take 3 years. Ultimately, all non commemorative notes and coins in circulation will be replaced, a very complicated operation as the amount of money in circulation has grown three fold between 2006 when there was KES 76 billion in circulation (KES 73 billion as notes and KES 3 billion as coins) to KES 234.96 billion (KES 227.4 as notes and KES 7.557 as coins) in 2016.


Cost of Demonitization

Central Bank’s financial statements report annual currency production costs of KES 1.7 Billion, a demonstration of not just the costs of money but also the channels for demonetization that is expected to kick off in September 2017. Similarly, this annual bill implies that the date printed on currency notes and coins might be a date of design and not production.

Central Bank Governor Dr. Patrick Njoroge has been on record saying that the new notes compliant with the new constitution will cost KES 18 billion.

It is not advisable to issue new currencies towards an election. It can cause disruption and poor acceptance of the new currency,” Dr. Njoroge.

This is a clear indication of the byzantine business of demonetization as Central Bank is very likely to continue to foot an annual bill of KES 1.7 Billion for currency production. There are all indications of increased security on the new notes as has been adopted by India whose recent demonetization experiment continue to divide opinions. Granted India’s notes have historically been larger than Kenyan ones and cost more to print.

Furthermore, India’s currency in circulation of KES 22 trillion (14,269 Lakh Crore) dwarfs Kenya’s KES 234 billion which might imply the annual bill of currency production per note is much higher in Kenya.

Estimates on the costs of currency notes production based on 2015 money in circulation comes close to the KES 1.7 Billion as reported in Central Bank’s financial statements which implies Kenya might be getting rates similar to those reported by India and not those quoted in De La Rue’s 2006 bid.

Unfortunately, there is no public resource on the costs of minting coins.

Coins cost more to make

According to a time magazine article, the US spends upto 50% more than the value of each penny it makes. Similarly, BBC reports that it costs upto 4 times to mint a Euro coin of an equivalent value. However, unlike the Euro and the penny, Kenyan coins are made of copper plated steel (they are magnetic unlike copper and silver) which costs much lower than coins made of copper or silver.

A good estimate for the costs of coin production comes from India where it is reported that minting a 10 rupee coin costs 6.10 rupees (KES 9.76). The table below is thus generated from assuming it costs KES 9.76 to mint KES 5, KES 10, KES 20 and KES 40 coins as they have very similar designs to the 10 rupee coin. It further compares this to the costs were each coin cost it’s value to mint.

This increases the total costs of currency production to KES 10 billion (KES 7.5 Billion to mint coins and KES 1.7 Billion to print notes) using the total currency in circulation in 2015 as a reference.


It therefore shows that Dr. Njoroge’s estimate might have been the cost demonetization under a short period. Furthermore, it shows that Kenya is more likely to continue spending KES 1.7 billion annually in currency production.

Finally, Kenya’s Central Bank might be spending more to produce certain coins than their actual value just like its peers in the US and European Union.

Fun Fact:

Ark, A Kenyan design company has proposed the following symbol for the Kenya Shilling.