De La Rue, the UK-based global company that printed Kenyan currency, is facing a new wave of opposition over a similar contract in Somaliland.
The company downsized its operations in Kenya in June 2023 over low revenues from the business of printing money.
In Somaliland, an open letter is demanding that the company drop a contract it was awarded by the country’s government to print 380 billion SL shillings (roughly Ksh99 billion).
The letter penned by Sahamiye Foundation, associated with Worldremit founder Ismail Ahmed, sent to Kenyans.co.ke showed that the contract was valued at USD9.6 million (Ksh1.4 billion).
WorldRemit founder Ismail Ahmed.
The foundation argued that if the deal goes through, the new currency will hit the market thereby devaluing the SL shilling used in Somaliland.
In the letter, Sahamiye notes that the decision to increase the money supply in Somaliland will worsen the economic pain that low-income and disadvantaged groups of society are currently experiencing.
The Foundation warned that the new banknotes would double the money in circulation and cause the local currency to lose value against the dollar.
“The highly unusual decision to print money, especially at a time when the country is preparing for presidential elections, is predicted to cause the value of the SL shilling to drop from 8,750 to over 20,000 per dollar,” wrote Ahmed.
He further argued that there was no competitive bidding nor approval by parliament before De La Rue was awarded the contract.
“I urge you to cancel the contract and return the $9.6 million that the Central Bank of Somaliland sent you to fund the transaction,” Ahmed added.
Born and raised in Hargeisa, the capital of Somaliland, Ismail is a UK-based tech entrepreneur and founder of international money transfer service WorldRemit. He currently serves as the Chairman of WorldRemit.
De La Rue Kenya
In June, De La Rue made headlines in Kenya after it spent approximately Ksh2.7 billion to scale down its operations. The money was used to pay lawyers, fire its staff and write off its assets.
The company had been contracted by the government of Kenya to print local currency. The state owned 40 per cent of the joint agreement.
At the time, the company employed 300 people and operated under the De La Rue Kenya EPZ Limited name.
The Central Bank Of Kenya