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Canny ways that Kenyans are swapping old notes

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Last week a man walked into a Nairobi car yard and paid for a luxury Mercedes with a mountain of Sh1,000 banknotes, desperate to offload cash that within days would be worthless.

With a deadline looming before the Central Bank of Kenya bans all old edition Sh1,000 notes, big fish with their fortunes stashed in cash are under pressure to find ways to jettison their money.

A new print of the Sh1,000 banknote, the largest denomination, was rolled out in June, with Kenyans given to September 30 to exchange their old bills at the bank or be stuck with bundles of useless cash.

The operation is aimed at flushing out dirty money being hoarded by tax evaders, crooked businessmen and criminal groups.

Large deposits of the old notes, embossed with the image of Kenya’s founding father Jomo Kenyatta, raise alarm bells at banks and require paperwork to prove their origin.

The central bank in June said there were roughly 218 million Sh1,000 notes in circulation, but declined to say what proportion was being stashed as black money.

Kenyan economist Aly-Khan Satchu said devaluing these bills works by “taking its owners by surprise”.

“Four months is a short period of time when you want to launder big sums of money,” he said.

“People who have that money will definitely try to save what they can”.

So people are getting creative, devising schemes to quickly unload small amounts of their cash while avoiding detection by the authorities.

John, a car dealer in Nairobi, recalled his customer last week counting out thousands upon thousands of banknotes to purchase a luxury car worth Sh7.4 million.

“People want to get rid of their old notes, but they know very well that questions will be asked if they go put the money themselves in the bank,” said John, who declined to offer his real name due to the nature of his business.

“When I go to the bank to deposit money from a car sale, people ask for the papers from the sale, sometimes even copies of emails, but it never goes further.”

Other businesses are finding a lucrative side trade in washing Sh1,000 notes through their tills — for a bit in return.

“I was approached by a friend through another friend and we struck a deal. I get around Sh500,000 every day to bank together with my daily sales,” said a liquor shop owner who declined to be named in Hurlingham, a district near downtown Nairobi.

“In return I get between five and 10 percent, depending on the amount.”

The amounts being deposited are below one million shillings, the threshold at which banks required detailed paperwork under a new transparency policy imposed by the central bank in June 2018.

One canny businessman in western Kenya dished out his cash in the form of small, interest-free loans of around Sh50,000.

The amounts are low, so those exchanging the old bills avoid detection, and upon returning the debt his money is cleaned into new bills.

“Nothing is written down, it is a gentleman’s agreement,” he said, declining to be named.

Other methods involve sinking cash into real estate or investment funds, or businesses moving large volumes of money, several businesspeople said.

But it’s not all underhanded and hush-hush.

One bar in the coastal city of Mombasa is offering to swap banknotes on behalf of drinkers, encouraging punters to spend big at their “Old Notes Send Off Party” being held the eve of demonetisation.

by nation.co.ke


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Business

VIDEO: Optiven CEO opens up about growing up in abject poverty, doing laundry for fellow students

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George Wachiuri, the CEO of Optiven Limited, has opened up about a side of him few people know about. Despite having built a multi-billion Shilling Real Estate Company and becoming one of the most recognisable names in the field, Wachiuri has remained a humble servant, who says he views his customers as associates and greatly respects and values his work mates. 

In an interview with Jeremy Damaris of Kenya Diaspora Media, he tells of how he struggled, lost money and friends, before rebounding “by the grace of God.”

A Certified Public Accountant – CPA (K) and is a former Lecturer at Daystar University, his entrepreneurial spirit developed early, and was awarded the Entreprenuer of the year 1997 by the University of Nairobi.

He is currently a PhD candidate at the Jomo Kenyatta University of Agriculture and Technology.

He holds a Masters’s degree in Business Administration (University of Nairobi), and a Bachelor of Commerce (Marketing option) Degree from University of Nairobi.

Watch as he tells his amazing story in Gīkūyū


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Lifestyle

‘Kikambala hotel bombing in 2002 changed our lives’

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The scars on Mercy Neema Mwagambo’s body are a stark reminder of what happened at Paradise Beach Hotel in Kikambala 18 years ago.

On November 28, 2002, a two-pronged terrorist attack hit an Israeli-owned hotel but missed a plane belonging to Arkia Airlines.

A vehicle crashed through a barrier outside the hotel on the Kilifi-Mombasa highway and blew up, killing 17 people and injuring 80 others.

Every year today, Neema and 13 victims of the attack and their families converge at the deserted hotel to pray for the souls of their departed relatives.

However, today could be the last annual ritual as the owner has put the hotel for sale.

Annual ritual

For Neema and other victims, it’s not clear if the prospective buyer would allow them to continue with this annual ritual.

It is an attack that left villages of Musumarini in Kilifi County destitute, negatively affected Israelis’ investments at the Coast and damaged the tourism sector.

“I am trying to sell this property even at a throwaway price,” said Yehuda Sulami, an Israeli, on phone from Tel Aviv, although he did not reveal the price.

Sulami claims that after the attack, there were efforts to push him out of business.

The former special forces officer said he had no money to compensate victims of the attack.

“I’ve faced an avalanche of litigation on compensation. There was no insurance cover on terrorism,” said Sulami.

It is the first time has spoken publicly on the matter.

He said while he sympathised with those who lost their loved ones or suffered injuries, he lost his lifetime investment and close friends and “there was no one to comfort me.”

Among the 17 who perished were 14 Kenyans and three Israelis. The deserted hotel is arguably the only remaining mark of Israel investment in Coast.

Prior to the attack, over 100,000 tourists from Israel had made Mombasa and Kenyan Coast their second home away from home.

“Arkia Airline used to bring in between 250-270 guests per flight. It had operated Mombasa route for close to seven years before the attempted missile attack,” said Sulami.

After the attack, the airline stopped flying the route and Israel investments at the Coast started dwindling.

Sulami claimed that what followed was a number of litigation and attempts to force them to close down the hotel.

“We became the target yet the Kenyan government had promised to assist the affected persons,” said Sulami, without providing any evidence of the alleged persecution.

The victims of the attack narrated to the Saturday Standard on how they were neglected by the Government and the owner of the hotel.

For instance, Neema cannot walk as her legs were seriously injured. She was working at the front office at the hotel.

On that fateful day, she was helping a guest check in as her colleagues were overwhelmed by the number of tourists.

“Had I remained inside the hotel at my work station, may be I would not have been injured this way,” said Neema.

November is a peak season for the tourism sector in Coast. On that day, as a group of 230 guests were leaving the hotel, another 250 tourists were checking in. All the guests were Israelis.

“I reported early for duty on that fateful day and was looking forward to a rather busy day since we had huge check in and check out for guests,” she said in an interview.

At the gate, a troupe of Girima dancers were doing their jig to bid goodbye to outgoing guests and welcome the incoming ones.

Most of the incoming tourists had already been ushered in to the waiting lounge at the reception but a small group had joined the traditional dancers.

“What followed was a huge bang followed by fire all over the Makuti-thatched hotel,” Neema said, adding that she found herself on the ground.

Neema could not walk so she crawled to the swimming pool. She had suffered serious burns allover her body and decided to jump into the swimming pool to cool herself.

“I was taken to hospital in Mombasa and later airlifted by a military aircraft to Israel for specialised treatment at Jerusalem Hospital. I spent four weeks receiving treatment for my broken legs and burnt face and back,” she said.

The Kikambala bombing incident also robbed the family of Mufidha Mohamed of its breadwinner, Wildred Oyaro Owuor, who used to operate a taxi business at the hotel.

“My husband suffered a ruptured stomach. He died 21 days after he was admitted at Pandya Hospital,” Mufidha says. She was breastfeeding Zaki, their last born now 18 years, when the attack happened.

She said with the death of her husband, she was left as the sole breadwinner to fend for her five children.

“It has not been easy for us all. I have tried to venture into business with very little success,” she said.

Today Mufidha, her children and a few other survivors will converge at the blast site to hold prayers and commemorate those who died.

“Today we shall go to the hotel which has now closed down to hold prayers. It is a ritual I’ll do until I meet him in the next life,” says Mufidha.

Dr Sam Ikwaye, Kenya Association of Hotelkeepers and Caterers (Kahc) Coast branch executive officer, says the events of the fateful day have had a long impact on Kenyan tourism.

Travel advisories

Dr Ikwaye says it is after the Kikambala bombing that key foreign tourists source markets started issuing travel advisories against Mombasa and the Coast region.

“This was the start of a very bad beginning for Kenyan tourism,” Ikwaye said.

He explained the Kikambala bombing marked the first time the industry experienced serious external shocks and has never fully recovered.

“Neighbouring nations too and the world experienced our pain years after we had suffered and today terrorism has been recognised as a threat not just synonmous with Kenya, but the world over,” he said.

Kilifi Senator Stewart Madzayo said it is unfortunate that no compensation was made to those who suffered the brunt of the terror attack.

“Both the national and county governments should be compelled to assist surviving families. This will not take away completely the suffering they have endured but will offer some sort of comfort to those affected,” said Justice (rtd) Madzayo.

by Standardmedia.co.ke


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Entertainment

‘We had invested…’ Churchill reveals how the pandemic has hit him

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Comedian Churchill says just like any other business, coronavirus has hit him too.

Churchill, real name Daniel Ndambuki has been doing ‘The Journey Series’ on his TV show which is originally a stand-up comedy show that attracts thousands of viewers.

Speaking to Mpasho, Churchill revealed;

“We had invested quite some amount in the production of the show. And now, you can’t use that gear, you have to put all that aside. You cannot set up something so big for like 200 people, that is loss-making. It almost takes us to where we began. We remain positive though”

Adding;

“I am happy with all that is happening from all other comedians.”

Churchill said this after the launch of TuKo App, which he is the brand ambassador.

Churchill Photo By Charlene Malwa

by Mpasho.co.ke


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