Kenyans rush to swap banknotes as cash ban looms

Kenyans were given to September 30 to exchange their old bills at the bank or be stuck with bundles of useless cash. (AFP)
Updated 27 September 2019

Kenyans rush to swap banknotes as cash ban looms

  • People with their fortunes stashed in cash are under pressure to find ways to jettison their money
  • ‘Four months is a short period of time when you want to launder big sums of money’

NAIROBI: Last week a man walked into a Nairobi car yard and paid for a luxury Mercedes with a mountain of 1,000-shilling ($10) 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 1,000-shilling notes, big fish with their fortunes stashed in cash are under pressure to find ways to jettison their money.
A new print of the 1,000-shilling 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 1,000-shilling 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 $74,000.
“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 1,000-shilling 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 500,000 shillings 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 50,000 shillings.
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 demonetization.


Indonesia begins human trials of anti-virus vaccine

Updated 33 min 28 sec ago

Indonesia begins human trials of anti-virus vaccine

  • The third phase of the clinical trials of the vaccine — which is manufactured by China’s Sinovac Biotech in collaboration with its Indonesian pharma counterpart, Bio Farma — began on Tuesday
  • The third phase is a must before the vaccine, known as CoronaVac, goes into the production stage and is a prerequisite for all pharmaceutical products, including medicines and vaccines

JAKARTA: Indonesia is stepping up efforts to find a COVID-19 vaccine by launching human trials of a potentially effective drug amid criticism of its lacklustre handling of the pandemic and concerns about its plummeting economy.

The third phase of the clinical trials of the vaccine — which is manufactured by China’s Sinovac Biotech in collaboration with its Indonesian pharma counterpart, Bio Farma — began on Tuesday and is being conducted by the Padjadjaran University School of Medicine at six locations in Bandung, West Java province, where the university and the state-owned pharma company are based.

“The first day of the trial went well, with 20 volunteers in each of the six locations injected with the potential vaccine. We have no complaints so far, and we are preparing the second injection batch on Aug 14,” Iwan Setiawan, a spokesman for Bio Farma, told Arab News on Wednesday.

He added that the six-month trial would require the participation of 1,620 volunteers who were “in good health and had not tested positive” for the disease.

Ridwan Kamil, governor of West Java, Indonesia’s most populated province, is among the volunteers who have signed up for the trial.

The third phase is a must before the vaccine, known as CoronaVac, goes into the production stage and is a prerequisite for all pharmaceutical products, including medicines and vaccines.

“The potential vaccine had gone through three trials; the pre-clinical, the clinical trial first phase and the second phase in China,” Bio Farma CEO Honesti Basyir said in a statement.

According to Basyir, Sinovac is one of the few institutions that have progressed to the third phase of the clinical trial from among hundreds of research institutions around the world that are developing the COVID-19 vaccine.

According to Oxford Business Group’s COVID-10 Economic Impact Assessment, there are more than 150 different vaccines that international researchers are working on. However, only 26 have reached the human trial stage so far.

Once the trials are concluded, Bio Farma will register the vaccine with the Food and Drug Supervisory Agency so that it can begin mass-production of the drug.

“We have prepared a production facility for the COVID-19 vaccine with a maximum capacity of 100 million dosages, and by the end of December this year we will have an increased production capacity to produce an additional 150 million dosages,” Basyir said.

President Joko Widodo oversaw the first injections to the batch of volunteers in one of the six locations and also toured Bio Farma’s production facility. 

“We hope this clinical trial would conclude in six months and so we can start producing the vaccine in January and vaccinate our people soon,” Widodo said.

State-Owned Enterprise Minister Erick Thohir, who is also the head of the COVID-19 mitigation and national economic recovery committee, said that Bio Farma was a well-established vaccine producer whose products were halal-compliant and used in 150 countries, including in the Middle East.

The collaboration with Sinovac is one of three vaccine-development projects that Indonesia is engaging in with foreign parties as it grapples with a surge in infections. At the same time, social restrictions and economic activities were eased. The other two projects are with South Korea’s Genexine and Norway’s Coalition for Epidemic, Preparedness and Innovation.

As of Wednesday, Indonesia had reported 130,718 infections with 1,942 new cases, 85,798 recoveries and 5,903 deaths, although experts suggest that the numbers could be higher due to the country’s low testing capacity.

Cases also surged in the capital Jakarta with workplaces emerging as the new infection clusters after thousands of employees returned to work recently.