Chachanomics 101: Impact of Demonetisation Deadline 31st Oct 2019

As celebrated the Mashujaa Day, one of the important milestones worth noting is the demonetisation exercise that saw the replacement of the old generation currency with new ones, the Building Bridges Initiative whose contents are in the public limelight among others.

On demonetisation, it is over one month since the old generation of Kshs. 1,000 notes were rendered invalid, illegal and useless. That is not news now. However, the CBK governor was on record saying that about 7.4 billion shillings were not returned (7.4 pieces of the old Kshs. 1,000 notes). One wonders where the money disappeared to.

It is rumoured that drug barons and looters of state coffers may have gotten insider knowledge and traded the money with foreign currency. Some may have decided not to exchange huge sums of cash stacked in sacks in some people’s houses lest they risk being investigated and arrested. The third case scenario is about the numerous stories of people who forgot to return the money stored in their mattresses or hidden somewhere.

There was an intriguing story of a retiree in Siaya who misunderstood the import of the deadline and/or forgot to replace the Kshs. 500,000 he had withdrawn in June 2019. After the deadline, it dawned on him that he had become a “rich pauper.” His dream of salvaging his transport business came a cropper. How sad!

The second disappointing case was that of the K24 news anchor, Mr. Ahmed Bhali, who has had an impressive habit of saving about one thousand shillings per month in myriad denominations. This man discovered after the expiry of the September 30^th deadline that he forgot to open his small savings bank at home and return the Kshs. 1,000 old currency. From January to 4^th October, 2019 he had saved Kshs. 15,200 out of which a whooping Kshs. 14,000 was in the out-dated currency. How unfortunate!

There are many trending other stories of many from pastoralist communities who rushed after the deadline to exchange the old currency. They either did not hear the CBK announcement or they heard but did not take it seriously.

On the Mashujaa day, interestingly I too was caught up in the embarrassing scenario. I discovered that I had forgotten to return the church money belonging to (a catholic student association) under my custody after a fundraiser in February. I had initially insisted that the officials should open a bank account for depositing the money but that did not happen as they went for a long holiday till September.

The good thing is that most of the money had been used to buy musical instruments and I remained with a balance of about Kshs. 23,000. Out of these, I stumbled upon Kshs. 5,000 of the “useless” old currency notes. This was a big shocker to me because I had wondered previously how people in their normal senses could hoard money yet forget to return it before the stated date. I had even called my parents to remind them of the deadline not knowing that I would fall victim.

These case studies foreground the myths and beliefs associated with money that makes us behave in certain strange ways. Unless such beliefs are deconstructed and replaced with new ones, we will have a love – hate relationship with money. Something to be kept safely under a mattress to forestall theft, any other forms of mischief and the fear not to misuse it. This reminds me of a quote by Billy Graham, “If a person gets his attitude toward money straight, it will help straighten out almost every other area in his life.”

What are your beliefs toward money? Food for thought!

 

Blessings.

Chacha N.B.