• Each time the country has woken up to a heist in one of your state institutions, there has been a common denominator.
• As soon as money hits the accounts of the suspects, it is withdrawn in record time. This means there is a lot of unbanked money is hidden under people’s mattresses.
Dear Mr President,
Let us play a game. I know your office is a serious and dignified one, but I beg your indulgence on this once.
The game is called Truth or Dare. You either answer a question truthfully, regardless of how difficult it will be, or dare to complete an audacious task. But since this might be the only opportunity in my lifetime that I will ever play any game with you, humour me once more and allow me to change the rules. There will be no choice. You will tell the truth and take the dare.
Here goes. Are you sincere in your willingness to protect our resources from plunder? On previous occasions, I have heard your commitment and resolve to fight corruption. I give you the benefit of doubt. I dare you to declare as illegal tender any Kenyan currency denomination that is above Sh100. In economic-speak we call this demonetisation. And do not announce the day or the hour of this declaration. Then give the country seven days to exchange their unbanked equivalence of the now illegal denominations in the banks. And we will be very orderly. We will form four queues as follows: One queue for those with cash up to Sh50,000; the other between Sh51,000 to Sh500,000; the other Sh500,001 to Sh1 million and finally those with more than one million. During these seven days, kindly suspend all online and mobile money transactions, and all forex exchanges.
Before you ask your Men in Black to lock me up in the looney bin and throw away the key, please hear me out: What this country needs is a system shock to reboot.
Each time the country has woken up to a heist in one of your state institutions, there has been a common denominator. As soon as money hits the accounts of the suspects, it is withdrawn in record time. This means there is a lot of unbanked money hidden under people’s mattresses.
Demonetisation will penalise hoarders of unaccounted money such as bribe takers, tax evaders and drug dealers by rendering their unbanked loot worthless.
I am sure your economic and security advisers will tell you this is a very bad idea because it will slow down our economy and cause jitters among investors. But if you recall, Sir, we rebounded after the 2007-08 post-election violence and the extended 2017 elections. So rest assured this too shall pass.
I am also aware there are litigants who will be waiting in the wings to secure court orders to stop this demonetization, claiming the public was not consulted. But Sir, when the heist was ongoing, were we consulted?
I am also very alive to the fact that we are largely a cash and M-Pesa-intensive economy. So the impact of demonetisation will be felt by the innocent mwananchi. At this point, I wish to address my fellow Kenyans.
Do you recall when matatus went on strike because Transport Minister John Michuki, now late, introduced seat belts and speed governors? We walked to work for a couple of days. We made friends with strangers along the way, lost weight, saved money and reduced air pollution and traffic congestion. We were determined. And we succeeded in ensuring the matatu industry complied with the safety regulations.
I will not lie to you. Demonetisation will be painful. It will cause a huge disruption and inconvenience in our lives. There will be long queues as people wait to redeem the illegal tender. We will encounter shortages in accessing cash for daily use. Businesses will shut down. Wage earners will lose incomes. Our lives may literally grind to a halt.
But unless we all collectively feel the pain of corruption, we will continue lamenting in the comfort of our homes and behind the keyboard: And nothing will change. We will forever sit on the bleachers being entertained by the circus of arrests, prosecutions and hospital-based remandees, as expensive lawyers secure acquittals for their clients. But what is the upside to demonetisation?
Each one of us will declare our source of wealth, identity and pin number. This would serve four purposes: One, ensure those with unaccounted money do not use other people to redeem their money for them; two Kenya Revenue Authority will triangulate our wealth with our incomes and tax returns — those unable to reconcile the three will be guests of the Directorate of Criminal Investigations. Three, hitherto unbanked cash will be taxed. This will expand the tax base and yield a windfall for the government for social and infrastructural expenditures; and four, foreigners conducting business unlawfully will be exposed.
And with the same show of unity that we demonstrated during the matatu strike, we will borrow a rendition of NASA’s operation linda polling station. Ours will be dubbed operation linda rasilmali. We will not wait for the mainstream media to cover this exercise. We will be ready with our phone cameras to film those queueing on the Sh500,000 plus and Sh1 million plus lines and share their faces on social media. This will be our genre of the Scarlet Letter. Because in this day and age of online, plastic money and M-Pesa options, unless one has something to hide, there is no reason anyone would keep such amounts under their mattress.
Finally Mr President, should you accept the dare, you will be in good company. India Prime Minister Narendra Modi took the same drastic measures two years ago. He recovered 97 per cent of the demonetised notes, which translated to $235 billion unbanked money and grew his tax base by 25 per cent.
This structural reform measure to combat the pervasive corruption, tax fraud, drug and counterfeit money in this country, will propel your noble Big 4 agenda.
So Mr President, what do you say? Truth and Dare?
“Daring ideas are like chessmen moved forward. They may be beaten, but they may start a winning game.” ― Johann Wolfgang von Goethe
Mugwe is a political economist