Paul Abour, the Member of Parliament for Rongo, has put forth a Bill aiming to make the hoarding of U.S. dollars an offense, with the intent of tackling the persistent depreciation of the Kenyan shilling against the American currency.
The Bill, titled The Forex Hoarding Criminalization Act 2023, aims to regulate both the amount of dollars that individuals and entities can acquire and the duration they can retain the currency.
MP Abour proposes that the National Treasury would be mandated to establish regulations specifying the permissible quantity of dollars an individual can purchase and the duration for which they can possess that currency before being considered as hoarding. Any violation of these regulations could result in legal consequences.
“We can’t afford the luxury of people buying dollars and keeping them in their houses for speculation purposes. Even if you have the freedom to buy and sell as you wish, you can’t do it to the detriment of the common mwananchi,” said the lawmaker.
The Forex Hoarding Criminalisation Bill, 2023, proposes that individuals pay up to 15 percent of the value of dollars held in their possession beyond a permissible period of 45 days.
Abour alleges that affluent Kenyans have been accumulating U.S. currency since the 2022 General Elections. He cites Central Bank of Kenya statistics indicating that domestic financial institutions are also holding Ksh. 1.2 trillion in dollars.
“We are not saying that you shouldn’t be allowed to buy dollars. If you do buy them, you must use them within a specified period. If you don’t, you should either convert the cash into Kenyan shillings, use it to import products, or pay a 15% tax, on the amount being held, to the government,” he proposes.
If assented to, The Forex Hoarding Criminalization Act 2023 would also include provisions for compensating whistleblowers who report cases of dollar hoarding.
“If you might be having information where someone is hiding dollars for speculation purposes and you report to the authorities, you will be entitled to 10% of the money being hoarded,” Abour says.
The Bill also proposes a 90-day amnesty period during which individuals with dollars in their accounts or homes can convert the currency into Kenyan shillings. Failure to do so within this period could result in a 15% tax on the amount being held.
“We cannot continue to be helpless and just watch the Kenyan Shillings slide against the US dollar without taking action,” Abuor said.
According to the proposal, individuals found holding foreign currency beyond 45 days could face a fine of not exceeding Sh1 million or a jail term of up to 10 years.
Entities, on the other hand, may be subject to a fine of Sh10 million or the revocation of their licenses.
