Sh1bn in coins that Kenyans have ignored

For many decades coins were a preferred choice for making everyday ordinary payment transactions, especially for low-value items or charity donations.

Today, however, a lot has changed and in virtually every Kenyan home you will find coins stockpiled in jars, pouches or drawers gathering dust, disregarded and forgotten.

Society has over the years come to discredit the value of coins, driven by the perception that they are weighty and a hassle to carry around, especially considering that there are more convenient alternatives such as mobile money.

But behind this shift is a stark reality that close to Sh1 billion in the denomination of Sh1 and 50 cents now sits locked up and disused in homesteads. The latest data by the Central Bank of Kenya (CBK) shows that the value of coins out of circulation has hit Sh995 million.

Currency in circulation refers to the nominal value of all banknotes and coins held by the public and commercial banks.
In the age where nothing in the grocery list cost less than Sh5, the Sh1 coin is increasingly under threat and condemned to be purse-busting and trouser-sagging, yet useless to carry around. For these reasons, many Kenyans would rather squirrel them away or best give them away in charity and tip jars in supermarkets.

Despite being a legal tender, many traders no longer accept these coins in preference for higher value coins and notes, a trend that could eventually make the silver and copper coins obsolete.

This has led small traders to price their commodities in denominations of fives and tens, contributing to a wave of inflation that is not driven by the market demand-supply forces. Supermarkets have also become tactical in their pricing, to avoid inconveniences that come with giving change of Sh1 coin, as it is rare in circulation.

"I only use one bob to scratch airtime cards. No shop accepts them here. If an egg costs Sh12, then the shopkeeper hikes the price to Sh15," says Margaret Wangari, a resident in Kandara, Murang'a County.

In the case where a trader hikes the price of an egg by Sh3, it means Kenyans like Wangari end up losing Sh90 for every 30 eggs they purchase. If prices of other commodities such as a matchbox, salt, bread and tea leaves are increased to match the ‘preferred’ currency, then many Kenyans could be losing thousands of shillings on a monthly basis.

Inflation — a measure of changes in the cost of living year-on-year — increased to 5.90 per cent in March from 5.78 per cent in February, signaling a painful cost pinch on homes and businesses.

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