Rongo Member of Parliament (MP) Paul Abour has introduced a proposed legislation with the aim of making it illegal to stockpile U.S. dollars in an effort to combat the ongoing devaluation of the Kenyan shilling against the American currency.
The proposed law, known as the 2023 Forex Hoarding Criminalization Act, aims to regulate both the amount of U.S. dollars that Kenyan citizens can acquire and the duration they can retain this currency.
According to the bill, the National Treasury will be tasked with creating regulations specifying the permissible quantity of U.S. dollars an individual can purchase and the maximum duration for which they can hold onto these funds before being considered hoarders, subject to legal penalties.
Paul Abour stated, “We cannot afford to have people buying U.S. dollars and keeping them in their homes for speculative purposes. Even though individuals have the freedom to buy and sell as they wish, they cannot do so to the detriment of the average citizen.”
The legislator alleges that affluent Kenyan citizens have been accumulating U.S. currency since the 2022 General Elections. He also cited statistics from the Central Bank of Kenya, indicating that local financial institutions are holding Ksh.1.2 trillion in U.S. dollars.
Abour clarified, “We are not prohibiting the purchase of U.S. dollars. However, if you do acquire them, you must utilize them within a specified timeframe. Failure to do so will require you to either convert the funds into Kenyan shillings, use them for importing goods, or pay a 15% tax on the amount held to the government.”
The bill also includes provisions for compensating whistleblowers who report instances of hoarding U.S. dollars. Abour added, “If you possess information regarding someone stockpiling dollars for speculative purposes and you report it to the authorities, you will be eligible to receive 10% of the hoarded amount.”
Should the bill become law, it offers a 90-day grace period for individuals with U.S. dollars in their accounts or homes to convert the currency into Kenyan shillings to avoid incurring a 15% tax on the amount held.