Much more Cash in circulation in Kenya with the COVID-19 crisis

The value of cash circulating outside the banking system rebounded in February to a record high of Sh231.37 billion on increased recovery optimism at the start of the year.

Fresh data by the Central Bank of Kenya (CBK) shows that the value of currency outside the banking system — which is an indicator of the prevailing economic activity — has continued to defy Covid-19 economic hardships to grow by two percent in February from Sh226.7 billion in January.

This growth has, however, failed to better the lives of most Kenyans who have been ravaged by the economic fallout of the pandemic.

A recent survey by the Kenya National Bureau of Statistics (KNBS) reported that 1.72 million adult Kenyans were jobless and actively seeking a Job as at the end of September last year, with most of them having been laid off in the pandemic-ravaged year.

With the unemployment rate at 7.2 percent in September, many Kenyans have been battered by the disease, leaving them struggling to pay rent, afford a meal or meet their daily needs. This has revealed a paradox where cash in circulation continues to rise.

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The cashless society from an ethical point of view

The debate about the move towards a cashless society has been at the center of the scene for several years, now. Various angles have been taken by economists, politicians, banking institutions and sociologists. Beyond the technicalities of the debate, lies the question of freedom, of inter-citizen solidarity and of governmental responsibility. The debate cannot remain in the hands of financial specialists, it is first and foremost an ethical, political and societal issue.

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