njuguna ndung ’ u : combating money laundering and the financing of terrorism address by prof njuguna ndung ’ u, governor of the central bank of kenya, at the cocktail to usher in the eastern and southern africa anti - money laundering group ( esaamlg ) 16th taskforce meeting of senior officials, mombasa, 18 august 2008. * * * mr. serwalo tumelo, permanent secretary, ministry of finance and development planning, botswana and chairman of the task force of senior officials ; permanent secretaries here present ; dr. eliawony kisanga, executive secretary, esaamlg ; representatives of co - operating nations and organisations ; members of the esaamlg taskforce of senior officials ; distinguished guests ; ladies and gentlemen : it is my joy and pleasure to be here this evening on the occasion of the official opening of the 16th esaamlg taskforce of senior officials meeting. i must start by extending a very warm welcome to all the delegates here present. it is indeed an honour for kenya to be hosting this important meeting. we appreciate the hosting of the esaamlg meeting in kenya even after the period of turbulence that we underwent at the beginning of the year. however, this is now behind us and we are back in business. as the swahili say, “ kuteleza sio kuanguka ” ( to slip is not to fall ). anti money laundering and combating the financing of terrorism are indeed current buzz words in the global financial circles. forums such as this therefore serve as useful avenues of sharing various country experiences. for the case of kenya, the timing of this meeting could not be more opportune. the proceeds of crime and anti - money laundering bill, 2008 is currently under consideration by our parliament. we remain cognisant that kenya ’ s vision of being a regional trade and financial services hub is founded on the enactment of an enabling legal and regulatory framework. a sound anti - money laundering legal and regulatory regime is therefore a critical plank to this aspiration. ladies and gentlemen : the region is vulnerable to money laundering particularly given its mainly cash based economies. this is further aggravated by porous borders and weak institutions for enforcements. though much has been done in the recent past by organizations such as esaamlg, more remains to be done. the challenges we face are multifaceted, but as the region has demonstrated through the support member countries have given to esa

and from the existing central bank branches. this move is also expected to support the provision of “ clean ” notes and coins to kenyans across the country. in conjunction with kba, cbk identified nyeri, meru and nakuru as the appropriate towns to pilot currency centres. the nyeri currency centre is already operational and progress towards establishing the nakuru currency centre are at advanced stages. we expect the nakuru currency centre to commence operations by end of july 2010. this centre will be housed by kcb. besides benefitting nakuru residents by getting clean notes and coins, it is expected that the costs saved by banks from the lower transportation costs will translate to better, cost effective and efficient services to the customers. i must emphasize that the centres are a joint partnership between the central bank and commercial banks via kba. the centres should therefore not be confused with the central bank ’ s operated branches. in the case of currency centers, commercial banks provide the physical infrastructure while cbk provides the necessary human and technical support necessary. in the long run, the cbk will leave currency distribution to be handled by commercial banks. finally, let me touch on three issues that featured in the budget and i think they are critical to our discussions today : the revamping of investment in infrastructure – complement private investment – public investment to reduce cost of doing business – residue binging constraints empowering the youth to secure a future sme support through a revolving fund operated by bank on a 1 to 5 basis : that is, at the minimum this revolving fund will operate on “ for each 1 shilling the government brings, banks will contribute 5 shillings ” ladies and gentlemen : as i wind down my remarks, i urge all businesses in nakuru to take advantage of the current trend of falling interest rates to fully exploit the potential of your businesses. the capacity of kenyan banks to extend credit to all types of businesses has been increased following the increase in the statutory minimum core capital from ksh. 250 million to ksh. 1 billion. the increase took effect from 1st january 2009 and will progressively be increased to ksh. 1 billion by 31st december 2012. the increase was informed by the increasing demand for funding from the banks beyond what they could accommodate based on their capital levels. i also take this opportunity to urge all of you to exercise your rights while engaging with the banks. you must demand to be charged a fair interest rate commensurate to your businesses risk profile investment proposals. this is the only way