Kenyan markets: Barter trade an illegal practice in Kenya

When Will Ruddick introduced Bangla-Pesa back in May 2013, his intentions were for the best of Bangladesh residents in Mombasa.

Bangla-Pesa only restricted to the slum acted as a voucher for trade. This allowed for circulation control of the alternative currency that saw business people exchange goods for services and vice versa.

Practically, business men and women would evade product backlog and waste by acquiring a basic service in exchange. For Example, a motorcycle taxi driver may have the capacity for 20 trips a day but only takes five. At the same time, a fish vendor throws out 20 percent of her stock. With Bangla-Pesa, the fish vendor can buy a ride to the market instead of walking; the taxi driver can buy the excess fish, or something else.

The American economist however sparked an outcry from Kenya’s Central Bank that accused him of undermining the shilling. Mr. Ruddick was therefore charged and arrested but later released. The government declared the currency illegal and anyone found using it would therefore face the law.

Today, the Central Bank of Kenya resumes similar warning this time round being the rise of barter trade in Supermarkets. Since last year, retail shops have carried on the trend of giving customers sweets, matchboxes and airtime for lack of coins.

Supermarket attendants confidently hand buyers sweets instead of currency with some even asking for type preference. Again, the deed has been condemned as the violation of the law to deny customers the possibility of obtaining their change in Kenyan currency. The bank has come forward to say it has enough coins and therefore giving alternative products for change should stop with immediate effect.

With opposition of any other trading methods that do not involve currency, the Kenyan government has put it clear that barter trade is illegal in the country.

Kenyans holding coins

Retail markets have blamed their behavior on shortage of coins in the market which is a repeat of 2011 ‘coin crisis’. Back in the year, the market ran out of coins which forced the bank to inject a whole 9 million worth of coins to revive circulation in the market.

The bank however blamed the public for holding coins in their home. Kenyans dislike currency in form of coins. ‘matatu’ conductors have developed the culture of rejecting coins as a form of payment. In fact, I have ridden to town for free for availing a bunch of coins for fare payment.

This has resulted to coin containers in our houses since shopkeepers also refuse one shilling coins claiming bulkiness. CBK should often unveil ‘coin week’ and “Chomoa Coin” campaigns like they did in 2011 to manage circulation of the currency in the country.


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