A Critical Review of the Impact of Demonetization on Kenyan Economy

Download Article

DOI: 10.21522/TIJMG.2015.SE.19.02.Art016

Authors : Sahil Abrol


The study is a critical review of the impact of demonetization on Kenyan economy. The main comparisons are based on Indian economy. Theoretical literature has endeavored to define demonetization and its dimensions. Empirical literature has mainly documented the impact of demonetization in Indian economy. The study had three objectives namely: Establishing the meaning and reasons for demonetization, determining sector-wise impact of demonetization and establishing positive and negative effects of demonetization in Kenya. Research methodology was a descriptive study using secondary data. Findings indicate that demonetization in Kenya largely entailed replacement of Kes1000 note with a new one with enhanced security features, retaining of all the other old currencies and introducing other new currency notes with enhanced physical and security features as provided for by the Constitution of Kenya, 2010. Apart from fulfillment of a constitutional requirement, demonetization project in Kenya also aimed at curbing black money and corruption in the economy. Secondly, the findings indicate that demonetization project in Kenya has mainly targeted the real estate and property sector, retailing sector, banking sector and digital payment platforms. Thirdly, findings indicate that the short term impact of demonetization in Kenya is on personal finance, black money and terrorism while the long term impacts are likely to be felt in tax filing and collections, growth in GDP and expansion of MSMEs.

Keywords: Demonetization, Impact, Kenya


[1].   Abhani, D. K. (2017). A Study On Impact of Demonetization Over the Banking Sector with Reference to Veraval City. International Journal of Marketing & Financial Management. 5(3). 21-26.

[2].   Central Bank of Kenya (2019). https://www.centralbank.go.ke.

[3].   Kushwaha, H., Kumar, A., & Abbas, Z. (2017). Impact of Demonetisation on Indian Economy: A Critical Study. International Journal of Management Studies. ISSN (Online) 2231-2528.

[4].   Mbatau, N. (2019). Domonetization: How Will It Affect the Kenyan Economy. Journal of the Institute of Certified Public Accountants of Kenya. July-August 2019 Issue: 34-36.

[5].   Muthulakshmi, E.K. (2017). Impacts of Demonetisation on Indian Economy- Issues & Challenges. Journal of Humanities and Social Science. 34-38.

[6].   Shah, A. Y. (2017). Impact of Demonetization on Rural India. International Journal of Scientific and Research Publications. 7(3). 220-223.

[7].   Shanbhogue, G. Kumar, A. P., Bhat, S. & Shettigar, C. (2016). A Study On Demonetization of 500 And 1000 Rupee Notes & Its Impact On the Various Sectors and Economy. International Journal of Research in Economics and Social Sciences.6(12). 274-284.

[8].   Shukla, B.G. and Gupta, H. (2018). An Exploratory Study of Business Students Perspectives On Demonetization in India: With Special Reference to Allahabad City. The International Journal Research Publication’s. 07(09). 186-194.

[9].   Veerakumar, K. (2017). A Study on People Impact on Demonetization. International Journal of Interdisciplinary Research in Arts and Humanities.2(1). 9-12.