Speaking during the Madaraka Day celebration at the Narok Stadium on 1 June 2019, the Governor of Central Bank of Kenya Patrick Njoroge announced that the old Sh1000 notes will be obsolete by Tuesday, 1 October 2019. A move that is alleged to be an attempt to fight illicit cash flows and corruption.
The remarks which in reality are astounding but many who attended were seen to applause and cheer for them! To be precise is that the official gazette notice of 31/5/2019 declared that there are new notes, which are legal tenders. Sh50, Sh100, Sh200 and Sh500 notes will continue to be exchanged until they are out of circulation but the Sh1000 notes their deadline is Tuesday, 1 October 2019! If someone has identification documents, he/she will be allowed to change below Sh5 million at a bank or at its branches but above Sh5 million he/she must get authorization from the Central Bank. If by deadline you would not have replaced your Sh1000 notes, they will be nothing but just papers!
This move by the government is very dangerous as it was taken brusquely such that whoever has no access to media will be difficult for him/her to abide by the order relating to the deadline for replacement of Sh1000 notes. More dangerous is the fact that it could lead to bankruptcy and poverty! Secondly, those who own banks and financial institutions and who are hoarding huge some of looted wealth will succeed in changing without any difficulty as for those who do not own banks and who have put their savings at home then they will face a very difficult time. It is possible the government may accuse them of tax evasion and money laundering etc.!
Indeed, living in capitalist secular regimes ruling by its democratic system is dangerous for humanity’s tranquility, development and prosperity. As these regimes are merciless and have no love for their citizenry due to their running constantly in finding ways to plunder and steal wealth from their citizens including their taxation like VAT, PAYE, NSSF, NHIF etc. and now wants to sink people into further poverty on the pretext of war against illicit cash flows!
Indeed, the capitalist economic system permits and prohibits paper money and give preference to the world’s Super Power’s currency. To the extent that today every country in the world is doing business based on the US Dollar. In other words, a country can stand or fall dependent on the power of the US Dollar! More sadly is that every country in the world has its central bank whose mandate is to give tender for printing of paper money to be used! In other words, money is just paper but its validity depends on the legality of the tender!
According to Islam, printing of paper currency is a permissible (Mubah) matter but on condition that the printed money be proportionate to the quantity of gold and silver owned by the printing country. In other words, if the paper money amount to one billion then there must be a quantity of gold and silver worth the sum of money. Since time in memorial, people used the measure of gold and silver in printing paper currency but on 15 August 1971, the US President Richard Nixon declared worldwide that the US will no longer exchange Dollar to a fixed quantity of gold anymore.
Since that time the wealth of many countries started being looted through the Monetary Policy dependent on the world’s Super Power! Such that today if the US sneezes all the countries catch the cold as happened in 2008 when the US economy crushed it led to the fall of the entire world economy and vulnerability to many countries. Likewise, it leads to slavery of many countries towards the Super Power such that its wish is a command that must be obeyed by the rest even though they may protest an example is the recent US sanctions on Iran and that whoever works with Iran will be punished severely by America!
On the contrary, Islam’s currency will be based on gold and silver because they are the ones which Allah (swt) recognized as wealth or as measure of wealth and that is why Allah (swt) forbade hoarding of gold and silver:
(وَٱلَّذِينَ يَكۡنِزُونَ ٱلذَّهَبَ وَٱلۡفِضَّةَ وَلَا يُنفِقُونَہَا فِى سَبِيلِ ٱللَّهِ فَبَشِّرۡهُم بِعَذَابٍ أَلِيمٍ۬)
“And those who hoard gold and silver and spend it not in the way of Allah – give them tidings of a painful punishment.” [At-Tawbah: 34]
Therefore, very soon when the Islamic State of Khilafah is re-established in the world by the methodology of Prophethood, its currency or money will be 100% in gold and silver standard. In addition, should it print paper notes, then they will be based on the measure of gold and silver available in the State’s reserve. It will never at any one time allow existence of any sum of paper currency that is not backed by gold and silver.
By the establishment of the Khilafah there will be true harmony, development and prosperity of all mankind. In that the circulation of the economy will be stable and will not depend on speculation as witnessed today in the world. Therefore, a person can make his savings in form of gold and silver and does not depend on printing like today’s paper currencies which the government can illegalize overnight and print new ones and make you sleep rich and wake up as a beggar by being made poor by your own government! Consequently, there will be stability in the prices of goods and services unlike what is witnessed today of unnecessary fluctuation of prices merely on economic speculation based on frail viewpoint of the colonial West!
In conclusion, in the Khilafah State, people will be able to directly use gold, silver or paper money in business on condition that they are backed with gold and silver in the Khilafah treasury. Therefore, it is inevitable for us to strive to restore the Islamic way of life via the establishment of the Islamic Khilafah State by the methodology of Prophethood to safeguard the economy and our life in general.
Ali Nassoro Ali
Member of Media Office of Hizb ut Tahrir in Kenya
Article No.53: Friday, 9 Dhul-Qa’da 1440 | 2019/07/12