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Economy

Ndung’u tenure as CBK governor ends Tuesday

CBK  Governor Njuguna Ngung’u speaks at a past function in Nairobi. His position has always attracted political and ethnic interest.  PHOTO | FILE
CBK Governor Njuguna Ngung’u speaks at a past function in Nairobi. His position has always attracted political and ethnic interest. PHOTO | FILE 

The curtains officially come down on Njuguna Ndung’u’s tenure at the helm of the Central Bank of Kenya on Tuesday, shifting focus to President Uhuru Kenyatta who is the appointing authority.

Prof Ndung’u, 54, was first appointed CBK governor in March 2007 and has already served two term of four years each, bucking a trend where all his predecessors were unceremoniously hounded out of office.

The position of CBK governor — though meant to attract a person with fingertips on the pulse of the economy —has always attracted political and ethnic interest. Intense lobbying is already underway for the powerful position.

Mr Kenyatta will invoke the current archaic CBK Act, which came into force in 1966 , which gives him sweeping powers to appoint the chairman, governor, two deputy governors and eight other non-executive directors.

National Treasury secretary Henry Rotich remained tight-lipped on succession planning at CBK, saying the President will use the current law to name the next governor. “We will name a new governor when the time comes,” Mr Rotich said in an interview.

Prof Ndung’u on Thursday last week chaired his last Monetary Policy Committee (MPC) meeting, and retained the interest rate unchanged at 8.5 per cent — which was last set in July 2013.

Prof Ndung’u has been a strong defender of mobile money - much to the chagrin of banks – which has helped enhance financial inclusion and deepen banking services to the rural poor and the un-banked.

The 2013 FinAccess survey credits mobile money services for the more than doubling of Kenya’s banked population to 67 per cent from a low of 26.1 per cent in 2009.

A proposed law meant to make appointments to head CBK competitive and cut political patronage at the banking sector regulator is yet to be submitted to the National Assembly.

If President Kenyatta fails to extend Prof Ndung’u term, he will have a rare distinction of being Kenya’s first CBK governor to exit peacefully.

This could however be short-lived as he is already battling a case seeking his arrest and prosecution over his role in the award of a tender to install security software at the central bank.

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