Newly appointed Treasury Cabinet secretary John Mbadi is expected to mark imprints on the operations of the Central Bank of Kenya as he is set to make four appointments to the membership of the Monetary Policy Committee (MPC).
The MPC is the organ of the CBK responsible for formulating monetary policy whose main goal covers the maintenance of price stability in the economy.
The term of the current four external members of the MPC lapses on August 24 having served through the allowable two three-year terms since 2018, hence necessitating the fresh appointments.
The four Treasury appointed members include Dr Benson Akong’o Ateng’, Dr Margaret Chemengich, Prof Jane Kabubo-Mariara and Humphrey Muga.
Each external member of the MPC serves a term of three years, which is renewable once.
The members are usually largely drawn from the finance industry based on the requirement of knowledge, experience and expertise in matters related to finance, banking, fiscal and monetary policy.
The impending changes come after an earlier overhaul that was brought by the departure of Dr Patrick Njoroge as the CBK governor, Dr Sheila M’Mbijjewe as deputy governor and Mohammed Nyaoga as CBK board chairman at the end of their respective terms.
President William Ruto subsequently appointed Dr Susan Koech as deputy governor on March 10, 2023, and Dr Kamau Thugge as CBK governor on June 19, 2023.
The President later appointed Andrew Mukite Musangi as CBK board chairman for a four-year term that commenced last September.
The appointments changed the faces at the helm of the apex bank while allowing the Kenya Kwanza administration to instill its picks to the CBK after the end of term for the Uhuru Kenyatta-regime appointed executives.
Membership to the MPC consists of the CBK governor who also serves as the chairman of the policy committee, deputy governor, Treasury PS and two members appointed by the governor from the bank.
Outside the four existing external members, the MPC membership includes David Luusa—director financial markets and Prof Robert Mudida—director research with the two making up appointees of the CBK governor to the committee.
President Ruto’s administration will have a further chance to consolidate its desired changes in the oversight of the CBK as four seats on the bank’s board fall vacant in December.
The tenure of Nelius Kariuki, Ravi Ruparel, Samson Cherutich and Rachel Nzombo who are all serving their second terms as board members ends on December 4, 2024.
The board of the CBK comprises 11 members consisting of the chairman, the governor, the Permanent Secretary to the National Treasury and eight non-executive directors appointed by the President.
CBK’s board is tasked with oversighting the bank’s functions by formulating policies outside of monetary policy and reviewing performance.
The appointing authorities in recent years have, however, failed to put up the full complement of board members while the CBK also lacks a second deputy governor.
Auditor-General Nancy Gathungu has continued to raise both queries in audits as the CBK board remains with only half of the required non-executive directors while the bank continues to operate with a single deputy governor despite there being no amendments to the CBK Act to reduce the number of posts.
The board members’ deficiency has not, however, affected the quorum during meetings.
“During the year under review, the bank operated with one deputy governor until March 10, 2023, when a second deputy governor was appointed. However, one deputy governor retired within the financial year on June 17, 2023,” said the Auditor General.
"As at the time of the audit in September 2023, the bank continued operating with one deputy governor. There was no amendment to the Central Bank of Kenya Act to provide for reduction in the number of deputy governors."
The CBK Governor and two Deputy Governors are recruited through a transparent and competitive process run by the Public Service Commission (PSC) after which successful candidates are approved by Parliament and then appointed by the President.
