Ruto fixes CBK legal hitch with deputy governor appointment


Dr Susan Koech has been picked as the second deputy governor of the Central Bank of Kenya. FILE PHOTO | WACHIRA MWANGI | NMG

President William Ruto has picked former Wildlife PS Susan Koech as the second deputy governor of the Central Bank of Kenya (CBK), fixing a double legal hitch at the banking regulator.

The Senate is expected to receive her name on Monday when the House resumes sittings after a long recess.

Dr Koech, who holds a doctorate in business administration from Moi University, was the Nairobi regional head at KCB Group before making the switch to government corridors.

The hiring of the second deputy governor will correct a legal breach that has been repeatedly raised by the Auditor-General.

The law enacted in 2015 demands that the executive team at the CBK be composed of the governor and two deputies.

Former President Uhuru Kenyatta ignored calls for the CBK to have two deputy governors during his nearly 10-year tenure.

The appointment of the second CBK governor is also aimed at avoiding a leadership vacuum at the CBK in June when Governor Patrick Njoroge and his sole assistant Sheila M’Mbijjewe will end their last term after serving the maximum of eight years.

State witness

Dr Koech is expected to face tough questions in Parliament over tenders for the construction of the Kimwarer and Arror dams, where she was initially charged with corruption before being turned into a State witness.

Prosecutors accused top officials including former Treasury Cabinet secretary Henry Rotich of inflating the cost of building the two dams to Sh63 billion from an original cost of Sh46 billion.

Prosecutors allege that advance payments were shared out in accounts belonging to the conspirators and their agents.

Dr Koech and former Treasury PS Kamau Thugge were turned into State witnesses in the prosecution of Mr Rotich.

Ten candidates had been shortlisted for the vacant position in recruitment shepherded by the Public Service Commission.

They included Higher Loans Education Board CEO Charles Ringera, former National Bank of Kenya boss Munir Ahmed, former chief executive of the Capital Markets Authority Paul Muthaura and Gerald Nyaoma, the director of bank supervision at the CBK.

Others were former Kenya Ports Authority head of audit Fredrick Oyugi, former director of the CBK currency department James Lopoyetum and Rose Ngugi, the executive director of the Kenya Institute for Public Policy Research and Analysis.

The lack of a second substantive deputy governor has attracted the attention of the Office of the Auditor-General, which has pushed for the filling of the post or amendments to reduce the number of deputy governor posts.

“The Central Bank of Kenya Act, Cap 491 states that there shall be two deputy governors who shall be appointed by the President through a transparent and competitive process and with the approval of Parliament.

“During the year under review, only one deputy governor was in office,” the Auditor-General stated in an audit of CBK books to June 30, 2022.

“There was no amendment to the CBK Act to provide for a reduction in the number of deputy governors.”

The CBK has further been indicted over failure to maintain the required number of non-executive directors at eight, with only four in place at the end of June.

Ms M’Mbijjewe has been the CBK’s only deputy governor since June 2015 and was reappointed for a final four-year stint which runs concurrently with that of Dr Njoroge until June 17.

The country briefly had two deputy governors in 2015 when Ms M’Mbijjewe served together with Haron Sirima, who quit the CBK in October 2015.

Dr Sirima served as the assistant of Prof Njuguna Ndung’u, whose term as CBK governor lapsed in March 2015.

He was considered the natural successor to Prof Ndung’u, who Dr Ruto appointed as Treasury Cabinet secretary.

Dr Sirima is currently the director-general of the Public Debt Management Office at the Treasury where he joined in 2018.

The term of CBK chairman Mohammed Nyaoga will also lapse at the same time as that of the governor and Ms M’Mbijjewe.

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