Former Central Bank of Kenya (CBK) governor Njuguna Ndung’u officially handed over to his successor, Patrick Njoroge, in an unpublicised ceremony at the institution’s headquarters on Wednesday.
Prof Ndung’u, who left in March, sent pictures of the ceremony.
He was credited with making major contributions to expanding financial inclusion, which has now reached 75 per cent well ahead of other African countries. This was mainly through allowing the launch of Safaricom’s M-Pesa despite opposition from a number of commercial banks.
In an interview shortly before Prof Ndung’u’s tenure came to an end at the CBK, StanChart chief economist for Africa, Razia Khan, said: “No other central bank governor has done as much for financial inclusion in Africa.”
However, Prof Ndung’u was in 2011 described in a Reuters’ poll as the worst performing governor following delayed response to the weakening of the shilling.
For the better part of that year, whenever the question was raised as to why he was not raising the policy rate in the midst of the weakening currency, Prof Ndung’u would respond by saying that supply-side shocks could not be controlled by high interest rates.
Eventually Prof Ndung’u relented and raised the policy rate. He raised the CBR from around 7.0 per cent in September of 2011 to 18 per cent in December of the same year. Bank loans climbed to as high as over 30 per cent.
When Prof Ndung’u was leaving office in March, the pressure on the shilling had begun to build and this became obvious the following month when inflation rose close to the upper limit of 7.5 per cent.
It required Sh2 more to acquire the dollar in April compared to the beginning of the year.