Uhuru backs CBK boss for another term

February 28, 2011
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, NAIROBI, Kenya, Feb 28 – President Mwai Kibaki\’s re-appointment of Prof Njuguna Ndung\’u as the Central Bank of Kenya (CBK) Governor has attracted praise from various industry stakeholders who have expressed their confidence in the economist.

Finance Minister Uhuru Kenyatta said on Monday that the extension of Prof Ndungu\’s term was in recognition that the governor is best placed to not only transform and stabilise the financial sector but also to support overall economic development

He hailed the extension of his tenure saying it would provide the continuity needed in the implementation of major reforms in the financial sector.

"We must all recognise that over the period when he has been the governor, we have seen major transformation especially in the financial system in the country and therefore we at the Treasury concur with the President\’s decision," the Minister said.

The governor has been credited with stabilising the monetary policy, overseeing the development of new products such as the mobile money transfer services as well as the introduction of agency banking

Prof Ndung\’u, whose four-year tenure was to end on March 4 had his term extended in a special gazette notice issued on Friday last week.

"In exercise of the powers conferred by section 11 (2) of the Central Bank of Kenya Act 1, Mwai Kibaki, President re-appoint Prof Njuguna Ndung\’u to be governor of the Central Bank of Kenya for a term of four years with effect from March 4, 2011," the notice published on February 25 reads.

The re-appointment comes hot on the heels of the controversial nominations of three people to key judicial positions which raised a storm and led the President to withdraw the names and refer the matter to the Judicial Service Commission.

Mr Kenyatta hoped that the renewal of the governor\’s contract at the helm of the CBK would be supported by all and that it would not raise a storm as did the President\’s nominations to the judicial posts.

"I would definitely hope that all Kenyans will be able to understand that we are talking about an individual with capacity. We don\’t want to create a storm when we are on the path to economic recovery, we would want everybody to support this appointment not for the Governor\’s sake or the President\’s sake but for the sake of economic growth and job creation," Mr Kenyatta asserted.

The Kenya Private Sector Alliance for instance wanted the position to be competitively advertised so as to eliminate suspicion in the appointment.

However, the Kenya Bankers Association (KBA) hailed the Prof Ndungu\’s record saying together with industry players he had taken developments in the sector forward.

"We have built a lot of confidence in his leadership at the helm of the regulator and his re-appointment is an assurance that we will continue working together for the good of the industry," said KBA Executive Director Habil Olaka in the association\’s congratulatory message.

Observing that the licensing of Credit Reference Bureaus in 2010 and setting up of currency centres in various parts of the country had helped to reduce risks and transaction costs, Mr Olaka said this reinforced their desire to continue working with CBK to further deepen the sector.

"We have a lot of projects underway like the cheque truncation project and we are looking forward to continued partnership with CBK to expand the reach of banking services to the un-banked and under-banked population in Kenya as well as address the issue of affordability of banking services," Mr Olaka said.

And as the governor embarks on his second term, he will be assisted by a new board that will be named before the end of this week.

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