Government robustly defends CBK chief

March 7, 2012 6:53 am
There was uproar in the House after Githae urged the House to reject the report/FILE

, NAIROBI, Kenya Mar 7 – The government on Tuesday made frantic efforts to defend Central Bank of Kenya (CBK) Governor Njuguna Ndung’u in Parliament over allegations that he did not act fast when the Kenya shilling depreciated to unacceptable levels last year.

Acting Finance Minister Njeru Githae told a charged House that the factors behind the depreciation of the shilling were beyond Ndungu’s control.

Githae trashed a report on the shilling being debated by MPs, saying the governor had already redeemed himself because the rate of inflation has gone down.

There was heated debate in Parliament as the House discussed the controversial report that among other things recommends that the governor steps down for his handling of the currency’s near collapse last year.

There was uproar in the House after Githae urged the House to reject the report by the Parliamentary Select Committee (PSC) on the depreciating shilling.

“We can blame everyone else, but not governor Ndung’u; we can blame our appetite for imports but not governor Ndung’u. It is wrong to blame Governor Ndung’u alone,” he emphasised.

But the chairman of the committee Adan Keynan maintained that banks and the CBK were to blame for the crisis that saw the local unit touch a historic low of Sh107 to the dollar.

“The Sh600 billion is not a one night event… it is from March to November (2011) a bank would have visited this every day,” Keynan argued.

Gwassi MP John Mbadi also accused Githae of misleading the House that Ndung’u was not to blame for the shilling’s woes.

Mbadi, in his contribution, pushed the point that governor had failed in guarding Kenya’s economic interests, arguing that Governor Ndung’u is paid to ensure the monetary market is stable and that the shilling is guarded from adverse external forces.

“We’re paying Prof Ndung’u not to engage in politics, we do not pay him to enjoy himself and tell us he cannot do anything,” said Mbadi. “If he cannot do all this things, the only thing this House can tell Prof Njuguna Ndung’u is to go home so that we can hire somebody who is competent and has the whim.”

Assistant Minister Mwangi Kiunjuri was next in opposing the report which he said had been personalised. He instead urged the MPs to consider amending the report to remove all allegations against the governor.

“We should also look at the motive of the members. Sometimes a good report is compiled but you zero in on a particular individual because you want to punish or because you think so and so should be appointed and we direct all our energies there,” Kiunjuri said.

Tetu MP Francis Nyammo opposed the report saying the depreciation was a “manifestation of problems in the economy” which ought to be fixed.

He accused the committee members of “just looking for scapegoats” instead of addressing fundamental issues in the economy.

“Why do we want to think that the banks are doing anything wrong when they are in business? This is a blame game. We just want to bury our heads in the sand,” Nyammo asked.

He found himself in unfamiliar territory when Mbadi accused him of bringing down a bank.

But Nyammo, who acknowledged having a stake in the collapsed Kenya Finance Bank, said that he no longer had interest in the banking sector apart from “being a customer of a number of banks.”


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