Dr. Njoroge Reappointed as CBK Governor

Dr. Patrick Njoroge has been reappointed as the Central Bank of Kenya (CBK) governor for a second and final four-year term by President Uhuru Kenyatta.

The President announced the reappointment through a special gazette notice dated May 24, 2019 and issued Thursday morning.

“In exercise of the powers conferred to me by section 13 (2) of the Central Bank of Kenya Act, I Uhuru Kenyatta President and Commander of the Republic of Kenya Defence Forces re-appoint Patrick Ngugi Njoroge to be the governor of the Central Bank of Kenya for a period of four years with effect from the 11th June 2019,” said President Kenyatta.

This new term will see Dr. Njoroge serve until June 2023.

His first appointment as CBK governor was on June 26, 2015 with his four-year renewable term expected to come to a close on June 19 this year.

In the same vein, CBK deputy governor Sheila M’Mbijjewe and CBK board chairman Mohammed Nyaoga also had their terms renewed by the President.

Performance

Formerly an advisor to the International Monetary Fund, Dr. Njoroge assumed office during a time when the country faced inflation risks and a currency slump.

Under his watch, the rate of inflation has remained largely under control at an average of 6.2 percent during the period and within the 2.5 – 7.5 target band set by the government.

On the other hand, the shilling has experienced a fair amount of stability, remaining at an average of Sh101.97 to the US dollar. The governor has also denied claims of over-valuation of the Kenyan shilling, saying it derives its value from the forces of demand and supply.

His entry into the Central Bank has led to the dawning of a new order for Kenyan financial institutions with banks being made accountable for the enforcement of banking regulations.

Several banks have also been placed under receivership including Dubai Bank – which is currently undergoing liquidation, Chase Bank – which as recently reopened and Imperial Bank – which is the subject of a sale transaction with the KCB Group.

During his reign, commercial banks have limited credit extended to small businesses following the enactment of a law that caps lending rates at no more than four percentage points above that of the CBK.

The measure was put in place to counter the high cost of credit to individuals and private businesses at interest rates of more than 20%. The result, however, has been that banks are applying more caution in their lending thus reducing the flow of credit in the market.

According to data by the CBK, private sector credit has experienced a 4.9 percent growth in the 12 months to April from 4.3 percent posted in March.

However, contrary to the Central Bank’s 12 – 15 percent target rate, credit growth has remained well below that.

New Currency

Despite facing criticism from some sections, the CBK recently rolled out the much-awaited and controversial new-generation currency in line with the dictates of the constitution.