Kenya central bank governor Njoroge: Calling it as he sees it

By:
Eric Ellis
Published on:

Patrick Njoroge has spent much of his career outside Kenya, mostly in Washington at the IMF as a senior economist. Two decades in that role took him around the world, occasionally as its ambassador, more often in a team of firemen fixing damaged economies.

As for central banks, he has met and advised many. "I know them all," Njoroge says, his eyes brightening. "I can tell you every single governor in the world, just about; I’ve pretty much met them all."

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Patrick Njoroge, CBK

He says the CBK is a good central bank "relative to our peers in East Africa." But that is not enough for Njoroge. "We are thinking [we should be] world-class. 

"My legacy plan is very simple. What I want is a strong, world-class central bank in a vibrant financial sector, that’s my vision for the my-work-is-done moment. Then I can fade into the sunset," he says.

"But it’s more than just practices, it’s bank supervision, robust systems, internal procedures, the way we relate, the way we communicate, all those things should be world-class, our people too, transparency is essential.

"We are a frontier economy, an economy very much in transition, the challenges are many. I have no problem with the challenge, that’s why I took the job."

What are the comparisons? He cites Singapore, only in a technocratic and competence sense. He admires the Swedish model, Australia "to a point", New Zealand. Brazil? "No way."

We discuss central bank governors: Romania’s Mugur Isarescu, the world’s longest serving central bank governor and the towering economic figure in Bucharest; and the doughty Zeti Akhtar Aziz, soon to retire after 16 years in charge at Malaysia’s Bank Negara.

"I know Zeti, she is a great woman," Njoroge says, and talks about the challenges facing Zeti, defending a constitutionally independent central bank and limiting the damage to the economy of a rapacious political class. He could be talking about Kenya.

Visibility

Six months on, and with the shilling stabilised, Njoroge is raising the CBK’s visibility among Kenyans tired and cynical of their grasping leaders, explaining clearly what it is doing on their behalf. The strategy is working and cynical Kenyans accustomed to corrupt officials are gradually having their trust restored in the CBK, largely due to Njoroge’s evident integrity.

As for the CBK’s independence, he seems intent to chart a diplomatic course through the debate about how separate it is from the presidency and the cabinet. "I don’t like the word independence," he says, adding that he’s not leading "the Republic of the Central Bank of Kenya.

"I think the word you should use is autonomy. You always need to be accountable, to the population, to parliament, to the president, but with a clear structure about that accountability. 

"But in terms of policies, the instruments that we use, we can conduct monetary policy without being told by anybody else what their views are.

"I have no illusions that this is a bed of roses. It’s not. I was surprised by how much, let’s say, political pressures come to bear on this. On a scale of one to 10, maybe I expected it at six, and it’s at eight.

"Maybe they’re surprised that I’m so open about it, I’m just calling it as I see it."