Economy
Disoriented by a dam scandal, the “gentleman” takes over the presidency of the Central Bank of Kuwait
Tuesday, May 16, 2023
Kamau Thug was among the six candidates selected in the race to replace Dr. Patrick Njoroge as Governor of the Central Bank of Kuwait. He was nominated to succeed him. file image | NMG
In less than three years, Kamau Thugge went from prime suspect in the Kimwarer scandal and scandal to state witness and economic advisor to President William Ruto before being nominated to become the 10th governor of the Central Bank of Kenya (CBK) in one of the rarest comebacks of a senior civil servant in recent times. Last.
If approved by Parliament, Thugge would return to the forefront of driving President Ruto’s economic agenda in the next four years and would replace Dr Patrick Njoroge who had a difficult experience in the last months of his term battling the twin problems of currency depreciation and runaway inflation. .
On Monday, the presidential palace announced the candidacy of Dr Thug, thrusting the former chief treasury secretary into the center of the country’s economic and financial storm.
The economist’s first order of business, who is the chief advisor and head of finance and budget policy at the State House, will be to align President Ruto’s bottom-up agenda, which includes expanding credit to millions in the informal sector, using the Hustler fund.
is reading: President Ruto nominates Kamau Thug for the post of Governor of the Central Bank of Kuwait
Dr Thugge, who returned after being ousted from the National Treasury under a cloud of corruption charges, was cleared of any wrongdoing in 2021.
But the case against his former boss, Henry Rotich, who was Chancellor of the Exchequer, is still ongoing.
Dr Thugge is also expected to calm investors’ nerves after complaints of a dollar shortage sent the shilling exchange rate down to a record low of 137 at the close of business on Monday.
The candidate is said to have narrowly defeated Aaron Sirima, director general in the Treasury Department’s Office of Public Debt Management, for the position, according to State House sources.
“His Hon. William Ruto Samui Ruto, Ph.D., CGH, President and Commander-in-Chief, Kenya Defense Forces, on the recommendation of the Public Service Commission, has nominated Dr Kamau Thugge, CBS, for appointment as Governor of the Central Bank of Kenya (CBO) Felix Koski, Chief Public Service Officer, said. in a statement.
Mr. Koski added, Dr. Njoroge, who has been working for the Central Bank of Kuwait since June 19, 2015, is not legally eligible for reappointment.
Besides overseeing monetary policy at the Central Bank of Kuwait as Chairman of the Monetary Policy Committee (MPC), the governor also ensures that banks are in financial health by diligently adhering to some prudential guidelines.
Under Dr. Njoroge’s direction, three banks – Bank of Dubai, Bank Imperial and Chase Bank – collapsed and his critics accused him of arbitrariness.
Dr. Njoroge responded by saying that these lenders were engaged in malpractice.
A notable feature of Dr. Njoroge’s two terms of office was the strained relationship with the banks, in part because of his need to maintain a reciprocal relationship with the institutions he regulated, but also because of his outright isolation.
Bank executives, who haven’t had a chance to chat with the outgoing governor, will be watching closely what kind of personality Dr. Thug brings to the central bank’s corner desk.
Thugge, who has spent most of his adult life in the United States, first studying economics at American universities and then working for the International Monetary Fund, is a soft-spoken scholar who doesn’t mind being invited to a social event in the evening after a difficult period. today’s work.
Samuel Nyandimo, a lecturer in economics at the University of Nairobi, agreed that Dr. Thug has a solid understanding of the country’s monetary and financial affairs.
“He has extensive experience in the field of macroeconomics,” said Dr. Nyandimo.
“However, we have not forgotten the dam scandal,” added Dr. Nyandimo.
It is not only the scandal over the Arror and Kimwarer dams that is likely to haunt Dr Thugge but also the issuance of the country’s first international bond whose paper trail the Treasury did not explain well to the public.
Then Dr. Thugge and other government officials insisted that no money was lost during that time.
And now, coincidentally, Dr Thugge will be one of the state officials who will be tasked with raising another IB to repay the $2 billion for the first time.
Dr Thugge defended the Planning Ministry after a review of Eurobond funds found the billions raised could not be accounted for because the spending had occurred outside the IFMIS integrated financial management system.
He insisted that the money be fungible and entered into a single pot, a position confirmed by then Auditor General Edward Oku.
Kenya’s first international bond payment is expected in June next year.
The Governor of the Central Bank of Kuwait, who is the chief executive of the country’s main bank, serves a four-year term and is eligible for one additional term.
The MPC governor, one of the bank’s highest decision-making organs, regulates the amount of money circulating in the economy.
Dr Thugge, who held the position of PS Treasurer between 2013 and 2019, will be tasked with helping lower the cost of living and ensuring the success of the interbank forex market.
He was forced out of his position at the Treasury over his alleged role in the construction of the multi-billion dollar Kemwarar and Arur dams at Elgeyo Marakwet.
Previously, he worked in the Ministry of Finance as Head of the Financial and Monetary Affairs Department and held other senior positions such as Senior Economic Adviser and Economic Minister.
Prior to joining the Treasury Department, Dr. Thuj worked with the International Monetary Fund as a Senior Economist and Deputy Division Chief.
His tenure makes him a favorite of the Bretton Woods Institutions who interact regularly with the Treasury and the Central Bank of Kuwait on multilateral development financing matters as well as in the formulation of monetary and fiscal policy.
However, his appointment risks drawing criticism from independence hawks who insist that the governor of the Central Bank of Kuwait should be the office that fulfills its obligations objectively with little interference from outside interests.
is reading: Central Bank of Kuwait governor’s performance card
His appointment comes at a time when the country is grappling with a myriad of financial issues, including rising inflation and a weak shilling amid the credit crisis.
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