Let merit determine next CBK boss

Come next week Wednesday, a new governor will take charge of the CBK.

In choosing its man for the apex bank, from Leon Baranski, the first governor of CBK, to incumbent Njuguna Ndung'u, the powers-that-be have always followed a pattern.

The Central Bank of Kenya governor has either been a career bureaucrat or a seasoned economist with a fair degree of exposure in Kenya's corridors of finance.

Occasionally, quite a few had come from the corporate world before picking up the reins at the republic's Central Bank.

It does not matter whether the CBK governor is an accountant from the private sector like Micah Cheserem or a seasoned economist like Prof Njuguna Ndung'u.

Irrespective of background, the CBK governor, like the governors of most developing nations, is expected to do more than just manage monetary policy.

Many reputed economists do understand Upper Hill issues but fail to comprehend King'eero's problems.

The financial system plays such a vital role in the economy of a developing nation that the country's chief economist has to see himself or herself, even though not a politician, as an important part of the Government with a responsibility for delivering economic growth.

What type of a character would the President be looking for then? The very nature of the CBK governor's job demands that the person has to be somewhat independent-minded.

If needed, he or she must have the guts to stand up against the government. It's natural, therefore, that the administration will try its best to send a more flexible person to the apex bank.

After all, a little indirect support from the CBK governor will allow the Jubilee administration, already struggling with a slow growth, massive wage bill, a vulnerable shilling and a growing fiscal deficit, to breathe a little easy.

So don't expect the administration to appoint someone who will disregard Harambee Avenue priorities once he or she tastes the Haile Selassie Avenue freedom.

As the D-day approaches, the corridors of the National Treasury are buzzing with names of who would fit the bill.

There are a few names doing the rounds already but logic should dictate that the current Deputy Governor Haron Sirima, who sits in the nine-member Monetary Policy Committee (MPC), should be the obvious candidate.

 

Dr Sirima has by far the longest history at the bank, having worked his way up from the position of graduate trainee in the then Exchange Control Department which he joined in 1986.

The elevation of the Deputy Governor to the highest position in the bank will not only ensure continuity of regulatory and monetary policies in the economy, but offer an opportunity for the country to benefit from his vast expertise gained both at CBK and the National Treasury.

One of the advantages with regard to upward mobility of a deputy governor to the position of governor is that he or she would have imbibed the institutional culture.

Moreover, the functional independence of the CBK is not promoted if every four or eight years a new governor starts with an induction into the institution, and then follows it up with a steep learning curve into the dynamics of monetary policy formulation.

President Uhuru Kenyatta, as Deputy PM and Finance Minister facilitated the appointment of Dr Sirima to his current position so as to enhance capacity in monetary policy management, particularly in the monetary policy operations of the CBK.

Having been a member of the MPC for the last 4 years, engagement of monetary policy by Dr Sirima is likely to be smooth.

This will also help markets not to become nervous as there would be no imminent changes in policy at the Central Bank as the new governor is likely to carry on from where Prof Ndungu leaves off.

There is also the small matter of regional balancing to the appointment of the CBK Governor.

The President, of course, has the flexibility of appointing the governor from a vast pool of economists, academics, bureaucrats and bankers and in an ideal world, it shouldn't matter where the next Governor hails from.

The qualifications and inherent qualities of the candidates need to be weighed and be the sole criteria on which the appointment is made.

But it has been the nature of our affairs such that the CBK governor almost always hailed from the same region and ethnic background as the serving Head of State.

Governors from a serving President's region served in 43 of the 49 years of the CBK's existence.

President Uhuru Kenyatta's elevation of Dr Sirima to become the nation's next chief economist will therefore go a long way in passing a message to the pupils in Wamba and Layeni that they too can aspire to head CBK without first having to get one of their own into State House.

Dr Sirima is already almost there. He is highly regarded for his extensive knowledge and expertise in the local and global financial systems. Give him the job!