Andrew Mukite Musangi is set to become the next chairperson of the Central Bank of Kenya (CBK), leaving the vacant slot of a second deputy governor to be filled to complete the new team to run the apex bank under the William Ruto administration.
President Ruto on Thursday nominated Mr Musangi to replace Mohammed Nyaoga, who exited the CBK board on June 17 after his term expired.
Mr Musangi, an advocate of the High Court and a senior consultant at LJA Associates LLP, beat former chairperson at Kenya Deposit Insurance Corporation James Teko Lopoyetum and four other candidates, including two former Members of Parliament, to the job.
If endorsed by Parliament, Mr Musangi will become the latest new face on the CBK leadership team after the entry in June of former Treasury Principal Secretary (PS) Kamau Thugge as the governor in place of Dr Patrick Njoroge.
Dr Susan Koech was hired on March 10 as the second deputy governor.
The CBK had for years operate in breach of the law requiring the regulatory body to have two deputy governors.
Other people who were eyeing the CBK chairman’s seat were Abdikadir Omar (former MP for Balambala Constituency, also former East African Legislative Assembly MP), John Konchellah (former PS for East Africa Affairs), James Gituro Wahome (an economist and ex-CBK employee) and Thomas Mwadeghu (ex-MP for Wundanyi).
Mr Musangi currently chairs the board at the Public Procurement Regulatory Authority and serves as a non-executive director at listed Centum Investments.
The CBK board of directors is charged with providing oversight of the bank’s functions by formulating policies, formulating monetary policy, and reviewing performance.
As chairman, Mr Musangi will be the one to convene and preside all meetings of the CBK board which have to be at least once every two months, whenever the business of the bank so requires or when requested in writing by at least three directors.
But the retirement of the first deputy governor Sheila M’Mbijjewe alongside Dr Njoroge and Mr Nyaoga turns the focus on the Public Service Commission which has not advertised for the position.
Auditor-General Nancy Gathungu has been pointing out the governance gaps at the CBK, including having operated for years without a second deputy governor and having four board members instead of 11 as stipulated in the CBK Act 2015.
Ms M’Mbijjewe and Dr Koech served together for under three months, offering a brief compliance with the law.
The country also briefly had two deputy governors in 2015 when Ms M’Mbijjewe served together with Haron Sirima, who quit the CBK in October 2015.
The second round of replacements at the CBK is due on December 6 next year when the terms of the four board members—— Nelius Kariuki, Ravi Ruparel, Samson Cherutich and Rachel Dzombo— will lapse.
The mass changes have also been in breach of the CBK Act, which requires phased exits of CBK board members.
“The members of the board shall be appointed at different times so that the respective expiry dates of the members’ terms of office shall fall at different times,” says the Act.
The CBK has struggled to align with this requirement especially given that the current four members of the board were hired at the same time and their three-year terms renewed on December 5, 2020.
The Act is silent on how the CBK should stagger tenures of board members in such a way that they end at different times, a practice that is crucial in ensuring succession without disrupting the organisation.
The practice of phased transition is in line with Mwongozo, the code of governance for State corporations that was introduced in 2015 to promote good governance in public institutions.
“The appointing authority should ensure that the tenures of the board members are staggered to ensure a phased transition,” says the code.
