CBK Governor Optimistic of Kenyan Economy Ahead of 2017 Elections

Central Bank of Kenya Governor Dr. Patrick Njoroge says his comfort zone is speaking to people directly. He says life has greatly changed and people whom he knew way back are growing older each day.

Patrick Njoroge, 55, a member of Catholic sect Opus Dei, was speaking for the first time at the monthly Mind Speak public forum, a business club run by Aly-Khan Satchu where a key note speaker highlights their sector or business and the life decisions that may have led to their current stay on Saturday.

He likened the forum as a ‘homecoming for me’ to a fully packed audience in the room that when Aly-Khan Satchu introduced him to speak, he said, “The CBK Governor Dr. Patrick Njoroge is a viral sensation. The markets believe in CBK Governor. ”

Njoroge used the forum to speak about the Kenyan economy vis avis the global arena and answer session with the public, answering questions on the economy, international politics and even his life.

With life’s fleeting moments in front of our eyes the Governor in a humorous way says, “Life is too short to write Memos, that’s why I like Twitter. You can say everything you want in 140 characters.”

But when he speaks about the economy, he emerges as an astute defender for the common person.

“We are comfortable that the war against inflation has been won. When I came in, there was a cocktail of problems: rising interest rates, foreign exchange market market, inflation and poor Government spending something that was ‘horrendous’, but towards the end of 2015, we had stabilized the economy.”

He is more optimistic about the prospects of the Kenyan economy going forward. “We are characterising 2016 as a transition year. Last year we were cautious,” he says.

He reiterates an economic growth of 6 per cent in 201 with the agriculture sector contributing more to it and the tourism sector showing a positive growth. “We have a 60 percent range of the tourist bookings based on the Jomo Kenyatta International Airport (JKIA) arrivals.”

However, when asked about the 2017 General elections in Kenya and the increased polarisation and his 6 percent growth aspect he says:

“The numbers is not what is important. It is the direction the economy is going. The economy is doing much better.

We always do not agree. We agree with the 5.6 percent growth witnessed in 2015 compared to other economies. However, the global growth was lower and the growth rate witnessed was below our potential.

Read: Next General Election Greatest Challenge to Kenya’s Economy

Elections is part of the landscape. External shocks are not very important. They are there and being an investor, prospects after the elections do not have a different economic model,” he noted.

On putting banks under receivership as witnessed with Dubai, Imperial and the Chase Bank, he said those were the most difficult decisions he had to make.

“I worry about the people, it’s not about the numbers that is firing people and putting banks into receivership. It’s with deep regret that we closed banks,” he says.

On imperial Bank: “We learnt that we didn’t have the IT infrastructure to audit the IT systems of the banks, it was a crime of opportunity with the use of IT systems.  For the depositors, I have read your letters, we understand you. We are working on it. To us depositor are not just numbers they are people with faces and that pushes us to deal correctly.”

“Never before has a few people robbed so much from so many. By end June, this Imperial Bank issue will be over,” he said.

On Dubai bank, he says perpetrators of the bank fraud will be made accountable once investigations are over but on Chase bank, the governor says, “It’s the first time a bank has been successfully reopened. Last week, Chase Bank had opened 224 new accounts,” he reported.

Going forward, he describes the financial sector under the ‘New Normal’ underpinned on three pillars: transparency, better governance and business models.

He states governance is key in the banking sector where supervision must be effective and banks assessing how resilient they can be.

He says, he would like to see more innovations in the banking sector but wards that, “If a bank tells you that here is our new app, tell them to get lost. They should innovate.”