By Brian Ngugi
President Uhuru Kenyatta has maintained silence on when he will appoint a new Central Bank of Kenya (CBK) board, nearly one-and-a-half years since terms of five members expired.
Mid-April, the Treasury said it had finalised picking nominees and expected them to be appointed "soon".
The President appointed lawyer Mohamed Nyaoga in June last year to chair the new and more powerful board, but is yet to pick five members, with no explanation on the delay. Changes introduced in 2012 created a two-tier board to check the governor's influence on the economy.
New rate regime
Yesterday, State officials were mum on the process that is crucial as the board oversees performance of the bank's executive as it implements the new rate capping regime.
Spokesperson for the Presidency Manoah Esipisu did not pick our calls nor return messages sent to his phone. Neither did National Treasury Secretary Henry Rotich and the deputy State House chief of staff and head of Public Service Nzioka Waita.
Following the long delay, focus has turned to the implication of the lack of the crucial policy making board, especially at a time Kenya's financial sector is in the grip of massive changes.
"I am sure the Central Bank itself would like to lift this shadow — It is self-evidently not optimal," said Rich Management CEO Aly Khan Satchu.Mr Rotich had said in April that the names would be forwarded to the President for appointment, ahead of approval by Parliament.
"We have finalised on the names on the board members. They will be appointed by the President and then approved by Parliament. We expect this to happen very soon," said Mr Rotich.
The lack of a board of directors at the CBK initially became a major point of focus, following a crisis of confidence in the country after the fall of Chase, Imperial and Dubai banks and suspension of six managers at the National Bank of Kenya.
Such a board would be expected to have a committee specialising in matters relating to ensuring the stability of the financial sector as a whole.The team is supposed to set CBK's policies, review performance of the governor and provide oversight over the regulator's strategy and financial management.
Discuss performance
Under the CBK Act, the board is supposed to meet not less than once every two months to discuss the regulator's performance, check decisions made by management and consider capital investments.
The hole in the board has been seen to stall a fully constituted panel to execute its role. Under the Central Bank of Kenya Act (Cap. 491), the responsibility of determining the policy of the bank, other than the formulation of monetary policy, is given to the board of directors.
The CS had, however, said earlier that the absence of a board did not mean that the financial sector was under threat since the governor was charged with ensuring risks are minimised.