Kenya: CBK Chairperson Nominee Andrew Musangi Vows to Enhance CBK Scrutiny

13 September 2023

Nairobi — The nominee for the Chairperson for the Central Bank of Kenya Andrew Musangi has recommended the oversight and scrutiny of the Central Bank of Kenya especially when it comes to Appropriation in Aid (A-I-A) funds.

The Appropriation in Aid funds collected by state agencies and parastatals to run their function are not collected from the National Treasury and hence not subject to oversight bodies.

Musangi who appeared for vetting before the Joint Committee on Finance of the National Assembly and the Senate opined that scrutiny ought to be done on A-I-A funds for the CBK to enhance transparency.

"Each individual institution that gains from the A-I-A is oversight by Parliament. The question should be why not the Central Bank but to the extent that, that oversight is restricted to the Central Bank of Kenya function as banker, I don't see why not," he said.

Musangi called for the strengthening of the Special Bank Investigating Unit (SPIU) and General Bank Supervision (GSU) to fast-track fraudulent bank activities which include withdrawals and money laundering whose investigations ran for months.

"We must look at the supervisory role that CBK plays to ensure its satisfactorily strengthened such that when a public has a compliant there is recourse for immediate resolution not when a matter is investigated for eight months," he said.

To deal with the current pressure on the dollar shortage that has continued to weaken the Kenyan shilling, Musangi called for permanent structural policies to be mitigated to alleviate the situation.

"CBK key role is stability in the monetary environment and the currency environment. Stability will feed the business and the trade environment. Foreign direct investment will impact the Kenyan shilling which will reduce pressure on the Kenyan shilling," he said.

In addition, the corporate lawyer asserted that the debt is sustainable, and its debt dynamics will be bolstered by planned fiscal consolidation will help address debt vulnerabilities exacerbated by internal and external factors.

"We re not in a great place but we are also not in a crisis, when we look at it we have to think on what do we need to adjust quicker by adjusting the GDP by creating investor friendly policies' and creating stable tax environment," Musangi noted.

Political Intrest

Musangi disassociated himself with the former ruling party on Tuesday saying he resigned at the end of his tenure as National Elections Board Chairperson.

Musangi made the clarification during approval hearings by a joint parliamentary committee.

"I ceased being Chairman. In the last General Election interestingly, I didn't see any replacement appointment being made. I saw my board members serving different political parties," said Musangi.

The corporate lawyer further added that he was not actively involved in the 2022 General Election.

"I was required to be a member when serving as the Chairperson of the board.I did resign after my three year tenure and thereafter I have not continued serving and I have not played any role in the political party," he told lawmakers.

"I have a clearance letter from the registrar of political parties.I have not been registered as a member of any political party," Musangi said.

Musangi actively worked in the political arena where he was received appeals from candidates who had lost in Jubilee Party nominations and presided over hearings between 2013 and 2017.

He reported his net worth at Sh1.2bn with portfolios in real estate, the stock exchange and bonds.

Musangi told MPs that he started his legal firm when he was 27 years old.

"This comprises on interests in my law firm and the real estate interest. Interests in the Nairobi stock exchange and a number of bonds. This is a constantly moving number depending on how I am moving the resources from one item to the other," he said.

Musangi exuded confidence on his suitability, being an advocate with 28 years of experience mainly working with corporate who majorly including financial institutions, will be valuable to CBK.

No conflict of Intrest

He mentioned that he has worked with 12 banks as part of his wide-ranging experience working with financial institutions on issues debt securitization, recovery, and restructuring.

"For me my governance experience is the one experience that I will want to bring to bear to the Central bank of Kenya if approved because one the public has confidence that the institution is being run according to global best practice with request degree of transparency," Musangi stated.

The High Court Advocate denied conflict of interest if approved for the Ggiven his diverse investments in various financial institutions.

"As of 9:52 in the morning, I sold my last shares in a bank in Kenya. My previous investment have no potential conflict of interest. To the contrary, I have been a serial investor since 1999 particularly in the stock exchange," Musangi noted.

He promised to enhance scrutiny on CBK operations through monetary policy statements and financial reporting.

"We must be open to scrutiny even as the Central Bank of Kenya and when you show the public what you are doing in broad daylight I think that examination must be an open book to the extent that the public is made aware of everything the bank is doing," he said.

Once approved, Musangi will replace Mohammed Nyaoga who exited the position after completing his second tenure in office in June.

The Board of Directors provides oversight of the Bank's functions by formulating policies, other than the formulation of monetary policy, and reviewing performance.

The Board comprises eleven members: the Chairperson, the Governor, the Permanent Secretary to the National Treasury and eight non-executive directors all appointed by the President.

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