Nairobi — Former Central Bank of Kenya (CBK) Governor Eric Kotut has recounted his journey from walking barefoot to school in rural Baringo to leading Kenya's apex bank during one of its most challenging economic periods.
Growing up in Eldama Ravine in the then Koibatek District, Kotut said he walked five kilometres to school every day without shoes.
Despite the hardships, he excelled academically, earning a place at Alliance High School after passing the Common Entrance Examination before joining the then University of East Africa's University College Nairobi to study commerce.
"I went to school in 1951 and the school was five kilometres from my home. We used to walk to school every morning and, you know, in those days we wore no shoes," Kotut recalled during the CBK Governors Series.
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Kotut began his career as a Finance Officer at the Ministry of Local Government before serving in Kakamega and later at the Residential Premises Rent Tribunal.
He was subsequently appointed Managing Director of the Kenya National Trading Corporation before joining the CBK as Deputy Governor under the late Philip Ndegwa, whom he credits for mentoring him into the role.
"The governor at that time was Philip Ndegwa. He was a very organised person, very systematic and extremely knowledgeable. He gave me a lot of responsibility, and I learned a great deal from him," Kotut said.
Appointed CBK Governor in 1988, Kotut took office as Kenya grappled with instability in the banking sector.
He said the Central Bank responded by intensifying inspections of weak financial institutions and spearheading the creation of Consolidated Bank of Kenya to absorb distressed lenders.
"The first thing was to intensify inspections in order to identify more specifically the institutions that were weak. We recommended, and government accepted, that we form an institution that provides an umbrella for these weak institutions," he said.
The reforms also led to the enactment of a new Banking Act in 1989, which strengthened the CBK's supervisory powers and established the Deposit Protection Fund Board to safeguard depositors and support troubled financial institutions.
Kotut also oversaw Kenya's economic liberalisation after the 1992 General Election, when donor funding was suspended.
He said the government agreed to abolish exchange controls and import licensing as part of broader reforms.
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"After the elections and the formation of the new government, a review of the situation was made together with donors and it was agreed government agreed to totally liberalise the economy," he said.
The reforms coincided with the repeal of Section 2A of the Constitution, ending the one-party system and paving the way for multiparty politics in Kenya.
