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Parliament Committee Ask Central Bank of Kenya Governor to Step-Down
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Submitted by IQ4News on Wed, 15/02/2012 - 6:14pm
By Joab Apollo
The Parliamentary Committee on the Decline of the Kenya Shilling against Foreign Currencies has recommended the resignation of Central Bank of Kenya Governor, Professor Njuguna Ndun’gu, after they found him culpable for the poor performance of the Kenya Shillings against major world currencies.
The report indicates that Professor Ndun’gu allowed the banks to make huge profits at the expense of the Kenyan shillings.
“The Committee finds the Governor’s conduct and behavior incompatible with the holder of the office of Governor of the Central Bank of Kenya and therefore recommend that the governor takes responsibility for allowing the sharp decline of the shilling. The Governor steps aside to pave way for thorough investigation; that the President should constitute a Tribunal to investigate the Governor’s conduct, incapability and incompetence to perform the functions of the office as per the provisions of the CBK Act Cap 491 section 14 (2)(f) and 14(3)". The MPs said in a report tabled in parliament on Tuesday by Wajir West constituency Mp, Adan Keynan.
The MPs blame Professor Ndung’u for failing to react in good time to prevent the sharp decline of the Kenyan shilling and allowing the communication between the Central Bank of Kenya and the Banks
“The Committee finds that the CBK Governor: Did not react in good time to the problem of sharp decline of the shilling which triggered a panic and fertile ground for hoarding in foreign currencies and speculation; Allowed communication breakdown between the CBK and the Banks”. The report states
They further point out that Professor Ndungu is responsible for creating room for banks and unscrupulous people to make quick backs.
“Is squarely responsible for creating the opportunity for Banks and individuals to make quick money through speculation and hoarding". They say.
The report also found out that top management and board members of some banking institutions hold board positions in key public policy organs, a move they say give them advantage over other banks.
“For instance, the CEO of Equity Bank chairs the Vision 2030 board which in the Committee’s opinion and that of other Banking institutions provides undue advantage on present and future information about inflow of funds towards infrastructure development. Similarly, the chairman of Equity Bank chairs the National Oil Corporation", the report states.
They therefore call upon the Central Bank of Kenya to put in place thresholds or trigger values for which the foreign exchange should fluctuate in times of extreme crisis and at which the CBK would move in to restore stability.
Meanwhile a group of MPs have dismissed plans by a section of legislatures allied to Deputy Prime Minister Uhuru Kenyatta and Eldoret North MP, both accused by ICC for crimes against humanity, to move a motion of censure against Justice and constitutional affairs Minister Mutula Kilonzo over his firm stance that they are not legible to vie for presidency in the forthcoming general elections.
In a statement read by ODM Secretary General Professor Anyang Nyong’o, the MPs said that they will not allow the motion to sail through as they are aimed at watering down the spirit of the new constitution.
“We in ODM want to condemn renewed efforts by some desperate politicians still struggling to undermine the full implementation of the Constitution. These schemes have gone into high gear since the ICC ruling last month. The newest of these schemes involves a plan to remove Justice Minister Mutula Kilonzo from office in order to silence him from expressing, as Minister for Justice and Constitutional Affairs, legal opinions which are inimical to these leaders' interests", they said.
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