Kenya: Njoroge’s legacy as he hands over CBK governorship

Patrick Njoroge, the outgoing Governor of the Central Bank of Kenya (CBK), is set to hand over the reins to Kamau Thugge this week, marking the end of his eight-year tenure. Njoroge's legacy as a tough regulator who stood firm against political pressures and prioritized customer-centric policies is being praised by financial analysts and experts. Edgar Andagalu, CEO of Viffa Consult, shared insights on Njoroge's tenure and the progress made in digital financial services during his time. Njoroge, a man of integrity with an impressive background at the IMF, gained the trust of Kenyans from the start. Despite initial skepticism about his soft-spoken demeanor, Njoroge quickly proved his capabilities during his handling of crises such as the closure of Dubai Bank, Imperial Bank, and Chase Bank. His swift and decisive actions not only stabilized the banking sector but also exposed underlying weaknesses that needed addressing. Njoroge's refusal to bow to political pressure on anti-money laundering rules showcased his unwavering commitment to regulatory integrity. While some critics point to a perceived lack of innovation during his tenure, others argue that the Central Bank's role is to create an enabling environment for innovators rather than directly driving innovation. The success of Kenya's FinTech ecosystem, exemplified by the growth of M-Pesa and the rise of innovative startups, is attributed to the Central Bank's supportive regulatory approach. As Thugge assumes office amidst challenges such as currency depreciation and rising inflation, analysts emphasize the need for him to focus on managing inflation, bolstering foreign exchange reserves, and reducing government debt reliance on local borrowing. Moreover, the emphasis on fostering confidence in the financial system for local businesses and individuals remains crucial. Njoroge's legacy of customer-centric policies and efforts to enhance SME access to financing are poised to benefit small businesses in Kenya. Policies such as requiring banks to respond to customer grievances promptly and reining in digital lenders have already shown positive impacts, with small businesses accounting for a notable portion of bank interest incomes. While initiatives like the credit guarantee scheme faced challenges in uptake, there is optimism that Thugge's leadership will streamline processes and further support small businesses' financial inclusion. As Kenya transitions to a new era at the CBK, Njoroge's legacy serves as a foundation for continued financial sector stability and growth.