Kenyan lawmakers have confirmed the appointment of Kamau Thugge as the new governor of the central bank, marking a significant step in the restructuring of the institution’s top leadership. Thugge, aged 66, will assume the role after the completion of Patrick Njoroge’s second four-year term on June 17. Alongside Thugge’s appointment, the government is preparing a shortlist of replacements for Deputy Governor Sheila M’Mbijjewe and Chairman Mohammed Nyaoga, whose tenures will also conclude on the same day.
President William Ruto’s selection of Thugge aligns with his administration’s “bottom-up” plan, which aims to enhance funding for industries like agriculture and construction to generate employment opportunities and foster economic growth. Ruto had previously appointed former central bank Governor Njuguna Ndung’u as his Treasury secretary. While the central bank’s primary role is to maintain price stability, it is also mandated to support the government’s economic policies.
During his confirmation hearings, Thugge outlined his priorities, which include combating inflation, enhancing bank supervision, promoting industry consolidation, and strengthening microfinance institutions. He also intends to integrate Kenya’s payments system with an intra-African trade platform advocated by the African Export-Import Bank. Thugge expressed a willingness to explore issuing domestic dollar bonds to boost liquidity in the foreign exchange market, a move that was cautioned against by Njoroge, who warned of the potential risks of dollarizing the economy.
Thugge assumes the position amid challenges for the central bank, such as rising inflation and a depreciating currency. The Kenyan shilling has weakened by 11% against the dollar this year, making it one of the ten poorest performing currencies in Africa. Additionally, inflation has exceeded the central bank’s target upper limit of 7.5% for twelve consecutive months.
While Thugge’s appointment is not expected to drastically alter Kenya’s monetary policy direction, he may be more accommodating to the government’s fiscal requirements compared to the previous governor, who was known for being more conservative. Thugge, who holds advanced degrees in economics from Johns Hopkins University and has experience at the International Monetary Fund and the Kenyan Treasury, will have Susan Koech as his sole deputy governor until a second deputy is recruited.