The Central Bank of Kenya (CBK) Governor Dr. Kamau Thugge has been named the African Central Bank Governor of the Year by the African Banker Magazine.
In its citation of the award to Dr. Thugge, the African Banker wrote: “This year has presented significant challenges for central bank governors worldwide, and we across the continent have not been immune to the economic and geopolitical turmoil. Despite the challenges, during your tenure in office, you have successfully stabilised markets and instilled confidence in the Kenyan economy. The markets have responded by showing their faith and support for the Kenyan shilling, and the banking sector has demonstrated remarkable resilience, positioning itself as a true regional leader.”
The Awards Committee further noted: “In granting you this accolade, the Committee recognised your recent achievements as Central Bank Governor and recognised the strategic role the Central Bank is playing to address market failures and to help put the economy on the right footing to stimulate growth.”
While accepting the award, Dr. Thugge expressed his gratitude to the Board, Monetary Policy Committee, Management, and staff of the Central Bank of Kenya.
The Governor added: “This recognition is an affirmation of Kenya’s sound macroeconomic policies. To this end, I must recognise His Excellency the President Dr. William Samoei Ruto, who has provided overall leadership. I also greatly appreciate the other government agencies we have walked the journey with including the National Treasury, the President’s Council of Economic Advisors, my banking sector colleagues, and our development partners.”
Dr. Thugge explained that when he was appointed CBK Governor in June 2023, the Kenyan economy was reeling from shocks such as a surge in global energy and food prices, and climate factors that were exerting upward pressure on food prices.
“Currencies in emerging and developing economies were on a free fall, due to the monetary policy tightening in advanced economies. Capping all this, was our dysfunctional interbank foreign exchange market, with low liquidity and significant foreign payments backlog, which led to low investor confidence, especially for foreign investors,” he explained.
Dr. Thugge highlighted that as a result of these shocks, the overall inflation rose sharply to peak at 9.6 percent in October 2022, and remained elevated at around 8.0 percent through May 2023. The shilling also depreciated rapidly, exerting upward pressure on domestic prices, and contributing to a significant increase in the Kenya shilling value of foreign currency denominated debt and debt service, he said.
“My priority, therefore, was to address the inflationary pressures and the rapid depreciation of the Kenya Shilling. I convened my first Monetary Policy Committee (MPC) Meeting on June 26, 2023, one week after my appointment as CBK Governor, and The Committee agreed to raise the Central Bank Rate (CBR) by 100 basis points—the highest single rate increase since July 2015. This was followed by another sharp rate increase in December 2023 of 200 basis points, and a further 50 basis points in February 2024, thereby raising the CBR cumulatively by 350 basis points to 13.00 percent. This tight monetary policy stance continues to anchor inflationary expectations and address any residual exchange rate pressures,” said Dr. Thugge.
He added that the shilling has appreciated by 17% against the U.S. dollar since the beginning of 2024, making it the best performing currency against major currencies globally.
“The appreciation has led to huge savings in debt service and reduced debt stock in Kenya shillings—our shilling denominated debt declined by around 6 percent of GDP within a period of weeks,” said Dr. Thugge.
The award was presented at the African Bankers Awards Event in Nairobi on May 28, 2024, on the margins of the 2024 Annual Meetings of the African Development Bank.
The Awards, now in their 18th year, honour institutions and individuals who have contributed significantly to the reform, modernisation and expansion of Africa’s banking and financial sector, while driving the continent’s sustained economic growth.
By Joseph Ng’ang’a
