The consistent strengthening of the Kenyan Shilling against the US Dollar has yielded a positive impact on the Country’s external debt.
The steady trend denoted a favourable position for Kenya as it has enhanced the country’s purchasing power and reduced the cost of repaying loans denominated in foreign countries.
Speaking at the Institute of Certified Secretaries (ICS) 28th Annual International Conference, the Governor of the Central Bank of Kenya (CBK), Kamau Thugge highlighted that the current debt-to-GDP ratio is about 68 percent. The parliament recently approved a measure to cap the debt–to–GDP ratio at 55 percent by 2027.
The conference was opened by the Deputy Chief of Staff, Josphat Nanok on behalf of the Head of Public Service, Felix Koskei.
According to the Governor, at the end of January 2024, the external debt converted into Kenyan Shilling amounted to 6.19 Trillion, while the domestic debt stood at 5.058 Trillion, totaling 11.248 Trillion.
“Following the exchange rate appreciation, calculated at the rate of 131.5, the external debt has declined from 6.19 to 5 trillion, a decline of almost 1.2 trillion, the domestic debt doesn’t change so the two now total to 10.1 rather than 11.1,” Thugge said.
Going forward, he said it reduces the debt service in terms of shilling that the treasury has to pay. Despite the significant global and domestic challenges, the Kenyan economic performance has remained resilient and the outlook has remained strong.
Thugge said that the CBK has had the desire to address the pressure of the exchange rate, mitigate the second-round effects and ensure inflation expectations continue to be well anchored.
“CBK policy measures have been complemented by fiscal measures implemented by the government to moderate the prices of certain commodities to zero rating some food items including wheat, maize rice and sugar and enhancing food production through subsidy on fertilizer prices,” he highlighted.
The Chief Executive Officer, the Institute of Certified Secretaries (ICS), Jeremiah Karanja reiterated that the shilling gaining against the dollar is a great example of good governance which is one of the main issues they had focused on discussing in the conference.
Karanja said that their mandate is to ensure good governance in public and private institutions and promote the principles of integrity and ethical standards.
He said that various leaders from various sectors were invited to the conference to discuss issues related to good leadership, integrity, and ways to improve public and private management systems. These discussions may include strategies to enhance transparency, accountability, and resource management to ensure that all institutions are run responsibly.
Karanja noted that despite the challenges of integrity and governance in some leadership positions in the country, it remains crucial to continue reminding people to work by ethical standards.
He highlighted that ICS has collaborated with the government to write a book titled ‘Code of Governance for State Corporations’ and that since the book was published in 2015, they have witnessed significant improvements in the ethics and leadership of many institutions.
He also noted that the ICS is a true partner in the war against corruption, unethical practices, and the promotion of good governance which they practice through conferences, capacity building, and sensitisation programmes.
Karanja emphasized that there is a need to safeguard all professions from quacks, to avoid disasters in organizations.
“You require a professional worker who is trained, regulated, and can be held accountable so that if they are involved in any professional misconduct, the professional body has the legal mandate to take disciplinary action against them,” he cautioned.
Wyne Kenneth, ICS council member clarified that, “The significance of the meeting is governance and the role it plays in resilience, there are a lot of shocks that are happening to organizations both internally and externally, and generations are changing leading to different workforces. Externally, you can see how Ukraine and Gaza can affect even a small business and individuals from the price change and cost of commodities”
Kenneth said that being a governance body, some key areas they look into are the certification and the regulation of the members even after they are certified.
He said that as a Council Member, he is tasked with capacity development training, and building capacity in ethics and integrity as they work in collaboration with different government bodies to promote these virtues.
ICS whose legal name is the Institute of Certified Public Secretaries of Kenya was created under CAP 534 of the laws of Kenya.
The annual meeting is themed ‘Governance Resilience in the Face of Economic Crisis.’
By Fatma Said and Nuru Soud
