Here’s why Githae should appoint a CMA chief, fast

We revisit the ongoing violent and deadly conflict in Tana River delta must and say it ought to be halted now rather than later.

The President and the Prime Minister must come out and assure Kenyans that no more life will be lost again because it is their constitutional duty.

The Capital Markets Authority is one of those critical institutions that all investors look up to.

If not to gauge the level of confidence in the economy, investors and businessmen look at the institution for guidance and reprieve incase of disputes.

Whenever stockbrokers have concerns with their shares in any listed company — and they have been numerous, CMA is the institution to seek redress from.

CMA has under its armpit the Nairobi Securities Exchange, an institution worth hundreds of billions of shillings with investors from across the world poring over 52 listed companies representing all sectors of the economy.

The Authority also oversees investment banks and all manner of bodies investing in securities and equities across various institutions.

The CMA literally has the economy in its hands.

Time and again, it has been demonstrated that any wrong signal from the institution and capital flight is an immediate consequence while dimmed investor confidence is an automatically follow up.

It is with this in mind that it is a great concern that CMA is set to be without a substantive chief executive up to, at least, January next year.

Is the Finance Minister Njeru Githae playing plain naïveté, was the process was corrupted at some point?

Reminded by media

First, it is an election year.

Election years come with its set of risks and uncertainties. This year’s is probably the biggest in as far as political risk is concerned.

To have an acting chief executive to head an institution as one is being sough is not a bad idea.

However, in some quarters, this can be interpreted otherwise.

An acting chief executive can be a puppet to the authorities that be in pursuit of a confirmation for the position.

Secondly, it is not very clear why Mr Githae did not choose from the list of the three he was given.

He had to be reminded three times by the media.

His argument was that the list presented to him was unqualified for the position, a proposition that the chairman Kung’u Gatabaki refutes as the process followed due diligence and the least qualifications for the positions were advertised.

Of the three shortlisted candidates, Paul Mwai is the current CEO of AIB Capital, an investment bank, he has an MBA in strategy and entrepreneurship from Strathmore Business School.

He has worked in the financial services since 1992.

Wanjiku Mugane is an investment banker currently working with Standard Chartered Bank.

The list also included Rose Lumumba, a MBA holder, advocate of the High Court and a Certified Public Secretary with more than 20-years experience in capital markets, and who is currently is the director in-charge of communications and the Corporation Secretary at CMA.

All the three met the bare minimum qualifications.

Mr Githae also said that the other reason he did not chose a new chief executive for the CMA is due to the fact that Treasury is in the process of upgrading CMA to category ‘A’ status.

Githae said upgrading is more of an administrative process than anything else that will see CMA seen as a parastatal and thus be accorded more attention and money as Central Bank or Kenya Revenue Authority.

Bad precedent

This is a good move by any standard. It will strengthen CMA and attract much more capital inflow spurring investment.

However, this does not bar Githae from naming a substantive chief executive officer for CMA.

But perhaps what is really a cause of concern are reports of late night lobby meetings to have ‘one of our own’ at CMA.

If in any way, the interest group is the reason for the delay as it is clear, then that is a very bad precedent. CMA is at a point where it needs to move to the next level.

Several changes in regulations have been proposed to make CMA one of the best in Africa. For what is worth appoint a chief executive based on merit and appoint him or her fast.