Ndung'u, the economics guru set to actualise hustlers' dreams

Former Central Bank of Kenya Governor Njuguna Ndungu during the interview. [Elvis Ogina, Standard]

President William Ruto would love to replicate the miracle of Mwai Kibaki, Kenya's third Head of State, credited with turbo-charging the country's economy.

Kibaki's administration helped improve the economic fortunes of millions of ordinary Kenyans by having the right hands on deck.

One such pair of hands was that of Prof Njuguna Ndung'u who has been nominated as Cabinet Secretary for National Treasury and Economic Planning by Ruto.

Ndung'u, who served as the Central Bank of Kenya (CBK) Governor from March 2007 to March 2015, will be vetted today by a 15-member committee of the National Assembly.

Ruto is banking on Ndung'u to help him actualise his Hustler narrative in which he hopes to uplift the lives of millions of Kenyans at the bottom of the pyramid by unlocking cheap credit, lowering taxes, and creating a conducive business environment for these 'hustlers.'

The 62-year-old economist looks like he is up to the task, though some analysts' views vary.

There are those who feel that the fact that he does not seem to easily compromise on issues, and has strong convictions, may put him at loggerheads with other stakeholders, including the Central Bank of Kenya (CBK) which is in charge of the monetary policy. The National Treasury, which he will head if approved, will be in charge of fiscal policy - taxation and public spending.

As a researcher and as CBK boss, Ndung'u was obsessed with financial inclusion, an indication that he speaks the same language as Ruto of hoisting millions of hustlers from the poverty trap through cheap credit.

He was instrumental in creating an environment that allowed for the development and roll-out of M-Pesa, a mobile money service owned by Safaricom.

That Ndung'u served as CBK Governor for two four-year terms is in itself was a major achievement as almost all his predecessors were hounded out of office before their terms ended.

A Reuters poll ranked him at the bottom of African policymakers in 2011 after inflation soared and the shilling slumped against the dollar.

The plunge in the shilling and hike in prices saw Members of Parliament attempt to sack him through a censure motion. He survived narrowly.

Gerishon Ikiara, a former Transport Permanent Secretary in Kibaki's government who worked with Prof Ndung'u describes him as a "solid economist". He sees the former CBK Governor as a sober mind, a technocrat, that is not easily swayed by political whirlwinds.

Of course, he will have to find a way of balancing economics and politics as the man charged with the job of managing the country's economic policy.

Ruto himself never worked closely with Ndung'u, but Ikiara reckons that someone close to the Head of State, and who also knew Ndung'u personally and professionally, must have convinced the President to pick the top economist for the job of turning around an economy that has been battered by Covid-19, drought and the war in Ukraine.

According to Ikiara, Ndung'u was one of the individuals who made Kibaki's government successful.

Macro-economic policy

"I expect him to make a real contribution as a finance minister," said Ikiara. Mbui Wagacha, the first chairman of the board of CBK, worked closely with Ndung'u, especially in the latter's second term.

"I was in a position to discuss in detail some work done by the MPC, which Njuguna chaired," said Wagacha.

He says Njuguna has a detailed understanding of the macroeconomic policy of the country.

"His understanding of the macro-economic will serve the nation well."

However, Wagacha opines that there is an obstacle that Ndung'u who is expected to help realise Ruto's dream of lifting the downtrodden from the poverty trap must overcome: a conflicting monetary policy.

The Hustler policy proposes to loosen credit access to small businesses. However, the monetary side is speaking a different language and has been tightening in what is aimed at fighting the rapid increase in prices of goods and services.

Dr Samuel Nyandemo, an Economics lecturer at the University of Nairobi, reckons that Ndung'u scores highly in terms of academic qualifications but he does not think he has the mettle to comprehensively implement the country's fiscal policy.

The Treasury CS nominee lectured at the University of Nairobi, and also worked for Kenya Institute for Public Policy Research and Analysis (Kippra) and the African Economic Research Consortium (AERC).

He was at some point put on the spot over the sale of Hotel Laico (now Grand Regency Hotel) when he appeared before a Parliamentary Commission to give details on a CBK board meeting with Libyan investors interested in the hotel.

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