Opinion
Elevation of CBK’s Mwatela far from show of gratitude
By JAINDI KISERO
Posted Tuesday, September 9 2008 at 19:36
MRS JACINTA MWATELA, who was replaced on Tuesday as deputy governor of the Central Bank of Kenya, is an extraordinary banker and public officer. Her story and record of service at the CBK offers an illuminating study on what personal commitment to probity by a public official can bring to public office.
Observers who have been keenly following the shenanigans at the Central Bank of Kenya know very well that her replacement and promotion to the position of permanent secretary for the Ministry of Northern Kenya and Arid Lands was not inspired by a sense of gratitude to the 30 years of exemplary service she has given to the CBK.
The truth of the matter is that somebody wanted her out of the way at the central bank in a hurry. It is an open secret that she was not in good books with the clique that wields power at both the Central Bank of Kenya and the Treasury.
Outspoken and uncompromising on issues to do with procedure and probity, she found herself on the wrong side with powermen over the manner in which the multi-million second generation currency printing contract was handled.
Last month, she rubbed the powermen the wrong way by the evidence she gave to the Chris Okemo-led parliamentary committee on finance and public administration that was investigating the Grand Regency saga.
Within the Central Bank itself, it was an open secret that she was among a group the insiders at the bank would derisively refer to with the code name, “The Three Musketeersâ€. Mwatela was perceived as the inspiration to a group of three tough women in the top management of the bank, who refused to play to the whims of politicians and influence-peddlers at the Central Bank of Kenya and the Treasury on matters of procedure and probity.
With her exit, the three musketeers have more or less been dismantled.
The manner in which Mrs Mwatela was replaced raises several broader policy questions. Can we— really — claim to have an independent central bank?
Why does the Government pretend to subscribe to the principal of central bank independence, but in reality treat the affairs of this critical regulator of the financial system as if it were another ordinary parastatal?
If we indeed believed in an independent central bank, the Government should have left the recruitment of the second in command of this key institution to its board.
The issue of Central Bank independence is as old as central banking itself. We need to renew our faith in this principle so that we can keep politicians and the Government away from the Central Bank as far as possible.
IT IS FOOLHARDY TO ENTRUST THE power of issuing paper money to the Government. Goldenberg happened basically because we had a central bank that was willing to cede power to ministers and permanent secretaries at the Treasury.
Why are were driving in the reverse in terms of the need to achieve independence and autonomy of the Central Bank of Kenya?
Last year, the Treasury tried to introduce changes to the Central Bank Act with the aim of introducing a chairman appointed by politicians.
Treasury’s argument at that time was that the current arrangement, which allows the governor to hold the positions of both chief executive and chairman of the board was not in line with modern corporate governance practice. Clearly, the intention was to get the Central Bank to cede space to politicians.
Fortunately, that move did not see the light of day. What Kenya needs is a central bank whose commitment to price stability cannot be influenced by either short-term considerations of politicians or the borrowing appetite of those big spenders at the Treasury.
Inflation is the cruelest form of taxation on the people. Yet only an independent central bank, operating autonomously without the influence of politicians, can deliver monetary conditions for non inflationary growth.
We should not allow politicians to come near the conduct of monetary policy. Faced with hyper-inflation, authorities in Zimbabwe recently ordered the removal of zeros from their currency notes.
The idea that inflation can be brought under control by simply deleting zeros from the currency notes is utterly foolish. It is like believing that you spend less on the scratch cards for your mobile phone by buying more “bamba 20sâ€.
Monetary policy must be left to an independent central bank run by individuals who do not owe their positions to political patrons.
In 2003, David Mwiraria made a decision that led to the collapse of the government bond market when he announced in the Budget Speech that year, the reduction of the cash ratio from 10% to 6%.
By this move, the minister had freed Sh8.1 billion of liquidity into the marketplace. The 91-Treasury Bill rate went to 1 per cent. When the rates started coming up, it triggered market volatility as never seen before.
What is my point? That politicians must keep away from the Central Bank of Kenya.
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Folks,
If this story is true, then Kenyans small and big must stand up in arms to get to the
bottom of this. Finance Ministry is dirty, it must be cleaned right from top including the Minister. Dont give these crooked gang of leadership thugs a chance to run down Kenya for their selfish stomach. They are infested dogs, they need mass action otherwise they will never get it. Make noise people and DEMAND for JUSTICE, dispite JUSTICE in Kenya has an iron steel padlock. Dont give in. Ask yourself why that retiring aged man Michuki is appointed to Finance Ministry. It is a scam. It is your future people, fight for it. Central
Bank must be investigated. Something is cooking.
Women, it is time to stand up and protect your owns when Legal Justice is unfairly oppressive to women and when Administration is seen to be manipulative.
It must become PUBLIC JUSTICE to protect public funds/money from marauding
shameless bald head thieves. They dont understand gentlemans way people!!!!!!!!!!
I tell you, these thieves will never BULGE. They must be confronted and uprooted by PEOPLE DRIVEN DEMANDS mass action that follows with Kicks and Blows if
possible. Dont be cowed with the polished suits they wear, they are professional thieves.
They will continue to perfect thier act day in day out. Dont give them a chance people,
dont close your mouth as well, go to the mountatin tops if possible, do what is doable.
They will continue to intimidate and silence people from exposing them, dont give them a chance. Civil Society, Vijana saidia akina mama.
Dont stay beaten down people, get up and maintain the struggle we will get there some day people.
I love you all.
Judy Miriga
USA
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Date: Wed, 10 Sep 2008 04:52:16 -0700 (PDT)
From: Judy Miriga
Subject: Fw: The Removal of Ms. Jacinta Mwatela From CBK is a slap on the face
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On Wed, Sep 10, 2008 at 4:47 PM, African Press International (API) wrote:
Why not stand up also as well now that Raila has dismissed the boss of NSSF? Why only are we thinking of Central bank?
Is this the right way we should go about things? The woman in `NSSF waht did she do wrong?
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API
Even if Lumbasyo did nothing wrong and I called Atwoli on his cell phone number and he just insulted me ‘stupid’ and hung up and sent me an sms also
Robert
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Date: Wed, 10 Sep 2008 16:50:28 +0100
From: Robert Alai
Subject: Re: The Removal of Ms. Jacinta Mwatela From CBK is a slap on the face
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On 9/10/08, African Press International (API) wrote:
http://africanpress.wordpress.com/2008/09/11/questioning-the-removal-of-mwatela-from-the-central-bank-of-kenya/
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Api
You are very wrong. Lumbasyo employed 100 people b4 her sacking and 67 are from her community. Her daughter she employed as branch manager 4 westlands. 3 relatives of Atwoli were illegally employed at nssf. What do u want?
Alai
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Date: Wed, 10 Sep 2008 19:10:28 +0100
From: Robert Alai
Subject: Re: The Removal of Ms. Jacinta Mwatela From CBK is a slap on the face
