William Ruto, President of Kenya, has chosen former governor of Kenya’s central bank Njuguna Ndung’u as the finance minister on Tuesday. The appointment is expected to guide the country’s economy through a drought, high debt load, and growing inflation.
In Kenya, food inflation for August was steady at 15.3%, where it was a year earlier. In an article published in LSE magazine, Prof XN Iraki, an Associate Professor of Business Management at the University of Nairobi said, “Kenya’s average annual per capita income is US $5,270. With inflation, citizens lose even this limited purchasing power. The same money buys less. Wages and salaries do not go up fast enough”.
Ruto was sworn in as Kenya’s president this month, his appointment parallels an economy which is facing its worst drought in 40 years as cattle farmers lose their herds. After unveiling his cabinet, the President said, “We appreciate that we have a difficult economic situation on our hands”. He also requested the parliament to approve his cabinet decisions, so that government can take actions in time.
However, because of increased public borrowing to fund infrastructure projects under his predecessor Uhuru Kenyatta’s administration, he has a very limited fiscal flexibility to put his proposals into action.
Apart from the finance minister, Ruto also designated a former vice president and deputy prime minister, Musalia Mudavadi, as the prime cabinet secretary. The post is fresh and created to coordinate government business.
Ndung’u led the Central Bank of Kenya between 2007-2015 and during this time he contained inflation by raising interest rates and stabilized them afterwards. The tenure of the current central bank governor, Patrick Njoroge, is set to end in June next year.
