•The vetting exercise was almost called off after he appeared before the committee without his original academic documents.
•Thugge in his response proposed the issuance of locally sold dollar denominated bond with the government offering good rate to aid liquidity.
Image: EZEKIEL AMING'A
Central Bank of Kenya Governor nominee Kamau Thugge was on Tuesday put on the spot on how he will tackle the economic challenges facing the country.
Rising debt, a free falling shilling and rising inflation and the Arror and Kimwarer Dams scandals were some of the issues that came up during the vetting exercise by the parliamentary Finance Committee.
The exercise was almost called off after he appeared before the committee without his original academic documents.
It took the intervention of the committee chair Kimani Kuria to grant the former Principal Secretary one week to present the papers that are currently in the United States.
Thugge was amongst six candidates shortlisted by the Public Service Commission to replace the outgoing Patrick Njoroge whose term is just weeks away from expiry.
Prior to the nomination he has been serving as the senior adviser and Head of Fiscal Affairs and Budget Policy at the State House.
While responding to questions from Kuria on the Arror and Kimwarer dam scandal, Thugge said he was wrongly accused.
If cleared, Thugge is poised to return to the mainstream public service after four years in the cold.
Thugge was hounded out of office as Treasury PS after being linked to the multi-billion Arror and Kimwarer dams scandal in 2019. He was, however, cleared of any wrongdoing in 2021.
"I was wrongly accused, that is why the Director of Public Prosecution freed me of all the charges and I turned state witness. I am still a state witness and I follow the law as required," Thugge told the committee.
His nomination comes at a time the country is grappling with dwindling foreign exchange reserves, a free falling shilling and shrinking borrowing space with the country set to hit its limit in June according to the 2023 Medium-Term Debt Management Strategy by Treasury.
Thugge was put to task on measures he will undertake to stabilise the shilling, which has sharply depreciated against the dollar and a heavy government debt burden, which is threatening to upset years of macro stability.
Butula MP Joseph Oyula sought to know what he would do to tame the domestic borrowing that has now increased surpassing the external borrowing.
Thugge proposed the issuance of locally sold dollar denominated bond with the government offering good rates to ease liquidity.
He said this would give an incentive to those stop stockpiling dollars in banks to release the money into the economy.
At the same time Thugge dismissed allegations that the government-to-government oil deal that was seat to ease pressure on the dollar has not yielded the desired results.
"That arrangement has reduced dollar demand by $500m monthly. So to say that the arrangement hasn't done its work, is quite unfair and an understatement. If it wasn't there, it would have really dipped the shilling's value," said the former PS.
He said he is appointed, he would push for the reduction of banks in the country to improve the liquidity’ status of the sector.
This is after Kajiado West MP George Sunkuya sought to know how mergers and acquisitions influence the performance of financial services in the country.
"If I am governor, we will front merging and reduction of number of banks, so that we end up with a few banks that are properly capitalised, with better liquidity and ones that can grow to regional levels," he said.
If cleared, Thugge will become Kenya's 10th CBK governor after edging out Dorcas Mutonyi, Haron Sirima, Edward Sambili, Nancy Onyango and Adan Mohamed who were also shortlisted by the Public Service Commission.
He said that he is worth Sh450 million which comprises of an apartment in Westlands, a house in Mombasa, a plot in Ridgeways estate on Kiambu Road and another parcel in Thika Greens, as well as company shares and cash equivalents.