Meet the Central Bank Governor Who Isn't Much Impressed by Moneyby and
Kenya's Njoroge surprised by focus on his religious beliefs
Political pressure is one of the biggest challenges of the job
When Patrick Njoroge took charge of the Central Bank of Kenya six months ago, his biggest surprise wasn’t how tough the job turned out to be. It was the attention on his personal life.
Njoroge, who turned 54 on Wednesday, is a member of the Roman Catholic organization Opus Dei, and has shunned most trappings of his post, such as a mansion and new cars. The governor donates part of his income to the church and lives a celibate life in a communal home with six other Opus Dei members in the capital, Nairobi.
“I’ve spent 20 years dealing with economic issues,” Njoroge said in an interview in Cape Town on Nov. 27, his first since taking office in June. “The thing that surprised me was the interest the population had in my personal life. I didn’t expect that.”
Njoroge was relatively unknown when President Uhuru Kenyatta picked him. He came from outside the central bank, having spent two decades in Washington at the International Monetary Fund, most recently advising Deputy Managing Director Mitsuhiro Furusawa.
It’s his experience at the fund, working with crisis-hit countries from Eastern Europe to Africa, that he is now drawing on as emerging markets prepare for turmoil that might follow U.S. monetary tightening.
“One thing we had to deal with right away was anchoring inflation expectations,” Njoroge said. “The exchange rate was depreciating, dropping like a stone, and that was causing a lot of concern among the population. So we moved very aggressively.”
Less than a month after taking office, Njoroge raised the benchmark interest rate by 150 basis points to 11.5 percent and tightened liquidity to bolster the shilling after it fell 8.7 percent against the dollar in the first half of 2015.
The currency declined 0.3 percent to 102.25 against the dollar as of 7 p.m. in Nairobi. Inflation accelerated to 7.3 percent in November from 6.7 percent in the previous month.
His focus has since shifted to banks. In the past three months, he shut two lenders for alleged mismanagement and temporarily banned new licenses.
“A world class central bank needs to be in a strong, vibrant financial sector,” Njoroge said. “We want strong banks that are able to deliver not just savings, but are able to invest and have proper intermediation.”
Njoroge grew up in Thika, a town about 25 miles northeast of Nairobi, the second of eight siblings. He was pushed academically by his father, a Ministry of Education official, and his junior-school teacher mother. His father instilled in him the value of hard work.
“I remember him leaving every single day to go to work,” Njoroge said. “Leaving at 7 a.m., give or take two minutes. Every single day.”
Njoroge won a scholarship to Yale University in the 1990s to do his PhD in economics. He was lectured by Nobel laureate James Tobin and completed a thesis modeling the consequences of financial crises. He joined the IMF shortly after, in 1995.
“He explains very complicated things very easily, very simply,” his former boss, Furusawa, said in an interview. “It’s a very important talent for a central banker.”
Njoroge will need such skills as he navigates what he sees as his biggest challenge in the job: politics. While Kenya’s central bank is autonomous, it’s accountable to the government. The dominance of the state in the economy means fiscal and monetary policies are closely tied, he said.
“There’s a political economy dimension to many things,” he said. “That is something that is much more challenging. It’s not something that I fully appreciated before.”
Njoroge has made it his priority to be open and approachable, and has appeared in Parliament at least four times since he began his role. His predecessor, Njuguna Ndung’u, rarely gave interviews and press conferences in the second half of his term in office.
“Modern central banks need to communicate clearly and credibly,” Njoroge said. “I don’t believe in the old school that the less you see the better.”
While Njoroge doesn’t avoid questions about his religion, he prefers to keep that part of his life private. He declined to say whether he donates his salary to the church.
Andrew Ritho, a spokesman for Opus Dei in Nairobi, which has about 700 members, said that the governor had turned down an official residence, cars and mobile phones and that unmarried members of the congregation usually donate their income to the church. Opus Dei was depicted in Dan Brown’s best-selling novel, The Da Vinci Code, as a secretive and sinister group within the Catholic Church.
“What my religious beliefs shape is me, the way I relate to people, the way I relate to tasks,” Njoroge said, speaking on the same day that Pope Francis was visiting Kenya on a three-nation African tour. “When I deal with people, I respect them. It’s not just a game.”
In a country beset by corruption, where public officials are criticized for being out of touch with the poor, Njoroge has fans.
“It’s not about how much wealth you have, it’s about, what am I doing in my current position to create a change in my economy?” Joshua Oigara, chairman of the Kenya Bankers Association and chief executive officer of Kenya Commercial Bank Ltd., the nation’s biggest bank by assets, said in an interview. “We could never have gotten a better governor.”