For Njuguna Ndung’u, he was fired along with 21 other Cabinet Secretaries two weeks ago, marking the end of one of the most difficult positions at the helm of the National Treasury.
Prof Ndung’u, a soft-spoken economist, took over at the Treasury when the country was facing one of its worst dollar shortages and, as fate would have it, he left just as the country was experiencing an unprecedented youth-led anti-government. protest.
Interestingly, Prof. Ndung’u is in charge of the National Treasury, which for first sought for bread tax in a raft of tax measures that have sparked protests across the country as Kenyans take on the government over what is seen as the punitive Finance Bill, 2024.
Parliament will later reject the professor’s push for tax bread, weeks before President William Ruto was forced to reject the Finance Bill, 2024 in a bid to quell protests.
The rejection of the Finance Bill left a gap of Sh346 billion in the budget for the 2024/25 fiscal year, leading to cuts in national and county governments.
But the recognition of the Exchequer broke and debt payment obligations are increasing which best describes the pain of Prof. Ndung’u in one of the most lucrative Cabinet positions in the country.
“In fact, we are having trouble paying our salaries, our salaries are in arrears. Just imagine. But we cannot pay our external debt because our credibility will be damaged. Debt takes its first toll,” he told the Parliamentary Committee on Finance and National Planning in December last year.
Six months later, billions of dollars in World Bank loans helped Kenya pay off the $560 million Eurobond balance that matured last month. This is a big boost that gives breathing space to Prof Ndung’u.
The Treasury had in February this year admitted to having jitters about Kenya’s ability to settle Eurobonds due to the wobbling shilling and dollar shortages.
In March, Prof Ndung’u acknowledged the difficult balancing act he faced when trying to raise his income while not pocketing Kenyan workers’ pay slips.
“The second point is that we need economic recovery to generate higher taxes because now, the spirit, the current economic structure and the economic spirit is too little to support additional taxes,” he said at the 12th African Fiscal. International Monetary Fund Forum.
For workers and businesses, Prof Ndung’u is the face of punitive taxes that threaten the livelihoods of millions of Kenyans.
The ugly side of his tax push grew in the middle of last month when Kenyans, led by the youth, took to the streets in protests that ultimately led to the withdrawal of the Finance Bill, 2024.
One of Prof Ndung’u’s first tasks when he took over at the Treasury was to address the dollar shortage that is threatening many sectors and businesses.
He was part of the team that brokered a government-to-government import deal with Saudi Aramco, Abu Dhabi National Oil Company and Emirates National Oil Company in March 2023, which will allow Kenya to import fuel with a credit period of 180 days.
The fuel deal, despite many unanswered questions, has been key to reducing monthly demand for the greenback and strengthening the shilling below 130 units to the dollar from a record low of 160 units earlier this year.
Under Prof Ndung’u’s watch, Kenya breached the Sh10 trillion debt ceiling in May last year. This after loans reached Sh10.027 trillion as a borrowing spree left the Treasury chief with more questions than answers.
MPs a month later threatened to impeach him for failing to honor parliament’s summons and delay in paying the same share to the 47 district governments.
Prof Ndung’u’s 22 months at the National Treasury from September 2023 until he left two weeks ago was a firefighting exercise.
Like other public servants, he hopes to emulate his most successful stint at the Central Bank of Kenya (CBK) under the leadership of the National Treasury.
Prof Ndung’u’s tenure as CBK governor from February 2007 to May 2015 was described by many as a success, with market observers praising his legacy of financial services regulation, monetary policy and overseeing stability following the post-election violence of 2007-08. .
As fate would have it, however, a combination of factors, including economic hardship and pressure Dr. Ruto to act and restore hope for Kenyans, claiming a position at the helm of the country’s economic policy office.
As his successor, John Mbadi, prepares to take over, Prof. Ndung’u can enjoy a good night’s sleep away from the headaches of trying to stabilize the economy whose signs of recovery seem to be derailed by active youth-led protests.
And as was the case when he was State Treasurer, Prof Ndung’u has been keen to avoid the media since his sacking.