Former Central Bank of Kenya (CBK) governor Njuguna Ndung’u was paid a Ksh22 million gratuity at the end of his second four-year term in March, making his one of the best retirement packages in the public service.
Prof Ndung’u served for two terms before retiring, indicating that he may have left with more than Ksh40 million for the two terms he served. His employment terms did not entitle him to retirement benefits as it was contractual and limited to two four- year terms.
“The amount is specified in the letter of appointment and is paid at the end of the contract period. He served a four- year contract, which was renewed with a new letter of appointment,” said a former executive of the bank.
Kenya’s public and private institutions do not give a breakdown of how they remunerate their executives, making it difficult to compare the governor’s gratuity payout with those of other senior officers who have left service recently.
Prof Ndung’u’s time at the helm of the banking sector had mixed outcomes having been named both as the best and worst performing Central Bank governor in Africa during his eight- year tenure. He was credited with making major contributions to expanding financial inclusion, which has now reached 75 per cent and stands way ahead of other African countries.
Progress mainly came through the launch and exponential growth of Safaricom’s mobile money platform M-Pesa amid opposition from commercial banks, who saw it as amounting to a raid into their market. Prof Ndungu’s darkest hour came in what was seen as his slow response to the depreciation of the shilling in 2011, which resulted in an interest rate spike.
He also got entangled in a corruption case having been accused of interfering with the procurement process. The CBK report also showed that the institution paid out Ksh950,908 in acting allowances for the month of August this year.