CENTRAL BANK OF KENYA
Speech by
PROF. NJUGUNA NDUNG’U, CBS
GOVERNOR, CENTRAL BANK OF KENYA
During the opening ceremony of the
JOINT KENYA SCHOOL OF MONETARY STUDIES (KSMS) AND
COMESA MONETARY INSTITUTIE (CMI) SYMPOSIUM FOR
CENTRAL BANKS’ HUMAN RESOURCE DIRECTORS
Kenya School of Monetary Studies
January 24, 2012

HR Directors here present;
Coordinator of CMI, Mr. Ibrahim Zeidy and Specialists;
Distinguished Speakers;
Invited Guests:
It is my pleasure to preside over the opening ceremony of this HR Symposium,
the first of its kind in the region, jointly organized by the Kenya School of
Monetary Studies and the COMESA Monetary Institute (CMI). This is the first
meeting and KSMS are hosting. We thank COMESA for having faith with CBK
to deliver DMI for policy conveyance. At the onset, let me take this
opportunity to extend a warm welcome to all participants from the COMESA
Region and speakers from different parts of the world who have found time
and joined us today. Please feel very welcome and I trust you will find some
time to enjoy the wonderful facilities available here at the School and enjoy
some of the beautiful and fascinating sceneries of Kenya.
Ladies and Gentlemen: The 2008 global financial crisis, coupled with the
ever changing macroeconomic environment presented a complex financial and
economic global landscape that was a challenge to central banks the world
over. It therefore became clear that although the core mandate of central
banks remains price and financial system stability, there should be
coordination of regulatory structures across the financial system in totality.
The idea is that we should not impose more regulation but better regulation.
What does better regulation entail? It is a system that:
Can readily identify weaknesses and emerging vulnerabilities
Is capable of analyzing risks and so adequately pricing risks
Provides appropriate incentives (penalties) to induce prudent behavior
in the market place
Building strong institutions that can withstand shocks and give
confidence to the market: strong institutions of the regulated and strong
institutions of the regulator

These pillars hinge on HR capital availability and application. The challenges
call for enhanced human capital development to cope with this changing
dynamic world
As HR Directors, I want to encourage you to formulate capacity development
initiatives to equip staff with necessary skills and competencies to effectively
manage these challenges in a manner that guarantees a balance between
efficiency and stability.
Ladies and Gentlemen: For maximum impact, these initiatives must be
accompanied by effective institutional governance oversight arrangements - a
responsibility over which you as HR Directors have a direct contribution. As
you deliberate on the important factors driving central banks in the 21st
century, therefore, please pay attention to the need to distinguish between the
external aspects of governance (mandate and accountability) and the internal
ones (structure, management and staffing).
Staff, at all levels must understand the business of central banks and
understand the environment in which banks operate for effective performance
and service delivery in the fulfillment of central bank’s core mandate. Ladies
and Gentlemen, one main issue that may need to remain under closer focus
throughout this three day Symposium is the daunting task Central banks face
as they prepare to enter an era of institutional and modernization reforms
arising from changes in government policies and changes in the global
financial markets. For those of you who manage human resource, you may
need to seek answers to the following questions:
How will duties of central banks change with anticipated global
development and global responsibilities?
How have demands on central banks changed – nationally and
expectation?
What capabilities need to be built?
What can Human Resource do to facilitate the desired changes and
ensure Central Bank executives have the right set of skills at all levels?

Central banks’ modernization to conform to the ever-changing business
environment and benchmarking against best practice is no longer an option.
These changes will continuously take central banks into new horizons that
bring forth both opportunities and threats that we need to mitigate against.
Ladies and Gentlemen: In April 2011, I presided over a similar conference
organized by the Indian Institute of Banking and Finance. At that event, I
acknowledged the importance of such platforms for enabling banks to not only
share experiences, but also to exchange ideas on innovations and other
emerging issues that require the preparation of bank staff to cope with the ever
evolving trends in the global financial scene. I therefore challenged
institutions with similar mandate to embrace such platforms as an avenue for
bringing together HR practitioners and policy makers in the banking sector to
share ideas on innovations that require proactive HR training and
development. I am therefore very pleased that KSMS together with the CMI
took up the challenge to organize this Symposium as a forum for participants
to reflect and debate current and emerging HR challenges that are likely to
impact on the performance and service delivery of central banks in the region.
Ladies and Gentlemen: There are a number of salient HR issues that are of
concern to central bank operations and performance in the 21st century. Let
me list them:
1. Regional Integration and Capacity Development – As you are
aware, the Common Market for Eastern and Southern Africa (COMESA)
regional integration process is progressing well. Milestones achieved so
far include the establishment of the COMESA Monetary Institute,
currently hosted here at the Kenya School of Monetary Studies in
recognition of capacity building as one of the key pillars necessary for
achieving succesful integration. Partner central banks have identified
the need to revise the frameworks governing HR policies and strategies

in line with international best practice. The call for the establishment of
an integrated framework for a holistic approach to capacity building
among central banks in COMESA is therefore a pertinent one.
Implementation of such an approach will enable regional banks to
realize greater economies of scale by taking advantage of regional
institutional and human resources. Capacity building must, therefore,
take a unified approach, with regional central banks coming together to
pool resources and take advantage of regional diversity to achieve
greater efficiency in organizational performance.
2. Performance Management and Talent Development –
Traditionally, central banks have had a multi-generational workforce
with the older segment forming the majority of the workforce. HR
managers are therefore faced with the challenge of balancing the
demands of the older workforce with that of the younger workforce
using recognized management principles. The younger workforce comes
ready to take up responsibilities at a lesser age and experience, but with
high bargaining power due to their knowledge and skills at hand and
techno-savvyness. A clear shift is thus seen in terms of organizational
career commitment to individualized career management. Managing
this set of people is essential for the growth of any industry but
especially for central banks where the composition of the workforce is
rapidly changing. The challenge therefore is on the need to develop
individuals who have performance potential on the basis of past record
and knowledge-based expertise while at the same time tapping into the
expertise of the younger generation without compromising staff morale.
Furthermore, the hired for life mentality of the past is fast becoming
obsolete as workers increasingly change employers. HR must therefore
place emphasis on proper work-life balance, while at the same time
motivating staff through continuous learning opportunities and positive
feedback.

3. Managing Change - Organizations are getting more and more
technologically oriented. The banking sector particularly, has undergone
revolutionary changes enabled by technology. In the Central Bank of
Kenya, for example, a number of technological innovations have been
implemented. The success of these interventions is no doubt heavily
dependent on managing the people issues surrounding the process. In
order to realize acceptance at all levels in the organization, HR has a
major role in preparing the workforce to understand and endogenize the
technological changes.
4. Human Resource - The success of any organization depends on the
resources it has, one of them being human capital. This boils down to
recruiting the best, developing, managing the best and devising an
incentive mechanism for retention and career progression.
The success of central banks in terms of service delivery and
achievement of core mandate to the expectations of governments, the
market and other stakeholders, is hinged on appropriate governance
structures and practices that guarantee professionalism in policy
decision-making.
A quick look at the Symposium programme, Ladies and Gentlemen,
confirms that the organizers have identified some of these critical
elements that are required to drive regional central banks through the
next decade and beyond. Adequately themed ‘Driving Central Banks
Through the 21st Century’, the Symposium brings together
knowledgeable speakers from across different sectors including central
banks, corporate entities and academic institutions from the continent
and beyond. I therefore have no doubt that this Symposium will offer
cutting edge or frontier experiences and lessons learnt on strategies for
confronting the challenges now facing several HR Departments in
Central Banks.

Ladies and Gentlemen: In the course of your deliberations, please take
time to look into some of the following issues and come up with appropriate
recommendations:
Identify gaps in core competency areas of human resource
development and management in the financial sector in general and in
regional central banks in particular.
Propose areas of regional cooperation and strategies for forging
partnerships with our development partners which will allow for
effective coordination of interventions in capacity building.
Establish, preferably an annual, forum for discussing issues
and processes, sharing experiences, ideas and best practices related
to capacity building, creating awareness and mobilizing resources for
further improvements on capacity for growth in the region.
Establish an integrated framework for a holistic approach to
capacity building for central banks within COMESA. This will
support the financial markets in the COMESA Region with HR capacity
building blueprint.
With these few remarks, Ladies and Gentlemen, it is now my pleasure to
declare this Symposium officially open and wish you fruitful deliberations.
Thank you.