Who will succeed Ndulu as BoT chief?

Dar es Salaam. As Bank of Tanzania (BoT) governor Benno Ndulu prepares to leave office early next year, the inevitable question is: who will succeed him in one of the most powerful jobs in the country?

Analysts consider recent BoT appointments as an important clue as to who President John Magufuli will pick to be the next head of the central bank.

Prof Ndulu’s tenure as the sixth BoT governor is about to end in line with the requirements of the Bank of Tanzania Act, 2006.

Section 8 (1) of the Act says, “There shall be appointed by the President a Governor who shall, unless he dies or resigns or vacates or is removed from his office for good cause or is disqualified, hold office for a period of five years and shall be eligible for a re-appointment.”

Going by Section 8 (2) (d), President Magufuli cannot reappoint Prof Ndulu.

The section says that one will not be appointed as BoT governor if they have already been appointed and served for two consecutive terms.

Prof Ndulu was appointed governor on January 8, 2008 by President Jakaya Kikwete following the sacking of Dr Daudi Balali after an investigation uncovered fraudulent transactions in what came to be known as the EPA scandal. This means that Prof Ndulu will have served two five-year terms by January 8, 2017.

Prof Ndulu was appointed after he had served as deputy governor for five months from July 2007.

President Magufuli appointed two deputy governors – Dr Bernard Kibesse and Dr Yamungu Kayandabila – in May, this year, prompting speculation that one of them will be promoted to succeed Prof Ndulu in January.

“I strongly believe that one of the two will be promoted to governor when Prof Ndulu’s tenure officially expires, but it should be taken into account that the President retains the prerogative to pick somebody from outside BoT,” a source within BoT told The Citizen on condition of anonymity.

Dr Kibesse is responsible for financial stability and deepening (FSD), while Dr Yamungu Kayandabila is in charge of economic and financial policies (EFP).

Prior to his appointment as BoT deputy governor, Dr Kayandabila served as permanent secretary in the Ministry of Lands, Housing and Human Settlements Development. He holds a doctorate in economics from the University of Dar es Salaam.

Dr Kibesse was an expert in economic and finance issues at BoT before his elevation. He holds a doctorate in financial engineering and macroeconomics from Claremont Graduate University in the United States.

In January 2016, President John Magufuli appointed Mr Julian Raphael as new deputy governor responsible for administration and internal controls (AIC).

According to the Bank of Tanzania Act, 2006, people to be considered for the position of BoT governor must have at least a university degree with not less than 15 years’ experience in the fields of economics, banking, accountancy, finance or law. Another requisite attribute is previously serving in a senior managerial position in either State or private institutions or international organisations.

Prof Ndulu will be remembered for presiding over strong economic growth averaging seven per cent and bringing down the annual inflation rate to single digits from a peak of 20 per cent in December 2011. He is also credited with rebuilding public trust and confidence in BoT after Dr Balali’s unceremonious sacking.

It was during Prof Ndulu’s tenure that BoT became transparent, with the boss himself routinely briefing the media on various issues of economic interest.

Prof Ndulu also earned a reputation for resisting political interference in BoT’s operations.

Even at the height of the Tegeta escrow scandal, Prof Ndulu remained steadfast. He refused to be manipulated for the benefit of a clique of powerful politicians and some unscrupulous businesspeople.

He is on record as having challenged the Attorney General on the legality of transferring $122 million from the Tegeta escrow account at BoT to the account of Pan Africa Power (PAP) Solutions at Stanbic Bank.

Prof Ndulu reportedly demanded proof that Independent Power Tanzania Limited (IPTL) and Tanesco had resolved their dispute on capacity charges, which led to arbitration.

He wrote an eight-page letter to former Attorney General Frederick Werema, which was copied to former Energy and Minerals permanent secretary Eliakim Maswi, demanding proof that PAP had lawfully acquired 70 per cent of IPTL.

But, according to documents seen by The Citizen, neither Mr Werema nor Mr Maswi provided any concrete evidence that PAP legally bought a 70 per cent stake in IPTL from the Malaysian firm Merchmar Berhard.