NAIROBI: Kenya is finalising laws to make it easier for foreign banks to operate in the country, and wants to host a Chinese currency clearing centre, replicating Qatar’s model, as it bids to become a regional financial hub.
Finance Minister Henry Rotich also said yesterday that the appointment of a new central bank governor was close, with a shortlist of three candidates submitted to President Uhuru Kenyatta, but the process may not be completed until after a month-long parliamentary recess starting on May 1.
The new legislation for banks would enable international lenders with operations in Kenya to use courts in London and other international arbitration to settle commercial disputes, Rotich said moves seen as vital to reassuring investors.
“We are moving fast,” said Rotich, adding that a draft of the laws should be ready within three months.
The finance minister signed a deal with Qatar’s government this month outlining the state’s support for Kenya’s plans to build a financial centre in Nairobi, mirroring Doha’s international financial centre.
Experts involved in Doha’s development would help Kenya establish policies and laws to allow international banks to operate more easily.
Kenya has set up a secretariat to spearhead the plan, which has also drawn on the City of London as a model.
To succeed in the long-mooted plans, experts say Kenya has to overcome issues such as a lack of an effective legal system, deficient company and land registries and a limited number of agreements with neighbours to avoid double taxation.
Kenya aims to learn from the Qataris on setting up a clearing house for China’s yuan currency, also known as the renminbi.
“Ultimately, having set up the international financial centre, we will begin to also host the renminbi clearing house for Africa,” the minister said, referring to a plan to put Kenya at the heart of Africa’s financial dealings with China.
Qatar launched the first Chinese yuan clearing house in the Middle East in April. In the past Chinese officials have suggested Kenya could host such an operation.On the next central bank chief, Rotich said the timing would largely depend on parliament, whose recess runs May 1 to June 8.
“The interviews have been finished and the interview results have been prepared for President Kenyatta,” he said, adding that the president would pick from the shortlist and parliament would approve the choice.
Benjamin Langat, chairman of parliament’s finance committee which will vet the nominee, said the president could call a sitting during the recess. Parliament is dominated by Kenyatta’s Jubilee coalition and is expected to back his choice.Seven out of 10 economists polled last month said they expected the top job to go to Haron Sirima, the deputy governor who is currently acting governor.
