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Show Notes:
In this Mission Matters Milken Conference Series episode, Adam Torres speaks with Patrick Njoroge, former Governor of the Central Bank of Kenya, about the cascading economic pressures facing African nations today. From the burden of external debt to local unrest fueled by unemployment, Njoroge unpacks how global and domestic challenges intersect—and why structural reforms and global cooperation are urgently needed.
About Patrick Njoroge
Patrick Njoroge served as the ninth Governor of the Central Bank of Kenya from June 2015 to June 2023. During his tenure, he oversaw an overhaul of the banking system, including the launch of Kenya’s first Banking Sector Charter and upgrading CBK’s supervision. In November 2018, Dr. Patrick Njoroge was appointed to the UN Task Force on Digital Financing of the SDGs by Secretary General Antonio Guterres. He also served as Co-Chair of the High-Level Roundtable of the Dialogue on Global Digital Finance Governance, which extended the work of the UN Secretary General’s Task Force and was hosted virtually by the Swiss Government.
Patrick joined the Central Bank of Kenya after a twenty-year career at the International Monetary Fund (IMF). Among other posts, he was Advisor to the IMF Deputy Managing Director from December 2012, where his responsibilities included assisting in overseeing the IMF’s engagement with a large swath of IMF members.
Prior to joining the IMF, Patrick had worked in Kenya as an Economist at the Ministry of Finance and as a Planning Officer at the Ministry of Planning. He holds a PhD in Economics from Yale University, a Master and Bachelor in Economics from the University of Nairobi. He has received several awards and recognitions, including four awards for Africa’s Central Banker of the Year.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, and if you’d like to apply to be a guest in the show, just head on over to mission matters.com and click on Be Our Guest to Apply.
All right, so today’s a very special episode. We have Patrick NJOROGE on the line. He’s the. Former governor of Central Bank of Kenya. And this interview is part of our Milken Global series where we bring on leaders who attended the Milken Global Conference. We bring on VIPs, panelists, speakers, and attendees.
So first off, Patrick, welcome to the show. Thank you for having me at the show. All right, Patrick, so just to get us kicked off here. so you’re at the conference this year, I know, in Beverly Hills the Milken conference.
how did it go? talk to me about your experience. I just loved it. This is a space that I think I benefited from greatly. Yeah. And I think that one of my favorite things about the conference in general, like the whole, Milken conference, other than that is some of the people that you get to meet, like, some of the people that you get to meet that you wouldn’t, like , you meet them from all around the world.
You meet different things, different niches, and the context. And I know this is your first time going, so you probably already noticed when you’re there. I know you, you’ve been to many of the other conferences, IMF and all the other like. Big, big conferences, but this one has kind of like, to me, a little bit of a collegial feel like year after year.
Mm-hmm. You’ll see some of the same people second year, third year after a while. I like to say first year you go, it’s, you know, eyes wide opens, and by third or fourth year your family. I don’t know. That’s just my culture. I look forward to that. You know, I look forward to the next edition of it.
And you know, maybe by then I’ll have had also. Maybe matured my thinking about some of the topics mm-hmm. That were not really front and center of my conversations this year. Well, let’s let’s get into some of these questions too. So coming from your background, what do you consider as the main pressures that African countries are facing currently?
Okay. Adam, that’s a big one. It’s a big question. Big one to open with. I know that’s a big one, but, but that’s okay. I think first to appreciate this, I think there’s several types of shocks and I think the way to look at it is we have just recovered or we had been recovering from the COVID type shocks and then along with other countries in the world.
Africa has had multiple external and internal shocks that have in some sense imperial the recovery but also may cost, may create a sort of a reversal, the gains that we had seen over the last two decades. So what are these shocks? And I begin with the external first, of course, the rising trade tensions.
Mm-hmm. That has been around, of course. We have seen a lot of development of that discussions, but I think that is front and center of all the concerns that anybody has at the, even at the Milton Conference, this was the big item. Now, of course, around that you have a lot of other.
Uncertainties. And somebody said, you know the level of uncertainty has. It is completely unprecedented. So not only on trade, but also for instance in the us the issue of the fiscal stance. Now, of course we have the new big bill that is going through the various approval processes and then of course the deregulation.
And a big one that we have seen more recently is immigration. Now those items obviously relate to the us. Particularly but not only the US because the US is a key player, well, is really the most important economy or driver of the global economy. So that’s, so that’s one set of shocks.
Then of course you have the geopolitics. Mm-hmm. And this has worsened over the last month, as you can imagine. The conflicts that we had seen, we’d seen Ukraine, we’d seen Gaza, but now we have Iran. And the potential of worse, you know, a wild war or whatever else it is. So that is a big one. there’s also the, at this moment, or at this time, the African nations are facing what I call exorbitant terms.
From the capital markets. So they are unable to borrow at you know, appropriate terms. And that we can discuss what that, causes that. But the point is that. These are pressures that obviously apply to most countries around the world. Mm-hmm. Mm-hmm. But they fall disproportionately hard on the developing countries and in particular Africa, so mm-hmm.
That is one set of issues. Secondly. We have the issues of domestic shocks, right? In the African countries, and one of this of course is the limited fiscal space that we have seen. They have limited room for maneuver, but at the same time mm-hmm. There’s the other issue of the debt crisis that has emerged.
2024 was the costliest year in. In more than three decades actually, you need to go back way back before even hip sort of sessions, et cetera to get the same level of death service that the death service burden in our countries Now, it is a crisis. Why? Because it has pushed out. Expenses on, let’s say, or the government, the possibilities of spending on health and education.
So more than half the countries in Africa are spending more on debt, external debt payments than they do on health and education. Mm-hmm. Mm-hmm. That is a major issue. Yeah. That’s alarming, right? Like that’s not Yeah, it’s completely alarming. And then of course you have the issue of the, third item on the domestic side, which is the discontent that is that is being expressed by the population, particularly the youth.
Yeah. Mm-hmm. Because they don’t see opportunities. They don’t see accountability of the government, et cetera. Now, I’m mm-hmm. in Kenya today. well, yesterday really, I mean, there are, there are protests on the streets. Mm-hmm. And a lot of this is really about the discontent of the youth.
they’re realizing or expressing their dislike for, you know, the trend that the policy makers have been doing and all that. So. Those are the general issues. Again, they fall disproportionately hard on the African countries, but at the same time, of course, everything isn’t all you know, all dark and gloomy because 11 of the fastest of the 20 fastest economies in the world are in Africa.
Mm-hmm. Now the trouble is that that still is not providing enough. Oomph, let’s say. Mm-hmm. Opportunities for the, people, right? Mm-hmm. And yes, there’s a lot of opportunities. One can say. If you look, or a lot of potential, if you look at the demographic dividends and resources, but you know, this, need to be baked, I mean mm-hmm.
You can say, well, you know, you have, like, you want to bake a cake, you know, you need flour, you need butter, you need water, you need sugar, whatever. But if they’re just sitting on the kitchen table, you’re not gonna get a much of a kick out of it. So I think those are the concerns. I would want to to sort of flag.
And we do hope that the countries mm-hmm. That this whole issue is reversed in some way, which obviously we can discuss. Yeah. So how do you see these countries kind of reacting to some of these pressures? Now, obviously we talked about multiple, so any of them you wanna pull out? And I know it’s, I know each country’s gonna react a little bit differently, but are there some general themes.
Yeah, I think the first of of this is I mean, to look at the biggest of all items, the biggest of all items relates to the trade shocks. Mm-hmm. And uh, so they have to deal with that let’s say issue. A lot of them have actually begun to indicate their interest in negotiating and coming up with you know, sort of a more consulted, outcome. Mm-hmm. Instead of the one way tariffs or the, unilateral tariffs that have been imposed. I know they have been called something else, but whatever they are it is unilateral and basically there is some discussion there that need to be done political, but it is there. I think we should also understand that for African countries.
Tariffs. a lot of countries, for instance, in Kenya and other countries as well, but Kenya in particular they are exports to the US who are primarily through a preferential arrangement under the so-called African Growth and Opportunity Act. Now that. In effect meant tax free or you know, tariff free entry into the US market.
Now, the minimum tariffs that are being imposed on the African countries are being discussed with the African countries is 10%. So in effect, what you’re saying is that that whole and gore, as we call it, the African Growth Opportunities Act, is. No more, right? Mm-hmm. In any event, this needed to be negotiated ’cause it was coming to an end in September.
But the point I’m making is that whole discussion needs to be had in some ways. Secondly, of course, the, the countries themselves, the African countries need to, they need to then look inside inwardly, you know, stabilize their own economies. Boost confidence. Protect the lives and livelihoods of the weakest, et cetera, strengthen their domestic markets.
In some ways, that is a whole, let’s say agenda, the whole set of agendas that have been there for some time. But the point is. This is the time to, you have no choice now, but to clean your house in particular ways. Thirdly, diversifying. There’s no doubt diversification of trading partners, economic sectors, et cetera, is key, you know, to navigating this space.
I think that is fundamental in many ways. And then, of course, you know, continue pushing on, closing various gaps. Infrastructure, for instance in critical sectors, you think about energy, for instance. And there’s a push now to have 300 more, 300 million more Africans connected to the electricity, basically.
It doesn’t have to be greed, but by the year 2030. Now having said all that, it is important to remember. That we also need to continue to invest in, what are called social capital education health. All these are things that are, I mean, they, one would say they are no brainers. Mm-hmm.
But the fact that they’re being pushed aside by bigger, by other items like debt debt payments is is a problem. Finally, this issue of, debt. I think one of the things that we have been doing is an, is making the case that this is the time for having a conversation with the let’s say the debtors and the creditors need to get together and come up with a sort of a debt.
Relief arrangement for the more with the highly indebted countries that I mean, will continue on this downward spiral and will obviously be problematic for the global economy. So that is one of the, some of the things that can be done, the others, but I wish to stop there. Oh, wow. Well, I’ll tell you what, Patrick, we got a, we got, there’s gonna have to be some more follow up interviews or something on this.
Absolutely. Which I, I know we just scratched the surface on this. So I’m excited to continue to, maybe we break down some of the individual issues. But for today’s episode if somebody wants to follow up and if they wanna connect with you or learn more about your work or follow you on social media or anywhere else, how do they do that?
I’m active on LinkedIn. Mm-hmm. Uh, So you could just search my name on LinkedIn. LinkedIn Patrick Roge. Yeah. And I’m the former Central Bank governor. I’m there, so that should be easy. Mm-hmm. I’m also on Twitter, but I have not been active on Twitter. I mean, really, I used to be one of the most active central bankers on Twitter, but now, oh, we call it X now, but whatever it is, the new name, old name.
I’m also there. That is my handle is simple is and my last name and p you know, one word and yeah, and, I’m available on those links so anybody can DM me and and we can take it from there. Perfect. If everybody listening, just so you know, we’ll put some links in the show notes.
So you could just put the, you could just click on the link and head right on over. And speaking of the audience, if this is your first time with Mission Matters and you haven’t done it yet, hit that subscribe or follow button. This is a daily show. Each and every day we’re bringing you new content, new ideas, and hopefully new inspiration to help you along the way on your journey as well.
So again, hit that subscribe or follow button. And Patrick, thanks again for coming on the show. Thank you for having me, and I look forward to meeting you again on this show.
