Final Report of the Parliamentary Select Committee on the Decline of the Kenya Shilling Against Foreign Currencies - February 2012

8/18/2019 Final Report of the Parliamentary Select Committee on the Decline of the Kenya Shilling Against Foreign Currencie…

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KENYA NATIONAL ASSEMBLY

Tenth Parliament – Fourth Session

EPO T OF THE

PA LIAMENTA Y SELECT COMMITTEE ON THE DECLINE OF

THE KENYA SHILLING AGAINST FO EIGN CU ENCIES

Clerk’s ChamersParliament Buil!in"s

NAI#OBIFeruar$% &'(&


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P EFACE

Mr. Speaker Sir,

1.1 On Wene!a", N#$e%&er 1'() *+11, #--#in/ a M#(i#n in ()e

H#0!e &" ()e H#n Aan Ke"nan, M.P. T)e H#0!e re!#-$e (# e!(a&-i!)a Par-ia%en(ar" Se-e( C#%%i((ee #n ()e e-ine # ()e Ken"aS)i--in/ a/ain!( #()er 0rrenie!.

1.* Mana(e # ()e Se-e( C#%%i((ee 2

1.*.1 T)e %ana(e # ()e Se-e( C#%%i((ee a! per ()e re!#-0(i#na!34

i) T# #%pre)en!i$e-" in$e!(i/a(e an in50ire in(# ()e a0!e!# ra!(i an !(ea" e-ine # ()e Ken"a !)i--in/ a/ain!( #rei/n0rrenie!6ii) T# %ake re#%%ena(i#n! #n ()e a" #rar.

1.7 C#n!e50en(-", ()e C#%%i((ee a! re50ire (# !0&%i( a rep#r( (# ()eH#0!e i()in '+ a"!. T)e C#%%i((ee !0&!e50en(-" !#0/)( e8(en!i#n#r ()ir(" a"! )i) a! /rai#0!-" /ran(e &" ()e H#0!e.

1.9 M#(i#n Se((in/ Up ()e Se-e( C#%%i((ee an i(! C#%p#!i(i#n

THAT, aare ()a( Ken"a i! ()e Ea!( Aria:! &i//e!( e#n#%" anre/i#na- e#n#%i )0&, n#(in/ ()a( Ken"a i! ain/ a !pike in in-a(i#nan )er 0rren" )a! p-0%%e(e (# i(! eake!( -e$e- an i! n#re#re a! ()e #n(inen(:! #r!( per#r%er ()i! "ear e!pi(e &ein/air-" !(a&-e #r ()e -a!( #0r eae!, #nerne ()a( ()e Cen(ra- ;ank# Ken"a )a! %ain(aine a e ()e !)i--in/, ()e e#r(! &" ()e M#ne(ar" P#-i" C#%%i((eean ()e in(er$en(i#n! &" Trea!0r" )a$e n#( !0eee in are!!in/()e !i(0a(i#n, aare ()a( ()i! epreia(i#n (ren )a! %ae %an"Ken"an! an #rei/n in$e!(#r! in0r %a!!i$e -#!!e! an ()e #!( #

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(ran!a(in/ &0!ine!! 0n0-" e8pen!i$e, ()i! H#0!e re!#-$e! (##n!(i(0(e a Se-e( C#%%i((ee (# #%pre)en!i$e-" in$e!(i/a(e ()ea0!e?!@ # ()e ra!(i an !(ea" e-ine # ()e Ken"a S)i--in/ a/ain!(()e #rei/n 0rrenie! an %ake re#%%ena(i#n! #n ()e a"#rar an ()a( ()e C#%%i((ee !)a-- #%pri!e ()e #--#in/ an

!)a-- (a&-e i(! rep#r( i()in !i8(" a"! # i(! app#in(%en(.

1) H#n. AanKe"nan, M.P. 2 C)airper!#n2) H#n. Ra)e- S)e&e!), M.P. 2 ie C)airper!#n3) H#n. S)akee-S)a&&ir, M.P.4) H#n. C)ar-e! Ki-#n>#, M.P.5) H#n. ;enBa%in Lan/a(, M.P.6) H#n. Pe(er Kii-0, M.P.7) H#n. M#!e! Le!#ne(, M.P.

8) H#n. E%i-i# Ka()0ri, M.P.9) H#n. ;enei( G0na, M.P.10) H#n. S)aki-aA&a--a, M.P.11) H#n. N(#i()aM:Mi()iar0, M.P.12) H#n. Mar(in O/in#, M.P.13) H#n. Y0!0 C)an>0, M.P.14) H#n. ?Dr.@ Era!(0! M0rei()i, M.P.15) H#n. A&0- ;a)ari, M.P.16) H#n. Aan ;are D0a-e, M.P.

17) H#n. ak#"#Mii#, M. P.18) H#n. C)ri! Oke%#, M. P.19) H#n. ?Pr#.@ P)i-ip Ka-#ki, M. P.

1. Mee(in/!

1..1 T)e #%%i((ee !e( #0( (# a)ie$e i(! %ana(e &" )#-in/ a !erie! #%ee(in/! () in(erna- an i() !(ake)#-er! #%pri!in/ #in!(i(0(i#n!, ini$i0a-!an e8per(! in ()e in0!(r". In (#(a-, ()eC#%%i((ee #n$ene (en(" !e$en ?*@ !i((in/! i() ()e re-e$an(G#$ern%en( a/en(! an #()er !(ake)#-er! in ()e inania- !e(#r.

1.' S0&%i!!i#n! (# ()e C#%%i((ee

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1.'.1 T)e Se-e( C#%%i((ee reei$e () #ra- an ri((en !0&%i!!i#n!r#% 7+ !(ake)#-er! in ()e in0!(r". T)e!e #%pri!e # ()e#--#in/34

?i@ G#$ern%en( A/enie!

Cen(ra- ;ank # Ken"a Mini!(r" # Finane Par-ia%en(ar" ;0/e( Oie, Ken"a Na(i#na- A!!e%&-" Ken"a Re$en0e A0()#ri(" Ta!k#re #n ()e De-ine # ()e Ken"a S)i--in/ ?+ie # ()ePri%e Mini!(er@ Ener/" Re/0-a(#r" C#%%i!!i#n Capi(a- Marke(! A0()#ri(" Ken"a T#0ri!% ;#ar

Ken"a P#r(! A0()#ri(" Ken"a In!(i(0(e #r P0&-i P#-i" Re!ear) an Ana-"!i!?KIPPRA@ E8p#r( Pr#%#(i#n C#0ni- ?EPC@ Ken"a In$e!(%en( A0()#ri(" ?KenIn$e!(@ S)##- # E#n#%i!, Uni$er!i(" # Nair#&i

?ii@ C#%%eria- ;ank!

E50i(" ;ank Li%i(e

Ken"a C#%%eria- ;ank Li%i(e C##pera(i$e ;ank# Ken"a Li%i(e Ci(i;ankLi%i(e Fa%i-" ;ank Li%i(e ;ar-a"! ;ank# Ken"a Li%i(e CFC S(an&i ;ank H#0!in/ Finane C#%pan" Ken"a Li%i(e S(anar C)ar(ere ;ank L( Ken"a ;anker! A!!#ia(i#n

?iii@ E#n#%i E8per(!

Dr. Da$i Nii 4 E#n#%i!( Mr. Mia) C)e!ere% 2 F#r%er G#$ern#r # ()e C;K Dr. T)#%a! Ki&0a 4 F#r%er Dep0(" G#$ern#r # ()e C;K

?i$@ O()er S(ake)#-er!

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F#rei/n E8)an/e Dea-er! A!!#ia(i#n Ken"a Pri$a(e Se(#r A--iane ?KEPSA@ C#n!0%er! Feera(i#n # Ken"a In!(i(0(e # E#n#%i Aair! ?IEA@

N#(e3 Na(i#na- Se0ri(" an In(e--i/ene Ser$ie ?NSIS@ anC#%%eria- ;ank # Aria ere !en( -e((er! # in$i(a(i#n &0( i n#(appear.

SUMMA Y OF FINDINGS

*.1 T)e C#%%i((ee reei$e a ran/e # ()e a0!e! # ()e a-- # ()e Ken"a!)i--in/ )i) ()e #%%i((ee i$ie! in(# e#n#%i, )0%an anin!(i(0(i#na- ai-0re!. T)e e#n#%i a0!e! !0) a! ()e ie 0rren(

a#0n( eii(, E0r# ri!i!, -ar/e i%p#r( &i-- # n#n4e!!en(ia-#%%#i(ie!, ()e Ara& Sprin/, are !(i-- in p-ae e$en a(er ()e !)i--in/re#$ere i(! $a-0e in Dee%&er *+11. T)e C#%%i((ee ()ere#re>er#e #n in!(i(0(i#na- an )0%an ai-0re!. T)e!e a(#r! in-0ep#-i" inei!i$ene!! an ina(i#n # ()e C;K )i) )a! apai(" (#!(#p ()e !-ie, !pe0-a(i$e a(i$i(ie! # !#%e ;ank! an ini$i0a-!, anina(i#n &" ()e Mini!(r" # Finane )i) a-!# )a! p#er! in -a (#in(er$ene i C;K ann#( a(. T)e!e a(#r! are #0(-ine a! #--#!3

2.1.1 P#-i" inei!i$ene!! an ina(i#n # ()e Cen(ra- ;ank # Ken"a ?C;K@

4 T)e C#%%i((ee in! ()e #--#in/ a(! a! ire(-" -inke (# ()e !-ie# ()e !)i--in/3

(i) Crea(in/ #pp#r(0ni(ie! #r ar&i(ra/e(ii) Fai-0re (# e(e( an arre!( !pe0-a(i$e a(i$i(ie!(iii) Un-ear C#%%0nia(i#n (# inania- %arke(!(iv)Inee(i$ene!! # ()e M#ne(ar" P#-i" C#%%i((ee ?MPC@(v) Inae50a(e p#-i" re!p#n!e!(vi);e-a(e in(er$en(i#n &" ()e C;K

2.1.2 G#$ern#r # ()e C;K 4 T)e C#%%i((ee in! ()a( ()e C;K G#$ern#r3

(i) Di n#( rea( in /## (i%e (# ()e pr#&-e% # !)arp e-ine #()e !)i--in/ )i) (ri//ere a pani an er(i-e /r#0n #r

)#arin/ in #rei/n 0rrenie! an !pe0-a(i#n.

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(ii) Kep( C;K Di!#0n( Win# in(ere!( ra(e! &e-# ()e in(er&ank ra(ean Trea!0r" &i-- ra(e! ()a( en#0ra/e ()e #%%eria- ;ank! (# &"4pa!! ()e in(er&ank %arke( (# rr# r#% ()e Di!#0n( Win#.

(iii) A--#e #%%0nia(i#n &reak#n &e(een ()e C;K an ()e ;ank!.(iv) T)e G#$ern#r p-a"e #n ()e /ra$i(" # ()e pr#&-e% (# ()e e8(en(

()a( in $ari#0! in!(ane! an #r0%!, )e a! 50#(e !a"in/ ()a( )e#0- n#( in(er$ene in ()e #rei/n e8)an/e %arke(.

(v) ;ein/ -e!! ani en#0/) i() in#r%a(i#n (# Ken"an! an e$en (#()i! Se-e( C#%%i((ee. F#r in!(ane, ()e G#$ern#r -ai%e p0&-i-"()a( !#%e ;ank!, )i) )e re0!e (# na%e, ere re!p#n!i&-e #rar&i(ra/e an )#arin/ # #rei/n 0rrenie!.

(vi) O$er!eein/ ()e ri!e # ()e C;R ra(e (# 1, )ene #a!i#nin/Ken"an! )ea$" in(ere!( ra(e pa"%en(!.

(vii) I! !50are-" re!p#n!i&-e #r rea(in/ ()e #pp#r(0ni(" #r ;ank! an

ini$i0a-! (# %ake 50ik %#ne" ()r#0/) !pe0-a(i#n an )#arin/.(viii) Hi! ann#0ne%en( an re-ea!e # C;K ir0-ar (# &"pa!! ()e ;ankin/

!"!(e% an ea- ire(-" i() &0"er! #r !e--er! # #rei/n e8)an/e,a-()#0/) re$er!e, a! in #%p-e(e i!re/ar # ()e inania-!(r0(0re! an #0- )a$e #pene #pp#r(0ni(ie! #r ra(i#nin/ ##rei/n e8)an/e, #a!i#ne para--e- %arke(! (# ()ri$e.

2.1.3 Ar&i(ra/e &" #%%eria- ;ank! 4 ari#0! inania- p-a"er!, in-0in/#%%eria- ;ank! par(iipa(e in ar&i(ra/e. A-()#0/) ()i! i! n#( i--e/a-

an i! a #%%#n &0!ine!! pra(ie, ()e C#%%i((ee #&!er$e ()a(;ank! e8p-#i(e -##p)#-e! in ()e inania- %arke( (# rr# 0n!r#% ()e C;K ()r#0/) ()e Di!#0n( Win# an 0!e ()e 0n! (#pr#i( r#% #rei/n e8)an/e (rain/ #r (# &0" G#$ern%en( !e0ri(ie!.

2.1.4 C#%%eria- ;ank! i() inrea!e #rei/n e8)an/e (rain/ a(i$i(" 4T)ree ;ank! na%e-"6 CFC S(an&i ;ank, S(anar C)ar(ere ;ank, anCi(i&ank ere rep#r(e (# )a$e )a inrea!e #rei/n e8)an/e(rain/ a(i$i(". C;K r#(e (# ()e% !eekin/ e8p-ana(i#n an

-ariia(i#n.

2.1.5 S0!pen!i#n # !peii inania- in!(i(0(i#n! r#% par(iipa(in/ in

()e in(er&ank %arke( #r #rei/n e8)an/e %arke( 4 ()e G#$ern#rrep#r(e ()a( CFC S(an&i ;ank )a -#0(e ()e /0ie-ine! i!!0e #nO(#&er 17, *+11 re/arin/ ()e (en#r # #rei/n 0rren" !ap!. T)e;ank a! !0!pene r#% par(iipa(in/ in ()e !ap %arke( #r 7+ a"!

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an a! a-!# pena-i>e K!). 1 %i--i#n in -ine i() ()e ;ankin/ A(?Se(i#n *?a@ # Le/i!-a(i#n N#. # 13 T)e ;ankin/ ?Pena-(ie!@?A%en%en(@ Re/0-a(i#n! 1@.

2.1.6 C#%%eria- ;ank F#rei/n E8)an/in/ )#-in/! 4 T)e #%%i((ee

in! ()a( 1* %aB#r ;ank! )e- . # (#(a- #rei/n a!!e(! &"Sep(e%&er *+11.

2.1.7 C#n-i( # In(ere!( 2T)e C#%%i((ee in! ()a( (#p %ana/e%en(an ar %e%&er! in !#%e ;ankin/ in!(i(0(i#n! )#- ar p#!i(i#n!in ke" p0&-i p#-i" #r/an! )i) are (a!ke i() %aB#r e$e-#p%en(pr#Be(! in ()e #0n(r". T)i! i! a !#0re # i!ae(i#n an !0!pii#na%#n/ ;ank! )i) ee- 0n0e a$an(a/e i! /aine &" !0) ;anke8e0(i$e!. F#r in!(ane, ()e CEO # E50i(" ;ank )air! ()e i!i#n

*+7+ ar )i) in ()e C#%%i((ee:! #pini#n an ()a( # #()er;ankin/ in!(i(0(i#n! pr#$ie! 0n0e a$an(a/e #n pre!en( an 0(0rein#r%a(i#n a( in-# # 0n! (#ar! inra!(r0(0ree$e-#p%en(. Si%i-ar-", ()e )air%an # E50i(" ;ank )air! ()eNa(i#na- Oi- C#rp#ra(i#n.

2.1.8 Ken"a ;anker! A!!#ia(i#n 2 T)e C#%%i((ee #0n ()a( ()ein(era(i#n &e(een ()e re/0-a(#r an K;A, )i) i! an in(ere!( /r#0p#r pr#i( !eekin/ ;ank!, a! inappr#pria(e in ree %arke(!. T)i! #pen!

0p #pp#r(0ni(ie! #r #--0!i#n, ar&i(ra/e an !pe0-a(i#n in #rei/n0rrenie!.

2.1.9 Ina(i#n &" ()e Mini!(r" # Finane 2 T)e %ini!(r" # inaneai-e (# e8eri!e ()e pr#$i!i#n! # ()e Cen(ra- ;ank A( ?Cap 91!e(i#n 9@ an (ake a pr#a(i$e r#-e (# (a%e ()e e-ine # ()e !)i--in/.

2.1.10 P##r #rkin/ re-a(i#n!)ip e8i!(e &e(een ()e C;K an #%%eria-;ank!.

2.1.11 Fai-0re &" ()e i!a- an ()e %#ne(ar" p#-i" #r/an! # ()eG#$ern%en( (# (ake (i%e-" #rre(i$e %ea!0re! (# arre!( ()e !-ie #()e !)i--in/ a/ain!( %aB#r 0rrenie!.

2.1.12 Capi(a- F-i/)( 4T)e #0n(r" !0ere api(a- -i/)( 0rin/ ()eperi# )en ()e Ken"a !)i--in/ a! epreia(in/. T)e 0ner(ain(ie!

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a( ()e 0nprei(a&-e e8)an/e ra(e # ()e Ken"a !)i--in/ 0e--ene/a(i$e e8pe(a(i#n! a( ()e e#n#%" an ke" %ar#e#n#%i$aria&-e!.

2.1.13 G-#&a- e#n#%i ri!i!2 T)e C#%%i((ee in! a(#r! e8(erna-

(# ()e #%e!(i e#n#%" %a" )a$e p-a"e a r#-e in ()e e-ine # ()e!)i--in/. T)e!e in-0e E0r# >#ne e&( ri!i!, US e&( ri!i!, an P#-i(ia-e$en(! in ()e Mi-e Ea!( an N#r() Aria. H#e$er, !ine ()e!e#ni(i#n! !(i-- per!i!(, ()e #%%i((ee #n!ier! ()e% n#( (# )a$e &een()e %ain a0!e! #r ()e ra!(i epreia(i#n # ()e !)i--in/.

SUMMA Y OF ECOMMENDATIONS

7.1 On ()e &a!i! # ()e a$e inin/!, ()e C#%%i((ee )a! ran a ran/e

# re#%%ena(i#n! )i) i-- en!0re ()a( 0(0re ri!i! !0) a! ()e!)arp epreia(i#n # ()e !)i--in/ i! n#( rep-ia(e. T)e C#%%i((ee!:re#%%ena(i#n! !pan () e#n#%i an in!(i(0(i#na- )an/e! a!#--#!3

3.1.1 M#ne(ar" P#-i"

(i) G#$ern#r # ()e C;K 2T)e C#%%i((ee in! ()e G#$ern#r:!#n0( an &e)a$i#r in#%pa(i&-e i() ()e )#-er # ()e #ie

# G#$ern#r # ()e Cen(ra- ;ank # Ken"a an ()ere#rere#%%en3

T)e G#$ern#r (ake! re!p#n!i&i-i(" #r a--#in/ ()e !)arpe-ine # ()e !)i--in/. T)e G#$ern#r !(ep! a!ie (# pa$e a" #r ()#r#0/)in$e!(i/a(i#n! T)a( ()e Pre!ien( !)#0- #n!(i(0(e a Tri&0na- (#in$e!(i/a(e ()e G#$ern#r:! #n0(, inapa&i-i(" an

in#%pe(ene (# per#r% ()e 0n(i#n! # ()e #ie a! per ()epr#$i!i#n! # ()e C;K A( Cap 91 !e(i#n 19 ?*@?@ an 19?7@.(ii) Pr#0(i$e #%%0nia(i#n &e(een C;K an inania- %arke(

p-a"er! 4 ()e C#%%i((ee re#%%en! ()a( C;K !)#0- e!i/n ara%e#rk # en/a/in/ i() #rei/n e8)an/e %arke( p-a"er!i()in ()e #nine! # ()e inania- %arke( -a! an re/0-a(i#n!.

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(iii) C#)erene # %#ne(ar" p#-i" 4 T)e C#%%i((ee #0n ()a( ()eC;K %a" )a$e &een #$eren()0!ia!(i a( e#n#%i !(i%0-0!an a-!# %ain(aine ()e -# in(ere!( ra(e re/i%e #r ar (## -#n/,an ()ere#re re#%%en! ()a( ()e C;K !)#0- %ain(ain a#)eren( %#ne(ar" p#-i" a( a-- (i%e! i() a #0! #n prie

!(a&i-i(".

(iv) Ear-" arnin/ %e)ani!% 4 C;K !)#0- p0( in p-ae ()re!)#-! #r(ri//er $a-0e! #r )i) ()e #rei/n e8)an/e !)#0- -0(0a(e in(i%e! # e8(re%e ri!i! an a( )i) ()e C;K #0- %#$e in (#re!(#re !(a&i-i(".

(v) S(ren/()en re!er$e p#!i(i#n # ()e C;K 4 T)a( ()e G#$ern%en(an C;K !)#0- (ake ae50a(e !(ep! (# #!( ()e re!er$e

p#!i(i#n (# a( -ea!( ()e 9 %#n()! # i%p#r( #$er (# !(ren/()eni(! a&i-i(" (# re!p#n (# %arke( $#-a(i-i(".

(vi) En#re%en( # ()e In4D0p-0% 0-e 2 Se(i#n 99A # ()e ;ankin/A( nee! (# &e en#re an 0r()er a%ene (# app-" (# a---#an! 2 () per#r%in/ an n#n4per#r%in/.

3.1.2 Le/a- A%en%en(!

7.1.*.1 S0//e!(e a%en%en(! (# ()e C;K A( !)#0- (ar/e(, &0( are n#(re!(ri(e, (# ()e #--#in/3

(i) P#!i(i#n # C)air an Dep0(" C)air # ()e C;K ;#ar 2A%en%en( (#()e Cen(ra- ;ank A( ?CAP 91 !e(i#n 11 ?1@?a@?&@@ (# pr#$ie ()a( ()eC;K G#$ern#r an ()e Dep0(" G#$ern#r ann#( )air ()e ;#ar #Dire(#r! # C;K )i) i! e8pe(e (# re$ie )i! per#r%ane ina)ie$in/ ()e C;K #re %ana(e!.

(ii)App#in(%en( # ()e G#$ern#r an Dep0(" G#$ern#r 4 T)a( ()e C;KG#$ern#r an Dep0(" G#$ern#r &e rer0i(e ()r#0/) a (ran!paren(an #%pe(i(i$e pr#e!!.

(iii) O$er!i/)( #$er C;K 2In(r#0(i#n # an a%en%en( (# ()e C;K A( (#pr#$ie ()a( ()e C;K G#$ern#r appear! #n a 50ar(er-" &a!i! &e#re are-e$an( Par-ia%en(ar" C#%%i((ee # ()e Na(i#na- A!!e%&-" (#

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e8p#0n #n %#ne(ar" p#-i" an #()er a(i#n! re-a(e (# ()ei!)ar/e # ()e C;K #re %ana(e # prie !(a&i-i(" an inania-!(a&i-i(".

(iv) A0(#n#%" # ()e C;K 2 S(ren/()en ()e a0(#n#%" # ()e (# ar%! #

C;K na%e-", ()e ;ank !0per$i!i#ninania- %arke(! #n #ne )an an%#ne(ar" p#-i" ar% #n ()e #()er.

(v) San(i#n! 4 In(r#0(i#n # a%en%en( (# ()e C;K A( (# pr#$ie #rp0ni(i$e !an(i#n! #n ()e Mana/e%en( # ()e Cen(ra- ;ank #r /r#!!ai-0re in a((ain%en( # i%p#r(an( %#ne(ar" p#-i" #&Be(i$e! #rai-0re )i) #a!i#n! ()e #0n(r" )0/e -#!!e!.

(vi) T)e M#ne(ar" P#-i" C#%%i((ee 2 A%en%en( (# !e(i#n 9?@ # ()e

C;K A( (# pr#$ie #r an e8(ra %e%&er (# ()e MPC # a C;K !(are!p#n!i&-e #r ;ank !0per$i!i#n.

(vii) C#n-i( # in(ere!( 2 T)a( !eni#r %ana/er! an ar %e%&er! #;ank! !)#0- n#( )#- p#!i(i#n! in G#$ern%en( p#-i" #r/an! #rG#$ern%en( #%%i!!i#n! i() ire( i%pa( #n inania- an%#ne(ar" p#-iie!.

3.1.3 S0per$i!#r" O$er!i/)( # Finania- In!(i(0(i#n!

(i) C;K !)#0- e$e-#p (##-! (# eiien(-" %#ni(#r inania- %arke(! 2

Par(i0-ar-" in (##-! (# 50ik-" ea- i() ()e a$er!e ee(! #inn#$a(i#n! in #rei/n e8)an/e (rae! !0) a! ()e E-e(r#ni ;r#kera/eS"!(e%, #rei/n e8)an/e !ap! an arr" (rae!.

(ii) T)a( ()e C;K !)#0- inrea!e ()e !pee an re!p#n!i$ene!! (# %arke(e$e-#p%en(! (# ea- i() rapi-" )an/in/ inania- %arke( &e)a$i#r.

(iii) Inepenen( #ren!i a0i( 4 T)a(6

E()i! an An(i4C#rr0p(i#n C#%%i!!i#n an ()e A0i(#rGenera-:! #ie (# arr" #0( an inepenen( #ren!i a0i( #n()e #pera(i#n! an (ran!a(i#n! # ()e Di!#0n( Win# an

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11/91

#rei/n e8)an/e (rain/ # (e-$e ;ank! )i) )a ()e -ar/e!(#rei/n e8)an/e )#-in/! &" Sep(e%&er *+11. T)e CMA (# #n0( a #%pre)en!i$e in$e!(i/a(i#n # ()eNSE (# e(er%ine !0!pe( api(a- in-#! an #0(-#! r#% ()e;#0r!e an rep#r( (# par-ia%en( i()in + a"! r#% ()e a(e

# a#p(i#n # ()i! rep#r( &" ()e H#0!e.

(iv) e$ie # In(erna- Pr#e!!e! 4 T)a( C;K arrie! #0( an in(erna- a0i( #)a( en( r#n/ in %#ne(ar" #pera(i#n! an ;ank !0per$i!i#n i()a $ie (# re(i"in/ ()e pr#&-e%.

(v) ;ankin/ Pena-(ie! e/0-a(i#n! 2A%en%en(! &e %ae (# ()e C;K A(an ()e ;ankin/ A( in #rer (# re$i!e an en)ane ()e pena-(ie!)i) %a" &e i%p#!e #r &rea) # C;K Re/0-a(i#n! (# -e$e-!

pr#p#r(i#na(e # ()e $a-0e (# ()e ;ank # ()e %a-pra(ie a( ()a(par(i0-ar (i%e. Sine ()e 0rren( a%#0n( # pena-(", K!). 1 %i--i#n i!(## -enien(, ()e C#%%i((ee re#%%en! a %#re e(erren( pena-(" #+ # ()e a%#0n( in$#-$e #r K!). *+ %i--i#n )i)e$er i! /rea(er?re/0-a(i#n * # ()e ;ankin/ ?pena-(ie!@ Re/0-a(i#n!, 1@.

3.1.4 Fi!a- P#-i"

(i) Re0(i#n # ()e 0rren( a#0n( eii( ()r#0/) e8p#r(! pr#%#(i#n.

(ii)P-ain/ (ari! an n#n4(ari &arrier! #n n#n4e!!en(ia- i%p#r(! 4 ()eMini!(r" # Finane !)#0- e8p-#re a"! ()r#0/) ()e re/i#na- (rain/arran/e%en(! (# inrea!e (ari! #n n#n4e!!en(ia- #%%#i(ie! !# a! (#re0e ()e i%p#r( &i--.

(iii) E8eri!e # p#er! pr#$ie 0ner ()e -a 2 T)a( ()e Mini!(r" #Finane !)#0- n#( )e!i(a(e (# (ake p#-i" %ea!0re! i ()e C;K /r#!!-"e$ia(e! r#% i(! %#ne(ar" p#-i" !(a(e%en(.

(iv)S(r#n/ Mar#e#n#%i F0na%en(a-! 4 T)e C#%%i((ee in! ()e C;Kan ()e Trea!0r" -akin/ in !(r#n/ Mar#e#n#%i 0na%en(a-! in ()e#r% # p#-i". ;#() in!(i(0(i#n! appear (# )a$e &een #$eren()0!ia!(ia( e#n#%i !(i%0-0!. T)e C;K a-!# %ain(aine ()e -# in(ere!(ra(e re/i%e #r ar (## -#n/. T)e C;K !)#0- ()ere#re %ain(ain a#)eren( %#ne(ar" p#-i" a( a-- (i%e! i() a #0! #n prie !(a&i-i(".

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12/91

(v) C##rina(i#n &e(een ()e M#ne(ar" an Fi!a- P#-i" In!(i(0(i#n! 4

T)e C#%%i((ee re#%%en! ee(i$e p#-i" ##rina(i#n &e(een()e i!a- an %#ne(ar" a0()#ri(ie!a/enie!.

.7.' Fina--", ()e 0rren( in(ere!( ra(e! # !-i/)(-" #$er 7+ )ar/e &"

&ank! are 0nrea-i!(i, )ar%0- an 0n(ena&-e. T)ere#re, ()eG#$ern%en(, C;K an inania- %arke( p-a"er! !)#0- p0( in p-aee-i&era(e %e)ani!%! (# re0e ()e in(ere!( ra(e (# a#ra&-e ra(e!i()in ()ree ?7@ %#n()! # a#p(i#n # ()i! rep#r( &" ()e H#0!e.

ACKNOWLEDGEMENT

Mr. Speaker Sir,

9.1 T)e #re/#in/ i! a !0%%ar" # ()e Se-e( C#%%i((ee rep#r( #n ()era!(i e-ine # ()e Ken"a S)i--in/ a/ain!( #()er F#rei/n C0rrenie!.T)e C#%%i((ee O&!er$a(i#n!, Finin/! an Re#%%ena(i#n! are ()e#0(#%e # ()e in!i/)(0- !0&%i!!i#n! %ae (# ()e C#%%i((ee &"$ari#0! !(ake)#-er! in ()e Finania- Marke(!, G#$ern%en( A/enie!an i!(in/0i!)e e8per(! in ()e e#n#%i i!ip-ine. I (ake ()i!#pp#r(0ni(" (# ()ank ()e% %#!( !inere-".

9.* Ma" I, #n &e)a- # ()e C#%%i((ee e8(en #0r /ra(i(0e #r ()e

in$a-0a&-e !0pp#r( a#re (# ()e C#%%i((ee &" ()e Par-ia%en(ar"Ser$ie C#%%i!!i#n an ()e Oie # ()e C-erk # ()e Na(i#na-A!!e%&-" (#ar! e8e0(in/ ()e C#%%i((ee:! %ana(e. F0r()er, I i!)(# a!!0re ()i! H#0!e ()a( ()e #&!er$a(i#n! an inin/! #n(aine in()e rep#r( ere 0nani%#0!-" a/ree 0p#n &" Me%&er! # ()e Se-e(C#%%i((ee.

9.7 Fina--", Mr. Speaker, I( i! %" p-ea!an( 0(" an pri$i-e/e, #n &e)a- #()e Se-e( C#%%i((ee #n ()e e-ine # ()e Ken"a S)i--in/ a/ain!(#rei/n 0rrenie!, (# pre!en( ()i! rep#r( (# ()e H#0!e #r a#p(i#n

p0r!0an( (# S(anin/ Orer 11.

SIGNEDJJJJJJJJJJJJJJJJ

HON. ADAN KEYNAN, M.P.

CHAI PE SON

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13/91

DATE3 JJJJJJJJJJJJJJJJJ

T)e ep#r( a! #0n(er!i/ne &" ()e #--#in/ Me%&er! # ()e

C#%%i((ee34

1) H#n. Aan Ke"nan, M.P.2 C)airper!#n2) H#n. Ra)e- S)e&e!), M.P. 2 ie C)airper!#n3) H#n. ;enBa%in Lan/a(, M.P.4) H#n. Pe(er Kii-0, M.P.

5) H#n. M#!e! Le!#ne(, M.P.6) H#n. E%i-i# Ka()0ri, M.P.7) H#n. S)aki-a A&a--a, M.P.8) H#n. N(#i()a M:Mi()iar0, M.P.9) H#n. Mar(in O/in#, M.P.10) H#n. Y0!0 C)an>0, M.P.11) H#n. ?Dr.@ Era!(0! M0rei()i, M.P.12) H#n. Aan ;are D0a-e, M.P.13) H#n. ak#"# Mii#, M. P.

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14/91

CHAPTE ONE

1.+ INT ODUCTION

1.1 T)e Ken"a !)i--in/ )a &een !(a&-e #r near-" a eae, )ar-"

&rea)in/ K!). + (# ()e US #--ar !ine *++7. H#e$er, ()e !)i--in/epreia(e !)arp-" in *+11 (# -e$e-! !een in ()e )ei/)( # ()eG#-en&er/ !ana- in ()e 1+:!. ;" %i4O(#&er *+11, ()e Ken"an!)i--in/ )a epreia(e !)arp-" a/ain!( %aB#r 0rrenie!, )i((in/ a)i!(#ri -# # K!).1+ a/ain!( ()e US #--ar.

1.2 T)e #%&ine ee(! # ri!in/ in-a(i#n an a eakenin/ !)i--in/pre!en(e a (#8i ri!k (# Ken"a:! e#n#%" n#( !een !ine ()e *++e-e(#ra- i!(0r&ane!. Inee, ()e!e pr#&-e%! ra!(ia--" inrea!e ()e

#!( # -i$in/ an %ae -ie 0n&eara&-e #r %aB#ri(" # Ken"an!,in-0in/ p#!in/ a rea- ri!k # e#n#%i !-0%p an a ri!e in p#$er("-e$e-! a! e-- a! ()e n0%&er # Ken"an! ()a( ere prei!p#!e (#e%inen( p#$er(" 0e (# e-ine in p0r)a!in/ p#er. T)i! a! a a0!e# #nern a%#0n/ i(i>en! an ()eir e-e(e repre!en(a(i$e!.

1.3 A! a re!0-(, ()e H#0!e #r%e ()e Se-e( C#%%i((ee (# in$e!(i/a(e ()erapi e-ine # ()e Ken"a !)i--in/. Drain/ r#% ()e M#(i#n, ()erea! #nern ()a( ()e Cen(ra- ;ank # Ken"a )a %ain(aine a


15/91

!#%e a! )i/) a! 7* ()a( are ()rea(enin/ (# (0rn %i-e -a!! %aB#ri("# Ken"an! in(# pa0per!.

1. T)e C#%%i((ee in i(! !i((in/! par(i0-ar-" e8p-#re ()e a0!e! # ()era!(i a-- # ()e Ken"a !)i--in/ ()r#0/)#0( *+11 &0( i() !peii

reerene (# ()e %#!( (0r&0-en( peri#3 Sep(e%&er (# O(#&er *+11.T)e C#%%i((ee a-!# !#0/)( (# ien(i" an" p#-i" ai-0re #r ina(i#na%#n/ ke" in!(i(0(i#n! !0) a! ()e C;K, #r an" ra00-en( an!pe0-a(i$e a(i$i(ie! # C#%%eria-;ank! #r #()er in!(i(0(i#n!.

1. T)e C#%%i((ee )e- !i((in/! (# in$e!(i/a(e ()e rea!#n! #r ()e a-- #()e Ken"a !)i--in/ i() $ari#0! in!(i(0(i#n! an !(ake)#-er! a%#n/()e%, ()e C;K, Mini!(r" # Finane, Ta!k #re a( Oie # ()e Pri%eMini!(er, Capi(a- Marke(! A0()#ri(", Ken"a ;anker! A!!#ia(i#n, ei/)(

C#%%eria- ;ank!, Aae%i an Re!ear) In!(i(0(i#n!, #r%erG#$ern#r # Cen(ra- ;ank an !e$era- e#n#%i e8per(!.

1. T)e!e a(#r! are e8p-#re &e-# in-0in/ !"n()e!i! # inin/! anpre!en(a(i#n! r#% $ari#0! i(ne!!e! )# appeare &e#re()eC#%%i((ee. Speii re#%%ena(i#n! are a-!# p0( #r() (#are!! ()ep#-i" ai-0re! an #()er a(#r! an (# en!0re ()a( ()i! e#n#%ii!a!(er #e! n#( re0r a/ain.

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CHAPTE TWO

SU;MISSIONS TO THE SELECT COMMITTEE

*.+ GOE NMENT INSTITUTIONS AND AGENCIES

*.1 Cen(ra- ;ank # Ken"a ?C;K@

S0&%i!!i#n!

*.1.1 T)e C;K G#$ern#r pre!en(e (# ()e C#%%i((ee ()e ke" a0!e! #r ()ea-- # ()e !)i--in/. A%#n/ ()e!e a(#r! in-0e ()e #--#in/3 ri!in/in-a(i#nar" pre!!0re!, ri!in/ 0e- prie! in #$er 1+ %#n()! peri# a( aprie a$e US 1++, $er" )i/) 0e- i%p#r( &i-- ()a( r#!e r#% 1.*peren( in an0ar" *+11 (# 71 peren( in A0/0!( *+11, )0/e 0rren(

a#0n( eii( # a( 1* peren( (# ()e GDP, E0r#>#ne an US e&(pr#&-e%! ()a( #n(ri&0(e (# in!(a&i-i(" in in(erna(i#na- #rei/n0rrenie!. T)e a-- # ()e !)i--in/ a! a-!# a((ri&0(e (# pr#-#n/er#0/)( re!0-(in/ in ## !)#r(a/e! an )ene )i/) ## i%p#r( &i--?0rin/ ()i! (i%e, !0/ar &ea%e an e8(re%e-" i%p#r(an(e8pen!i$ei%p#r( #%%#i("@, an )i/) pri$a(e !e(#r rei(.

*.1.* T)e Cen(ra- ;ank !in/-e #0( ()e 0rren( a#0n( eii( a! #ne # ()epri%ar" a(#r! ri$in/ ()e a-- # ()e !)i--in/. F#r e8a%p-e, #r ()e

%#n() # Sep(e%&er *+11 a-#ne, ()e ierene &e(een i%p#r(! ane8p#r(! !(## a( US '. %i--i#n, )i-e in N#$e%&er *+11, ()i!ierene a%#0n(e (# US '7 %i--i#n. Inee, e8p#r(! )a$e &eeninanin/ #n-" 1 # i%p#r(! )i) %ean! ()a( ()e #0n(r" a!-#!in/ #rei/n e8)an/e a( an a-ar%in/ ra(e. T)i! i! a 0na%en(a-pr#&-e% i() ()e e#n#%" )i) re50ire! !(r#n/ e8p#r( p#-iie! ?!ee#()er !0&%i!!i#n! an re#%%ena(i#n!@. T)e C;K a-!# &-a%e ()ea-- # ()e !)i--in/ #n ()e !(ren/()enin/ # ()e US #--ar in(erna(i#na--"#--#in/ ()e E0r#>#ne e&( ri!i!.

*.1.7 F0r()er, ()e G#$ern#r in )i! pre!en(a(i#n ar/0e ()a( !ine Ken"a i! a!%a-- #pen e#n#%" ?i() #pen api(a- a#0n( an -#a(in/ #r-e8i&-e e8)an/e ra(e@ an" %aB#r in(erna(i#na- !)#k! #0- )a$e aire( ee( #n ()e e8)an/e ra(e an #%e!(i prie!. Apar( r#% ()epr#&-e% i() )i/) i%p#r( &i-- re-a(i$e (# e8p#r(! ?-ar/e 0rren(a#0n( eii(@, ()e e8)an/e ra(e i! a-!# ae(e &" )an/e! in prie!

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17/91

in Ken"a:! (rain/ par(ner!, ()e !i>e # Ken"a:! #iia- #rei/ne8)an/e re!er$e!, an ()e #0n(r" ri!k pr#i-e. A#rin/ (# ()e C;K,#0n(rie! !0) a! S#0() Aria, Tan>ania an U/ana a-!# e8periene!(eep epreia(i#n # ()eir 0rrenie! in ()e peri# Apri- (# Sep(e%&er*+11. M#!( #0n(rie! ar#0n ()e #r- in(er$ene (# are!! ()e a--

# ()eir 0rrenie!, &0( ()e ee(i$ene!! # ()i! a! #n!(raine &" ()e-e$e- # #rei/n e8)an/e re!er$e! a$ai-a&-e.

*.1.9 Wi() re/ar (# ()e per(inen( i!!0e! re50e!(e r#% ()e C;K, !0) a!)e()er ()e ;ank )a %ae an" a )# $i!i(! (# #%%eria- ;ank!0rin/ ()e (i%e # e8)an/e ra(e ri!i!, #r )e()er ()e ;ank)a !en(an" arnin/ -e((er! (# ;ank! re/arin/ ()eir #rei/n e8)an/e (rain/a(i$i(ie!, #r )e()er ()e C;K )a (aken an" !0per$i!#r" in(er$en(i#n!!0) a! !0!pen!i#n r#% ()e in(er&ank %arke( #r an" #()er %ea!0re!,

()e C;K -ariie ()e #--#in/3

(i) T)e 0!e # ()e Di!#0n( Win#3 T)e C;K )a i!!0e ir0-ar (#0r(ai- ()e apai(" # ;ank! (# rr# r#% ()e Di!#0n( Win##r !pe0-a(i#n. T)e C;K i!!0e ir0-ar! !pei"in/ ()e re50en"an a%#0n(! ()a( #0- &e rr#e r#% ()e Win#. T)e;ankin/ Cir0-ar N#. # 0ne *, *+11 !e( ()e Di!#0n( Win#ra(e a( ?a$e ()e C;R ra(e@ an ann#0ne !(i pena-(ie! #r;ank! 0!in/ ()e Win# (# (rae in ()e in(er&ank %arke(. F0r()er,

#pera(i#n! in ()e in(er&ank an #rei/n e8)an/e ea-in/! ere)eke &e#re #%%eria- ;ank! #0- ae!! ()i! rr#in/.?!eeanne8 *@.

(ii) e/0-a(#r" a(i#n! an $i!i(! (# inania- in!(i(0(i#n!3 ()e C;K %aere/0-ar a0i(! # a-- ;ank! in$#-$e in #rei/n e8)an/e ea-in/!par(i0-ar-" re-a(in/ (# ()eir 0!e # ()e E-e(r#ni ;r#kera/e S"!(e%)i) ()e C;K &e-ie$e #0- a0!e ar&i(ra/e #pp#r(0ni(ie!. T)e$i!i(! #0n ()a( #%%eria- ;ank! )a !0&!(an(ia- a%#0n(! #

#rei/n e8)an/e a!!e(! an ()a( ()e e%an #r #rei/n 0rrenie!&" i%p#r(er! # ## an #i- ere a0!in/ !pe0-a(i#n #n ()e prie# #rei/n 0rrenie!.

(iii) Warnin/ Le((er! re-a(e (# (rae in #rei/n e8)an/e, 0!e # ()e

Di!#0n( Win# an Par(iipa(i#n in ()e In(er&ank Marke(3 ()eC;K -ariie ()a( ()ere ere n# arnin/ -e((er! i!!0e, &0( ()ere

17


18/91

ere -e((er! !en( (# $ari#0! ;ank! re50e!(in/ -ariia(i#n ane8p-ana(i#n! #n $ari#0! i!!0e! in a#rane i() Se(i#n 77F # ()eCen(ra- ;ank # Ken"a A(. In ai(i#n a-- ir0-ar! an an" )an/e!(# /0ie-ine! re-a(in/ (# #rei/n e8)an/e (rain/, ()e 0!e # ()eDi!#0n( Win# an par(iipa(i#n in ()e in(er&ank %arke( ere

0-" #%%0nia(e (# a-- #%%eria- ;ank!. Le((er! re50e!(in/e8p-ana(i#n! ere i!!0e (# ()ree ;ank! ()a( )an-e -ar/e #rei/ne8)an/e re!er$e! an ()a( )a inrea!e #rei/n e8)an/e a(i$i(".In#r%a(i#n pr#$ie &" ()e G#$ern#r !)#! ()a( ()e ()ree (#p;ank! &" Sep(e%&er *+11 #n(r#--e 9*.* # (#(a- #rei/n a!!e(! in()e ;ankin/ !"!(e% ?appr#8i%a(e-" K!). 19. &i--i#n@. T)eG#$ern#r rep#r(e ()a( ae50a(e e8p-ana(i#n! ere pr#$ie &" ()e;ank! 0rin/ ()e $i!i(!.

(iv);ank! ()a( )a )i/) #rei/n e8)an/e (rain/ a(i$i("3 T)eG#$ern#r pr#$ie ()e na%e! # ()e ;ank! ()a( )a inrea!e

#rei/n e8)an/e a(i$i(". ;0(, a! n#(e in a$e &0--e(, ()e!e ;ank!pr#$ie ae50a(e e8p-ana(i#n! 0rin/ ()e $i!i(! ?!ee anne8 7@.

(v) S0!pen!i#n # !peii inania- in!(i(0(i#n! r#% par(iipa(in/ in ()e

in(er&ank %arke( #r #rei/n e8)an/e %arke(3 T)e G#$ern#rrep#r(e ()a( #ne ;ank )a -#0(e ()e G0ie-ine! i!!0e #nO(#&er 17, *+11 re/arin/ ()e (en#r # #rei/n 0rren" !ap!.

T)e ;ank a! !0!pene r#% par(iipa(in/ in ()e !ap %arke( #r7+ a"! an a! a-!# pena-i>e K!). 1 %i--i#n in -ine i() ()e;ankin/ A( ?Se(i#n *?a@ # Le/i!-a(i#n N#. # 13 T)e;ankin/ ?Pena-(ie!@ ?A%en%en(@ Re/0-a(i#n! 1@.

(vi)O()er e/0-a(#r" In(er$en(i#n! &" ()e C;K3 (# ea- i() ()epr#&-e% # ()e e8)an/e ra(e ()e MPC )e- a !peia- %ee(in/ an()erea(er )e- %#n()-" %ee(in/! (# ea- i() ()e 0rren" ri!i!.T)e C;K a-!# !0!pene ()e 0!e # E-e(r#ni ;r#kera/e S"!(e% &"

;ank!, -i%i(e ()e (en#r # #rei/n 0rren" !ap! )ere #!)#re;ank! ere in$#-$e (# n#( -e!! ()an #ne "ear, an -i%i(e ()e(en#r # !ap! &e(een re!ien(! (# a peri# n#( -e!! ()an !e$ena"!. Apar( r#% re0in/ ()e #rei/n e8)an/e e8p#!0re ra(i#r#% *+ (# 1+ ?()r#0/) a -e((er (# C)ie E8e0(i$e Oier! ##%%eria- ;ank! #n 17() O(#&er *+11@, ()e C;K a-!# re50ire

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;ank! (# #&(ain !0pp#r(in/ #0%en(! #r a-- (ran!a(i#n! in ()eN#!(r# a#0n(! # #!)#re ;ank!.

*.1. T# re!p#n (# ()e e$e-#pin/ pr#&-e% # ()e e8)an/e ra(e, ()e C;K%ae $ari#0! p#-i" %ea!0re! in #r% # ir0-ar i!!0ane (# ()e

;ank!, )an/e! in ()e /0ie-ine! an )an/e! (# pr0en(ia- re/0-a(i#n!.T)e C;K 0!e! $ari#0! in!(r0%en(! (# #n(r#- ()e &e)a$i#r # anapai(" # #%%eria- ;ank! (# aB0!( ()eir p#r(#-i#! ?#r e8a%p-e (#0r(ai- )ar%0- aB0!(%en(! # p#r(#-i#@. N#r%a--", ()e 0!0a- ea-! in#rei/n e8)an/e are #ne #n &e)a- -ien(!, an #()er! are #ne #n()e &a!i! # a ;ank! ana-"!i! #r e8pe(a(i#n! # ()e %#$e%en(! in ()ee8)an/e ra(e /i$en ()e kn#-e/e # )en ()e" e8pe( ()e -ien(!i-- re50ire #r pr#$ie ()e #rei/n e8)an/e. F#r e8a%p-e ()e ;ank!#0- (e%p#rari-" )#- #rei/n e8)an/e i ()e" e8pe( i( (# epreia(e

0r()er, #r (# a$#i -#!!e!. C#%%eria- ;ank! aB0!( ()eir #rei/ne8)an/e p#r(#-i#! re-a(i$e (# ()eir )#-in/! # a!!e(! en#%ina(e inKen"a !)i--in/ epenin/ #n %arke( #ni(i#n! an -i50ii("#ni(i#n!. T)i! i! !(anar %arke( &e)a$i#r in #%pe(i(i$e #rei/ne8)an/e %arke( an i! #--#e 0p in ()e re#%%ena(i#n!?!0per$i!#r" #pera(i#n!, e(@.

*.1.' T# 0r(ai- $#-a(i-i(" in ()e #rei/n e8)an/e %arke(! ()e C;K 0!e! #r0!e in!(r0%en(! ()a( in-0e, ()e a!) re!er$e re50ire%en(!, #rei/n

e8)an/e e8p#!0re -i%i(!, /0ie-ine! #n (en#r -i%i(in/ )e/in/, ae!!(# #rei/n e8)an/e ai-i(ie!, an -i50ii(" %ana/e%en( ()r#0/) ()e#pen %arke( #pera(i#n!. T)e C;K G#$ern#r a-!# pr#$iein#r%a(i#n a( p#-i" re!p#n!e! ()a( ()e ;ank )a (aken (# are!!()e a-- # ()e !)i--in/ ?an a-!# (# re0e in-a(i#nar" pre!!0re!@. T)e!ere!p#n!e! in-0e3

(i) Ti/)(ene %#ne(ar" p#-i"6 #n () O(#&er *+11, ()e C;K rai!eC;R (# 11. On 1!( N#$e%&er *+11, ()e C;R a! 0r()er rai!e

1'. an ()e a!) re!er$e ra(i# a! a-!# inrea!e (# .* r#%9. ee(i$e r#% 1() Dee%&er *+11. In Dee%&er *+11, ()eC;K 0r()er inrea!e ()e C;R ra(e (# 1?!ee anne8 *@.

(ii) T)e C;K a-!# in(r#0e /0ie-ine! #n #rei/n e8)an/e e8p#!0rean (rain/. F#r e8a%p-e, ()e C;K re0e #%%eria- ;ank!#rei/n e8)an/e e8p#!0re r#% *+ (# 1+ (# #n(r#- (rain/ in#rei/n e8)an/e.

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(iii) T)e C;K a-!# %ae !a-e! # #rei/n e8)an/e. ;0(, !a-e! # #rei/ne8)an/e re!er$e! &" ()e C;K ere #%p-e%en(e &" #()er%ea!0re! in !(a&i-i>in/ ()e e8)an/e ra(e. T)e !a-e! ere -i%i(e &"()e a%#0n( # #rei/n e8)an/e re!er$e! a$ai-a&-e (# ()e C;K.

*.1. I( an &e n#(e ()a( #n ()i!, )an/e! (# ()e a!) re!er$e re50ire%en(!(# ., ()e ri!e in ()e C;R ra(e (# peak a( 1, an )an/e! in ()e#rei/n e8)an/e e8p#!0re -i%i(! )a$e #re ;ank! (# aB0!( ()eirp#r(#-i#!. T)e!e aB0!(%en(! %a" in-0e 0%pin/ # #rei/ne8)an/e en#%ina(e a!!e(! ?()0! #a!i#nin/ ()e !(ren/()enin/ #()e !)i--in/@, !)i( r#% (rea!0r" n! an &i--! (# in(er&ank -enin/ #r(# #rei/n e8)an/e rei( -ine! a%#n/ #()er!. F#r e8a%p-e, !#%e;ank! )#- !i/niian( a!) !0rp-0!e! (# pr#i( r#% ()e in(er&ank%arke(.

*.1. Wi() re/ar (# ()e Di!#0n( Win# # ()e C;K, ()e G#$ern#r !ai()a( #%%eria- ;ank! #%e (# ()e C;K a! a -ener # -a!( re!#r(e!peia--" )en ()e in(er&ank %arke( ra(e! are )i/). Hi/) in(er&ankin(ere!( ra(e! #(en inia(e (i/)( -i50ii(" e!peia--" #--#in/ ()einrea!e in ()e C;R ra(e (# 1 peren( an ()e a!) ra(i# r#% 9.in Ma" *+11 (# .* in N#$e%&er *+11. T)e inrea!e in ()e C;Rra(e inrea!e ()e -enin/ ra(e! # in(ere!( in ()e #0n(r". In re!p#n!e(# ()e ne/a(i$e ee( # ()e inrea!e # ()e C;R ra(e ()e Cen(ra- ;ank

)a! %e( i() ()e Ken"a ;anker! A!!#ia(i#n #n ()e in(ere!( ra(e!)ar/e (# e8i!(in/ -#an! an a/ree #n re!(r0(0rin/ ()e -#an! in#n!0-(a(i#n i() ()e rr#er!.

*.1. T)e C;K G#$ern#r a-!# rep#r(e ()a( ()e G#$ern%en( )a #%%i((e(# re$ie i(! &0/e(e e8peni(0re! (# 0( #n #n n#n4pri#ri(" area.T)i! a! e8pe(e (# !0pp#r( ()e (i/)( %#ne(ar" p#-i" p0r!0e &"C;K. T)e G#$ern#r rei(era(e ()a( ()e pri#ri(" a! (# &rin/ in-a(i#nan in-a(i#nar" e8pe(a(i#n! 0ner #n(r#- an a-!# (# pr#(e( ()e

e#n#%i /r#() &a!e. T)e C;K #0- a-!# !eek (# &0i- 0p #rei/ne8)an/e re!er$e! a! &0er, &0( i(! in(er$en(i#n! in ()e #rei/ne8)an/e %arke( i-- #n-" &e #ne (# a%pen $#-a(i-i(" # ()ee8)an/e ra(e. T)e G#$ern#r a-!# !ai ()a( in(era(i#n! i() %arke(p-a"er! i-- &e !0!(aine (# en)ane ()e ee(i$ene!! # ()e(ran!%i!!i#n %e)ani!% # %#ne(ar" p#-i" an p#-i" a(i#n!.

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*.1.1+T)e G#$ern#r )#e$er re0(e -ai%! ()a( ()e C;K a$#0r! er(ain;ank! in ()e #0n(r" ar/0in/ ()a( ()e Di!#0n( Win# a! #pen (#a-- ;ank!. He a-!# re0(e ()e a--e/a(i#n ()a( )e i n#( # %0) (#arre!( ()e a-- # ()e !)i--in/. He e8p-aine ()a( ()e C;K neee (#a!!e!! ()e %arke( &e#re (akin/ an" a(i#n !ine !#%e # ()e %arke(

a(i$i(ie! #r inania- pr#0(! ere ne. T)e G#$ern#r a-!# eene)i! #%pe(ene in r0nnin/ ()e C;K.

O&!er$a(i#n!

*.1.11 Trakin/ C;K! re!p#n!e (# ()e e8)an/e ra(e an in-a(i#nar" pre!!0re!()r#0/)#0( ()e "ear #0- pr#$ie a )in( #n )a( %a" )a$e /#ner#n/. T)e C;K ir!(-" inrea!e ()e C;R #n Mar) *7, *+11 r#%. (# ' an a! re$i!e a/ain (# '.* #n 9 () 0ne, *+11. T)eC;R ra(e a! n#( re$iee a/ain 0n(i- Sep(e%&er 1(), &0( ()i! a!

rai!e (# #n-" . T)0!, ()#0/) ()e Ken"a !)i--in/ a! rapi-" -#!in/$a-0e an in-a(i#n a! ri!in/, ()e C;K !(i-- kep( ()e C;R air-" -a( #ra( %#n()!.

*.1.1*D0rin/ ()i! (i%e, ()e C;K a! i%p-e%en(in/ #()er %ea!0re!in-0in/in(er$en(i#n! #n ()e Di!#0n( Win# an in(er&ank%arke(. T)e!i/niian( rai!e in ()e C;R ra(e a%e ()r#0/) ()e Cir0-ar # O(#&er', *+113 rai!in/ ()e C;R r#% (# 11. F0r()er aB0!(%en(! a%e inN#$e%&er *, *+11 )en ()e C;R a! rai!e (# 1'. ?a!) re!er$e

ra(i# a! a-!# inrea!e (# .* r#% 9. (# &e ee(i$e inDee%&er *+11@, an a/ain in Dee%&er *, *+11 )en ()e C;R ra(ea! inrea!e (# 1.

*.1.17Re/arin/()e 0!e # ()e Di!#0n( Win#, ()e C;K #rre(e ()e%i!%a() &e(een ()e C;R an Win# ra(e #n * 0ne, *+11 )en()e Win# ra(e a! rai!e (# . H#e$er, ()r#0/) ()e ;ankin/Cir0-ar N#. ' # 11() 0-", *+11 ()e C;K re$iee ()e Di!#0n( Win# #nar! r#% (# '.*, ()#0/) ()ere ere

ai(i#na- re!(ri(i#n! #n ()e 0!e # Win# !0) a! &arrin/ ;ank!()a( ere -enin/ in ()e in(er&ank %arke( r#% ae!!in/ ()e Win#()e !a%e a". T)i! #0- )a$e ee(i$e-" !ea-e ()e -##p)#-e )ere;ank! ere rr#in/ a( a -# ra(e ()r#0/) ()e Win# an -enin/a( a )i/)er ra(e in ()e in(er&ank %arke(. S0e!!i$e re$ie # ()e Win# ra(e an /0ie-ine! #r ae!!in/ i( inia(e #n(in0e a$er!e0!e # ()e in# &" ;ank! ?ar&i(ra/e@.

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*.1.19T)e C#%%i((ee an iner ()a( in a( ;ank! ere 0!in/ ()e Di!#0n( Win# (# -en in ()e in(er&ank %arke( ()e !a%e a" #r ()e ne8( a"!ine ()e ;ankin/ Cir0-ar N#. # A0/0!( 1*, *+11 !#0/)( (# 0r(ai-()i! pra(ie. A-!#, ()e re$i!e #r%0-a # ()e Win# ra(e )i)

#0- en!0re ()e ra(e a! )i/)er ()an ()e in(er&ank ra(e p-0! apena-(" !#0/)( (# i!!0ae ;ank! r#% 0!in/ ()e ierene in ()e Win# an in(er&ank -enin/ ra(e #r pr#i(. A-!#, e-i/i&i-i(" (#ae!! ()e Di!#0n( Win# 0n! a! a-!# e(er%ine &" ()e ;ank!(rain/ &e)a$i#r in ()e #rei/n e8)an/e %arke(!. F0r()er, %ea!0re! (#!(ren/()en an (# -#!e ()e #pp#r(0ni(" #r ar&i(ra/e rea(e &" ()e%i!%a() a%#n/ %aB#r !)#r( (er% in(ere!( ra(e! ere i!!0e in!0e!!i$e ir0-ar!.

*.1.1W)a( e n#(e r#% ()e!e (# #&!er$a(i#n! i! ()a( ()e %i!%a()&e(een ()e Di!#0n( Win# an ()e in(er&ank-enin/ ra(e, an ()e-# ra(e! a$ai-a&-e ()r#0/) ()e Di!#0n( Win# rea(e#pp#r(0ni(ie! #r ar&i(ra/e &" ;ank!, )i) )en ()e 0n! ere 0!ein ()e (rain/ in #rei/n e8)an/e rea(e 0r()er $#-a(i-i(" in ()ee8)an/e ra(e. T)i! par(i0-ar-" (##k p-ae r#% a( Ma" *+11 (#a( Sep(e%&er *+11. T)i! a! !i/niian( !ine ()e!e a(i$i(ie!#r!ene ()e ire(i#n # e8)an/e ra(e e8pe(a(i#n!3 0r()er#r!enin/ ()e !-ie # ()e Ken"a !)i--in/. T)e C#%%i((ee n#(e! ()a(

-ak # 50ik a(i#n (# -#!e ()e!e #pp#r(0ni(ie! #0- )a$e a0!e()i!. T)e pr#&-e% # ()e e8)an/e ra(e #0- )a$e &een are!!e (# a/rea( e8(en( ()r#0/) a ri!e in ()e C;R a! ear-" a! 0ne *+11 an a-!#()e p-ae%en( # !(rin/en( pena-(ie! #r ()e a&0!e # ()e Di!#0n( Win#.

*.1.1'T)e %i(i/a(in/ a(#r i! ()a( ()e %#$e%en(! in ()e e8)an/e ra(e #0-)a$e &een in #()er a"! 0e-e &" ()e ri!in/ in-a(i#n an e8(erna- a(#r!?!0) a! %#$e%en(! # !)#r( (er% api(a- 0e (# ()e E0r# ri!i!@. T)e C;K

G#$ern#r )#e$er n#(e ()a( ()e C;K neee (# a( #n ()e &a!i! #ana-"!i! # 0n#-in/ e$e-#p%en(!, !# ()e ;ank i n#( a( a! a!( a!()e !i(0a(i#n %a" )a$e re50ire.

*.1.1T)e C#%%i((ee n#(e! ()a( ()e C;K ACT ?CAP 91@, Se(i#n 1+pr#$ie! ()a( ()e ;#ar # Dire(#r! )#!e C)air%an i! ()e G#$ern#r# C;K !)#0- ?a@


23/91

()e G#$ern#r in i!)ar/in/ ()e re!p#n!i&i-i(" # ()a( #ie6 ?e@keepin/ 0ner #n!(an( re$ie ()e per#r%ane # ()e G#$ern#r inen!0rin/ ()a( ()e ;ank a)ie$e! i(! #&Be(i$e!. T)e C#%%i((ee #&!er$e!()a( ()e ;#ar # Dire(#r!, #r )i) ()e C)air%an i! ()e G#$ern#r,ann#( ee(i$e-" re$ie ()e per#r%ane # ()e G#$ern#r. A-!#, ()e

C#%%i((ee n#(e ()e (# r#-e! # ()e C;K3 prie !(a&i-i(" an ()ere/0-a(i#n # ()e inania- !e(#r. Are ()e!e r#-e! #%p-e%en(ar"0ner ()e !a%e in!(i(0(i#n #r # &e!( in(erna(i#na- pra(ie! inia(e()e nee (# !epara(e ()e!e (# r#-e!

e#%%ena(i#n!

*.1.1T)e C#%%i((ee #n0r! i() !#%e # ()e rea!#n! #r ()e a-- # ()e!)i--in/ -a!( "ear /i$en &" ()e C;K ?an a-!# #()er i(ne!!e!@ !0) a!E0r#4 >#ne ri!i!, US e&( ri!i!, N#r() Aria p#-i(ia- (0r%#i-, an

#r- #i- prie! a%#n/ #()er!. T)a( ()e rea!#n! a$ane re%aineair-" ()e !a%e e$en a(er N#$e%&er *+11, )en ()e !)i--in/ !(ar(e (#!(ren/()en i! a !(r#n/ p#in(er ()a( in(erna- "na%i! p-a"e a r#-e in ()ee-ine # ()e !)i--in/ an ()a( )a er(ain a!pe(! # ()e ;ank! &e)a$i#r&een are!!e, ()e epreia(i#n # ()e !)i--in/ #0- )a$e &een -e!!$i#-en(. T)e C#%%i((ee ()ere#re i!#-a(e ()ree a(#r! a! ()e pri%ar"ri$er! # ()e !0en a-- # ()e !)i--in/ par(i0-ar-" &e(een Ma" *+11an O(#&er *+113

(i) T)e a&0!e # ()e Di!#0n( Win# an re-a(e (rae! in #rei/ne8)an/e6

(ii) O$er0!e # $ari#0! #rei/n e8)an/e (rae (##-! !0) a!E-e(r#ni ;r#kera/e S"!(e%, 0rren" !ap!, an arr" (rae!?%#!( # ()e% i()in -e/a- -i%i(!@6 an,

(iii) T)e e-a" in C;K (# e(e( ()e pr#&-e% an re!p#n ae50a(e-"in a (i%e-" %anner.

*.1.1 Re/arin/ ()e #$er0!e # $ari#0! inania- inn#$a(i#n! (# %ake pr#i(!

a( ()e e8pen!e # ()e e8)an/e ra(e, i( i! n#(e ()a( ()i! i! in inania--"e$e-#pe %arke(! 50i(e par( # !(anar %arke( &e)a$i#r.

Gi$en ()a( Ken"a:! inania- !e(#r i! 50i(e !#p)i!(ia(e, an /i$en()a( Ken"a:!)#-! an #pen api(a- a#0n( an -#a(in/ e8)an/e ra(e,an /i$en ()e in(er4-inka/e! # ()e G-#&a- inania- %arke(!. I( #0-&e )ar (# r#-- &ak pr#/re!! in inania- inn#$a(i#n! in #rei/ne8)an/e #r !a-e #n ()e -e$e- # -i&era-i>a(i#n. I( i! ()ere#re ()e

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C#%%i((ee! pri%ar" a!!e!!%en( ()a( ()e C;K nee! (# e$e-#p (##-!#r a&i-i(ie! (# pr#per-" an eiien(-" %#ni(#r ()e inania- %arke(!,par(i0-ar-" in (##-! (# 50ik-" ea- i() ()e a$er!e ee(! #inn#$a(i#n! in #rei/n e8)an/e (rae! !0) a! ()e E-e(r#ni ;r#kera/eS"!(e%, !ap! an arr" (rae!.

*.1.*+T)e C;K !)#0- ()ere#re 0r/en(-" e$e-#p #r !(ren/()enapai(" (#%#ni(#r ()e inania- %arke(! !# a! (# rere!! an" !)arp e$ia(i#n!r#% ()e n#r%a- %arke( (rain/. T)e C;K nee! (# inrea!e ()e !peean re!p#n!i$ene!! (# %arke( e$e-#p%en(! an a-!# (# !(ren/()enre!p#n!e (# #n(r#- rapi-" )an/in/ %arke( &e)a$i#r in a a"i()#0( 0r&in/ ()e n#r%a- #pera(i#n! # ()e %arke(!. In ai(i#n,()e C;K !)#0- p0( in p-ae a rea!#na&-e ()re!)#- #r (ri//er p#in( a()i) ()e C;K #0- (ake a(i#n i ()e !)i--in/ epreia(e! #r

appreia(e! &" a er(ain %ar/in. T)e C#%%i((ee a-!# !0//e!(! ()e nee(# !)are ()i! in#r%a(i#n i() an a(i$e #$er!i/)( in!(i(0(i#n 0rin/(i%e! # ri!i!. Pena-(ie! #r n#n4a)erene (# pr0en(ia- an #()er!0per$i!#r" re/0-a(i#n! an /0ie-ine! !)#0- &e en)ane in-0in/0!(#ia- !en(ene! an #r !(ier %#ne(ar" pena-(ie! a%#n/ #()er!.

*.1.*1A! n#(e in ()e C#%%i((ee #&!er$a(i#n!, ()e a&0!e # ()e Di!#0n( Win# #0- )a$e &een pre$en(e i a(i#n a! (aken in a (i%e-"%anner. In #rer (# 0n#$er an" r#n/ #in/ re-a(in/ (# ()e 0!e #

()e Di!#0n( Win# 0rin/ ()e peri# Mar) *+11 (# O(#&er *+11,()e C#%%i((ee 0r()er re#%%en! a #ren!i a0i( # ;ank! #k!0rin/ ()e peri# )en ()ere a! %a!!i$e a&0!e # ()e Di!#0n( Win#. T)i! !)#0- &e in!(i(0(e i ()e ;ank! &rea)e an"re/0-a(i#n! a( ()e (i%e an i ()e re50ire pena-(ie! ere n#( app-ie.

*.1.**T)#0/) n#( ire(-" apparen(, !#%e # ()e pr#&-e%! a!!#ia(e i()()e a-- # ()e !)i--in/ an ()e -e()ar/i re!p#n!e &" ()e C;K #0- &ere-a(e (# ()e #pera(i#n! # ()e C;K. T)e C#%%i((ee ()ere#re

re#%%en! a re$ie # ()e !(r0(0re an #pera(i#n! # ()e C;K i()a $ie (# %akin/ ()e in!(i(0(i#n %#re eiien( an re!p#n!i$e (#%#ne(ar" ri!i!.

*.1.*7In ai(i#n, ()e C;K A( !)#0- &e a%ene (# pr#$ie ()a( ()e C;KG#$ern#r ann#( )air ()e ;#ar # Dire(#r! # C;K )i) i!e8pe(e (# re$ie ()e #ie )#-er:! per#r%ane in a)ie$in/ ()e

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#&Be(i$e! # ()i! ri(ia- in!(i(0(i#n. T)e C#%%i((ee a-!# re#%%en!a re$ie # ()e !(r0(0re # ()e C;K !# a! (# !(ren/()en ()e r#-e! #%ain(ainin/ prie !(a&i-i(" an ()e r#-e # re/0-a(in/ ()e inania-!e(#r. N#(in/ ()a( ()e inania- %arke(! are 50i(e ri(ia- in ()e(ran!%i!!i#n # %#ne(ar" p#-i" an per#r%ane # e8)an/e ra(e,

()e C#%%i((ee re#%%en! )a$in/ ae50a(e repre!en(a(i#n r#% ()e;ank !0per$i!#r" ar% # ()e C;K in ()e M#ne(ar" P#-i" C#%%i((ee.T)e C#%%i((ee ()ere#re pr#p#!e! a%en%en( # C;K A( (# pr#$ie#r an e8(ra %e%&er (# ()e MPC # a C;K !(a re!p#n!i&-e #r ;ank!0per$i!i#n.

*.* Mini!(r" # Finane

S0&%i!!i#n!

*.*.1 T)e Mini!(r" # Finane a((ri&0(e ()e e-ine in ()e $a-0e # ()e!)i--in/ (# e8(erna- a(#r! !0) a! ri!e # r0e #i- prie!, )i/)er i%p#r(&i-- 0e (# inrea!e !penin/ in inra!(r0(0re !0) a! ener/" an a-!#0e (# in(erna- a(#r!. In re!p#n!e (# ()e e8)an/e ra(e ri!i! ()eMini!(r" (##k ()e #--#in/ !(ep!3

(i) Sen( ir0-ar! (# a-- G#$ern%en( epar(%en(! (# re0e 0nnee!!ar"e8peni(0re !0) a! ()#!e #n #rei/n (ra$e- an 0rni(0re.Sa$in/!a%#0n(in/ (# a( K!). &i--i#n ere %ae 0e (# ()e!e

%ea!0re! a-#ne.(ii) Re0in/ ()e &0/e( eii( &" 1 peren( in ()e%ar#e#n#%i

ra%e#rk.(iii) S#0/)( an reei$e an e8(en!i#n # ()e E8(ene Crei( Fai-i("

?EFC@ r#% IMF. T)e #0n(r" )a! ae!!e a%#0n(! e8eein/ USD7++ %i--i#n !ine ear-" *+11, 0ner ()e ()ree "ear ECF pr#/ra% ?!eeanne8 9@.

*.*.* In ai(i#n, Trea!0r" par(iipa(e in %ee(in/! i() ()e C;K,

#%%eria- ;ank!, ()e Ken"a ;anker! A!!#ia(i#n, an a Ta!k #re in()e Oie # ()e Pri%e Mini!(er #n ()e i!!0e # ()e e8)an/e ra(e an(# )e-p %ana/e e8pe(a(i#n!.

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O&!er$a(i#n!

*.*.7 T)e C#%%i((ee n#(e ()a( ()e Mini!(r" # Finane !ee%e 0naare()a( i( #0- -e/a--" in(er$ene an (ake #$er %#ne(ar" p#-i" ()r#0/)

()e a&ine( i i( e-( ()a( C;K )a ai-e #r )a p0r!0e 0n!0i(a&-ep#-iie! #r )a e$ia(e !0&!(an(ia--" r#% ()e M#ne(ar" P#-i"S(a(e%en(. T)i! a! ()r#0/) ()e Cen(ra- ;ank # Ken"a A( Cap 919?@*@.

*.*.9 T)e ri!i! # ()e !)i--in/ an ()e (i%e -ap!e in in!(i(0(in/ in(er$en(i#n!p#in(! a( !#%e i!#nne( &e(een ()e %#ne(ar" an i!a- p#-i"a(i#n!. T)e C#%%i((ee n#(e! ()a( ()e %#ne(ar" p#-i" a(i#n! eren#( i%%eia(e-" &ake &" #rre!p#nin/ i!a- a(i#n! (# !(e% ()e

!)i--in/ e-ine. Fi!a- !penin/ re!(ri(i#n! ere n#( #r()#%in/ a(()e )ei/)( # ()e ri!i!.

C#n-0!i#n an e#%%ena(i#n!

*.*. T)e C#%%i((ee i! # ()e $ie ()a( ()e Mini!(r" # Finane #0- )a$ep-a"e %#re a(i$e r#-e (# )e-p !(a&i-i>e ()e Ken"a !)i--in/. A-!#, i( i!

apparen( ()a( -i((-e )a! &een #ne (# are!! ()e )r#ni -# e8p#r(earnin/! re-a(i$e (# ()e i%p#r( &i--. M#re i%p#r(an(-", a! ()e#&!er$a(i#n ()a( ()e Mini!(r" # Finane )a! ()e p#er! in ()e Cen(ra-;ank A( (# (ake #$er %#ne(ar" p#-i" %akin/ ()r#0/) ()e a&ine( i()e C;K !)#! ina&i-i(" #r 0ni--in/ne!! (# p0r!0e ()e in(ene%#ne(ar" p#-iie! 0ner ()e M#ne(ar" P#-i" S(a(e%en(. T# )e-pare!! ()e !)#r(#%in/! in ()e i!a- !ie ()e Mini!(r" # Finane!)#0- %ake p#-iie! (# re0e ()e 0rren( a#0n( eii(. Se#n-",()e Mini!(r" # Finane !)#0- a%i-iari>e i(!e- i() ()e C;K a( an

ra p#!!i&-e /r#0n! #r in(er$en(i#n! in %#ne(ar" p#-i" ei!i#n%akin/ an e8e0(i#n.

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*.7 Ken"a e$en0e A0()#ri("

S0&%i!!i#n!

*.7.1 T)e C#%%i((ee %e( i() ()e Ken"a Re$en0e A0()#ri(", #n ()

Dee%&er *+11. T)e C#%%i((ee a! in#r%e a! #--#!3

(i) D0rin/ ()e peri# 0-" (# N#$e%&er *+11, KRA #--e(eK!)! *''. &i--i#n ?# )i) K!)! **.* &i--i#n a! e8)e50er re$en0e@

#%pare (# K!)! *7 &i--i#n in a !i%i-ar peri# # FY *+1+*+11.(ii) Pe(r#-e0% (a8e! re#re a /r#() ra(e # 1.* in ()eperi# 0-" 2 N#$e%&er *+11, #%pare (# a !i%i-ar peri# in*+1+11.(iii) D0rin/ ()e peri# 0-" (# N#$e%&er *+11 inire( (a8e! re/i!(ere

a e-ine # 7.9 #%pare (# a !i%i-ar peri# in *+1+11.

Prinipa- 0ner per#r%er! ere AT, D#%e!(i E8i!e an E8i!e#n air (i%e.

(iv) Sine Sep(e%&er *++, ()e !)i--in/ )a &een epreia(in/ a/ain!(()e %aB#r 0rrenie! an par(i0-ar-" ()e #--ar. T)i! ae(e ()eFO; $a-0e e$en(0a--" in-0enin/ $#-0%e! p0r)a!e #ri%p#r(a(i#n (# Ken"a.

(v) T)e i%p#r(! an e8p#r(! $#-0%e! #$er *+11 (# ()e en #N#$e%&er /re &" 11.1 an 19.' re!pe(i$e-".

(vi) T)e (a8pa"er! )# )ea$i-" epen #n i%p#r(e ra %a(eria-! #r

pr#0(! an !er$ie! ere a0!e (# inrea!e ()e #!( #pr#0(i#n. T)i! %#!(-" re!0-(e in re0e !a-e! re$en0e! an AT #--e(i#n!.

(vii) ;ank! %a" )a$e rea-i>e #rei/n e8)an/e /ain! )i) i%pa(ep#!i(i$e-" #n ()eir pr#i(a&i-i(".

(viii) T)e Cen(ra- ;ank %ea!0re (# %ini%i>e e8)an/e ra(e $#-a(i-i("()r#0/) inrea!e ;ank ra(e a0!e ;ank! (# inrea!e ()eir -enin/ra(e )i) %a" )a$e re!0-(e in &a e&(! 0e (# ea0-(!,re0e rr#in/, )i) in ()e -#n/ r0n #0- i%pa( ()eir

pr#i(a&i-i(".(ix) T)e eakenin/ !)i--in/ pi-e pre!!0re #n !a-e! # 0!e ar! )#!e

#rer! r#ppe &" 1.* in ()e ()ir 50ar(er, ()0! rai!in/ ()e #!(# 0!e ar!.

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O&!er$a(i#n!

*.7.1 Fr#% ()e in(era(i#n i() ()e Ken"a Re$en0e A0()#ri(", ()eC#%%i((ee #&!er$e ()e #--#in/3

(i) T)e p##r per#r%ane in pe(r#-e0% (a8e! a! a((ri&0(e (# ()eri!in/ prie! # #i- in ()e #r- #i- %arke(! )i) 0ner%inei%p#r( $#-0%e! an epreia(i#n # ()e !)i--in/ a/ain!( #()er %aB#r0rrenie!.

(ii) T)e e-ine in AT a! -ar/e-" a((ri&0(e (# ()e r#--in/ &ak #i())#-in/ AT )i) a--#e #r ()e AT (# &e i())e- anre%i((e ire(-". AT a! a-!# i%pa(e #n &" ()e e8)an/e ra(e)i) &" rai!in/ i%p#r( $a-0e! inrea!e ()e e0(i#n! #n i%p#r( AT. E8i!e 0(" #n #%e!(i pr#0(! a! ae(e &" a r#p inpr#0(i#n 50an(i(ie! )i) #0- n#( &e a((ri&0(e (# ()e e8)an/e

ra(e %#$e%en(!. E8i!e 0(" #n air(i%e p##r per#r%ane a! are!0-( # ()e prie ar in ()e (e-e#%%0nia(i#n!.

(iii) T)e $a-0e # /r#() in ()e i%p#r(! an e8p#r(! $#-0%e! #$er *+11a! pri%ari-" ri$en &" ()e epreia(i#n # ()e 0rren" an 0ni(prie # i%p#r(!. ;0(, ()e eakenin/ !)i--in/ enie ()e e#n#%"()e &enei(! # ()e #n/#in/ a-- in /-#&a- r0e prie!, e!pi(e ()ea-- in ()e in(erna(i#na- #i- %arke(!.

(iv) T)e epreia(in/ !)i--in/ re!0-(e in )i/)er re$en0e #0(r0n a!i%p#r(er! pai %#re !)i--in/! #r #rei/n 0rrenie!. T)ere a!

)#e$er a e-ine in $#-0%e # i%p#r(! a! a! !)#n &" I%p#r(De-ara(i#n Fee! an in ai(i#n, ()e )i/) in-a(i#nar" en$ir#n%en(an ()e e8)an/e ra(e /ain! ere er#e &" in-a(i#nar" pre!!0re.

(v) C#%panie! )# )ea$i-" epen #n i%p#r(e ra %a(eria-!inrea!e ()e #!( # pr#0(i#n ()0! i%pa(in/ ne/a(i$e-" #n#%e!(i (a8e!.

(vi) T)#!e (a8 pa"er! i() -#an! en#%ina(e in #rei/n 0rren"in0rre #rei/n e8)an/e -#!!e! )i) ae(e pr#i(a&i-i(". W)en&0!ine!!%en !0er e8)an/e ra(e -#!!e! ()e!e are e0(i&-e

e8pen!e! )i) 0ner%ine #rp#ra(i#n (a8e!.(vii) T)e ke" re50ire%en( #r re$en0e per#r%ane i! !(a&i-i(" # ke"

e#n#%i para%e(er! !# ()a( &0!ine!! #e! n#( a#p( a ai( an!ee a((i(0e i() re!pe( (# in$e!(%en( an e8peni(0re.

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*.9 Ta!k#re #n()e De-ine #()e Ken"a S)i--in/ ?+ie #()e Pri%e

Mini!(er@

S0&%i!!i#n

*.9.1 T)e (a!k#re )a &een !e( 0p &" ()e Pri%e Mini!(er (# in$e!(i/a(e ()ea0!e! # ()e e-ine a(er i( a! e$ien( ()a( %ea!0re! &ein/0ner(aken &" ()e C;K an ()e Trea!0r" ere n#( &earin/ r0i(. I( a!#%pri!e # Dr. Ear Sa%&i-i, Mr. M. I!i)akai, Dr. C)ri! Kip(##,Mr. M0/#Ki&a(i, Mr. Gera- N"a#%a, Mr. Ha&i-O-aka, Mr. An()#n" Wer0 an Mr. A.K.M. Ki-e-e.

*.9.1 T)e C#%%i((ee %e( i() ()e Ta!k#re #n ()e De-ine # ()e Ken"a

S)i--in/, #n *() an0ar" *+1*. T)e C#%%i((ee a! in#r%e ()a( ()e

a0!e! # ()e a-- # ()e Ken"a !)i--in/ ere a! #--#!3(i) De(eri#ra(i#n # 0rren( a#0n(3 ()e ri!e in ()e 0rren( a#0n(

)a! &een /ra0a- an !0!(aine rea)in/ a peak # a( 11. # GDP &" 0-", *+11, ()0! e8er(in/ #n!iera&-e pre!!0re #n ()ee8)an/e ra(e. T)e ienin/ # ()e 0rren( a#0n( e%ana(e!r#% a /r#in/ /ap &e(een e8p#r(! an i%p#r(! # %er)ani!e/##!. T)i! %ain-" re-e(! ()e i%pa( # )i/)er prie! #r #i- an)e%ia-! i%p#r(!.

(ii) D#%e!(i e%an ri$en &" pri$a(e !e(#r rei( e8pan!i#n a!

e-- a! inrea!e in p0&-i in$e!(%en( in *+1+11 a-!# inrea!epre!!0re #n ()e 0rren( a#0n(. A-!#, rei( ()a( /re a( a(7* )a /r#n a!(er ()an a$era/e #r rea- e!(a(e, #n!0%er0ra&-e! an #%e!(i (rae #%p#nen(! ()a( are )i/)-"#rre-a(e i() #%e!(i e%an. T)e!e e$e-#p%en(! )a$e &eenre-e(e in ()e e(eri#ra(i#n in ()e 0rren( a#0n( eii(.

(iii) Unre!( in Ara& S(a(e! -e (# ri!e in #i- prie! an ()e i%p#r( &i--.Hi/) #i- prie! #%e!(ia--" a-!# r#$e in-a(i#n in *+11.

(iv) T)e E0r# >#ne e&( ri!i! e!peia--" in Greee, P#r(0/a- an Spaina-!# %ae in$e!(#r! ?-#a- an #rei/n@ !e-- ()eir !e0ri(ie! ?!)are!,n!@ (# &0" #rei/n 0rrenie! a! a re-a(i$e-" !ae )a$en.

(v) T)e epreia(i#n # !)i--in/ a! a-!# ri$en &" ()e !en(i%en(! #()e inania- %arke(! ra(e 4 !pe0-a(#r! %a" )a$e rea ()e %arke(an (aken ()e p#!i(i#n ()a( ()e !)i--in/ i-- eaken 0r()er ()0!rai!in/ e%an #r %#re #rei/n 0rren" in #rer (# %ake apr#i(.

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(vi) A-!#, ()e re!p#n!e &" ()e C;K a! n#( -ear an a! in#n!i!(en(.T)e C;K:! ineiien" in ea-in/ i() ()e pr#&-e% a( i(! #n!e(#0- )a$e &een a %aB#r a0!e # ()e #n(in0e epreia(i#n.T)ere a! n# ia-#/0e &e(een ()e C;K an ()e #%%eria-;ank! "e( ()e C;K i! ()eir re/0-a(#r ?!ee anne8 @.

O&!er$a(i#n!

*.9.* Fr#% ()e in(era(i#n i() ()e Ta!k#re #n ()e De-ine # ()e Ken"aS)i--in/, ()e C#%%i((ee )a ()e #--#in/ #&!er$a(i#n!3

(i) T)ere !)#0- &e %#re ee(i$e ia-#/0e &e(een ()e C;K an

()e pri$a(e !e(#r, %#re !peiia--" ()e C;K an #rp#ra(e

p-a"er:! in ()e #rei/n e8)an/e %arke( an G#$ern%en(. T)e

C#%%i((ee #&!er$e ()a( rei&i-i(" i! # ri(ia- i%p#r(ane #n()e par( # ()e re/0-a(#r an ()a( ()i! rei&i-i(" #0- &e

en)ane ()r#0/) en/a/in/ in %#re ee(i$e ia-#/0e.

(ii) T)e G#$ern%en( !)#0- %ake e#r(! (# inrea!e !penin/

apai(" # i(! %ini!(rie! !# a! (# inrea!e a&!#rp(i#n # #n#r

0n! ()a( in (0rn i-- )e-p &0i- #rei/n e8)an/e re!er$e!.

(iii) T)e C;K:! ann#0ne%en( ()a( i( i-- !e-- #rei/n 0rrenie!

ire(-" (# i%p#r(er! an &"pa!!in/ ;ank! i! a $i#-a(i#n an

i!re/ar (# inania- !(r0(0re!.

e#%%ena(i#n

*.9.7 T)e ann#0ne%en( an re-ea!e # C;K ir0-ar (# &"pa!! ()e ;ankin/

!"!(e% an ea- ire(-" i() &0"er! #r !e--er! # #rei/n e8)an/e,

a-()#0/) re$er!e, a! in #%p-e(e i!re/ar # ()e inania-

!(r0(0re!. T)i! #0- )a$e #pene #pp#r(0ni(ie! #r ra(i#nin/ #

#rei/n e8)an/e, #a!i#ne para--e- %arke(! (# ()ri$e an rea(i#n# %0-(ip-e 0rren" pra(ie!. In ai(i#n, ()e apai(" # ()e

G#$ern#r a! #0n an(in/?!ee anne8 '@.

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*. Ener/" e/0-a(#r" C#%%i!!i#n ?E C@

S0&%i!!i#n

*..1 T)e C#%%i((ee %e( i() ()e Ener/" Re/0-a(#r" C#%%i!!i#n, #n '()

Dee%&er *+11. T)e #--#in/ are ()e ke" !0&%i!!i#n! r#% ()e

C#%%i!!i#n3

(i) T)e pre!en( )i/) #!( # 0e- a! &ein/ e8periene /-#&a--"

!ine ()e in(erna(i#na- prie! # r0e #i- )a /#ne 0p. T)e

inrea!e a! par(-" 0e (# ()e p#-i(iari!i! in ()e Ara& #i-

pr#0in/ !(a(e! -ike Li&"a. Sine ()e i%p#r(e pe(r#-e0% pr#0(!

are pai #r in US #--ar!, )en ()e prie! # 0e- inrea!e

in(erna(i#na--", Ken"a )a an inrea!e in ()e i%p#r( &i--. T)i! -e(# an inrea!e e%an #r #rei/n 0rrenie! an #0- )a$e

e!a-a(e ()e e-ine # ()e Ken"a !)i--in/.

(ii) T)a( ()ere )a! &een an inrea!e in p0%p prie! # 7*.+ #r!0per pe(r#-, 7+. #r ie!e- an *.1 #r ker#!ene an ()e!e)an/e! re-e(! ()e inrea!e! in ()e #!( # pr#0(!.

O&!er$a(i#n

*..* Fr#% ()e in(era(i#n i() ()e ERC, ()e C#%%i((ee #&!er$e ()a(inee e8(erna- a(#r! a((ri&0(e (# )a$e a0!e ()e e-ine # ()e!)i--in/ !(i-- per!i!(e an i n#( ()ere#re #n(ri&0(e !i/niian(-" (#()e e-ine # ()e !)i--in/. T)e C#%%i((ee )#e$er #&!er$e! ()a( ()eERC priin/ %e)ani!% i! a %aB#r #nern i()in ()e e#n#%" !ine#n(ri&0(in/ (# ()e )i/) #!( # #i- # ()e r0e #i- #!( a( !#0re.

*.' Capi(a- Marke(! A0()#ri(" ?CMA@

S0&%i!!i#n

*.'.1 T)e C#%%i((ee %e( i() ()e Capi(a- Marke(! A0()#ri(", #n *()

N#$e%&er *+11. T)e C#%%i((ee a! in#r%e a! #--#!3

(i) T)ere a! a e-ine in ()e !(#k %arke( ine8 epi(in/ a e-ine in()e api(a- /ain! # ()e #%panie! -i!(e in ()e !(#k %arke( inKen"a. 0i(e a n0%&er # ()e!e #%panie! )ea$i-" re-" #n

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i%p#r(e /##! an )en ()e e8)an/e ra(e inrea!e, ()ere a!an inrea!e in ()e #!( # pr#0(i#n. T)i! re0e ()eir p#(en(ia-pr#i(!.

(ii) Capi(a- -i/)( r#% ()e !(#k %arke( a0!e &" p#-i(ia- 0ner(ain(ie!an ICC a!e!, an in ()e !e#n r#0n ()e rapi a-- # ()e !)i--in/

#0- )a$e &een a0!e &" !0&!e50en( in$e!(#r! 0%pin/ ()e!)i--in/ #r ()e #rei/n 0rrenie!.

(iii) T)#0/) ()ere a! a )i/) api(a- #0(-#, !#%e # ()e %#ne" !ee%!(# &e #%in/ &ak !ine ()e (#(a- in-#! r#% O(#&er *+1+ (#O(#&er *+11 ne( a%#0n( # K!).1 &i--i#n.

(iv) In re!p#nin/ (# 50e!(i#n! &" ()e C#%%i((ee a( in!ier ea-in/!an #rei/n e8)an/e )#arin/, CMA air%e ()a( ()ere ere n#a!e! # in!ier ea-in/ ()a( ()e A0()#ri(" a! in$e!(i/a(in/ #raare # in re-a(i#n (# ()e epreia(i#n # ()e Ken"a S)i--in/.

F0r()er, ()ere a! n# e$iene ()a( #rei/n e8)an/e -0(0a(i#n!ere a! a re!0-( # in$e!(%en(! a( ()e api(a- %arke(!. T)ere a! n##n!i!(en( inia(i#n # a -ink &e(een ()e epreia(i#n # ()e!)i--in/ an ne( #rei/n e50i(" -#!. A( ()e p#in( )en ()e ne(#0(-# a! )i/)e!( ?7.7&n@, ()e Ken"a !)i--in/ a! a( .+ (# ()eUSD. A! ()e S)i--in/ #n(in0e (# epreia(e, #rei/n e50i(" -#!i n#( %#$e #%%en!0ra(e-" in ()e !a%e ire(i#n.

(v) T)e %arke( in#r%a(i#n i n#( !)# ()a( ()e eak !)i--in/inrea!e #rei/n in$e!(#r -#! in(# ()e #0n(r". T)e #rre-a(i#n

&e(een ()e epreia(i#n # ()e !)i--in/ an ne( #rei/n e50i("-#! a! eak, 0nprei(a&-e an in#n!i!(en(. T)e e50i(" %arke(e8periene ne( #rei/n e50i(" p#r(#-i# #0(-#! )en ()e !)i--in/a! re-a(i$e-" !(a&-e. A( ()e !)i--in/ eake!( p#in(!, &e(een A0/0!(an N#$e%&er *+11 ()e e50i(" %arke( e8periene p#!i(i$e ?&0(n#( )i/)e!(@ #rei/n e50i(" p#r(#-i# -#!.

(vi) T)e eaker !)i--in/ )a %#re !i/niian( i%pa( #n #rei/n in$e!(#r!?)# are %#!(-" in!(i(0(i#n!@ )#!e a!!e( $a-0a(i#n e-ine a! are!0-( # e8)an/e ra(e -#!!e! an n#( -#a- ini$i0a- ?re(ai-@

in$e!(#r! ?!ee anne8 @.(vii) T)e epreia(i#n # ()e !)i--in/ ae(e "ie-! #n a-rea" )e-n! ?&" Dia!p#ra #r #rei/n in$e!(#r! )# )a (# #n$er(peri#i re(0rn! r#% n in$e!(%en( in(# ()eir )#!( #0n(r":!0rren"@ -eain/ (# -#er re(0rn! an i!#0ra/in/ in$e!(%en( ini8e in#%e !e0ri(ie!.

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O&!er$a(i#n!

*.'.* Fr#% ()e in(era(i#n i() ()e CMA, ()e C#%%i((ee #&!er$e ()eepreia(i#n # ()e Ken"a !)i--in/ ae(e ()e #!( !(r0(0re # -i!(e#%panie! )i) re-" #n i%p#r(!. Hi/)er i%p#r( #!(! ae(e ()eirpr#Be(e earnin/! )i) 0r()er (ri//ere ()e a-- in ()e prie # ()e-i!(e !)are!. In ai(i#n, ()e e-ine # ()e !)i--in/ a0!e #%panie! (#p#!(p#ne #n0(in/ Ini(ia- P0&-i Oer! ?IPO@ earin/ 0ner4!0&!rip(i#n. T)0!, ()e !)i--in/ e-ine a! par(-" (# &-a%e #r ()e r#pin ()e NSE *+4!)are ine8. A-!#, #rinar" re(ai- in$e!(#r! %a" )a$e !#-()eir !)are! (# #pe i() ()e )i/) #!( # -i$in/ a!!#ia(e i() ()e eak!)i--in/ an in-a(i#nar" pre!!0re!.

*.'.7 E$en ()#0/) ()e api(a- %arke(! are en(rain ()e inania- !e(#r anare )i/)-" e8p#!e (# -0(0a(i#n! # ()e !)i--in/ an /-#&a- inania-

e$en(!, ()e C#%%i((ee #0n %ini%a- in(era(i#n! &e(een ()i! %arke(!e/%en( i() ()e C;K an Trea!0r" re/arin/ pre$ai-in/ e#n#%i#ni(i#n! an %#ne(ar" p#-i". T)e )0/e er#!i#n # in$e!(#r ea-())i) #0- &e a!!#ia(e i() ()e !)i--in/ $#-a(i-i(" !)#0- &e # /rea(in(ere!( (# p#-i" %aker! in ()e ()ree in!(i(0(i#n!.

*.'.9 T)e CMA a! n#( #r()#%in/ i()!peii in#r%a(i#n re50e!(e &"()e C#%%i((ee an i n#( appreia(e ()e r#-e # par-ia%en( an!e(i#n 1* # ()e #n!(i(0(i#n.

e#%%ena(i#n!

*.'.9 Oin/ (# ()e i%p#r(ane # ()e api(a- %arke(! in Ken"a:! e$e-#p%en(pr#e!!, an a! a !#0re # a#ra&-e n#n4;ank api(a- #r -i!(e#%panie!, ()e C#%%i((ee re#%%en! ()e nee #r ()e Mini!(r" #Finane, CMA an C;K (# #n!0-( re/0-ar-" re/arin/ 0n#-in/e#n#%i #ni(i#n! an a"! (# rere!! ()e% !# a! (# !e0re in$e!(#rea-().

*.'. A%en Capi(a- Marke( A0()#ri(" A((# pr#$ie ()a( ()e CMA )iee8e0(i$e &rie! a re-e$an( Par-ia%en(ar" C#%%i((ee # Na(i#na-A!!e%&-" #n a 50ar(er-" &a!i!.

*.'.' T)e CMA (# #n0( a #%pre)en!i$e in$e!(i/a(i#n # ()e NSE (#e(er%ine ()e in!(i(0(i#n! in$#-$e in )0/e api(a- in-#! an#0(-#! r#% ()e e50i(" %arke(.

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*. Ken"a T#0ri!% ;#ar

S0&%i!!i#n

*..1 T)e C#%%i((ee %e( i() ()e Ken"a T#0ri!% ;#ar, #n '() Dee%&er

*+11. T)e C#%%i((ee a! in#r%e ()a( ()e a0!e! # ()e a-- # ()e

Ken"a !)i--in/ ere a! #--#!3

(i) Wienin/ 0rren( a#0n( eii( 0e (# a )i/) #i- i%p#r( &i--an inrea!e i%p#r(a(i#n # inra!(r0(0re #r e$e-#p%en(.(ii) T)e !)i--in/:! epreia(i#n a-!# #0- )a$e &een a0!e &" ()e/-#&a- e#n#%i $#-a(i-i(" a((ri&0(e (# ()e E0r# >#ne !#$erei/ne&( ri!i! an 0rren" !pe0-a(i#n a(i$i(ie! i()in ()e #rei/ne8)an/e %arke(.

O&!er$a(i#n!

*..* Fr#% ()e in(era(i#n i() ()e Ken"a T#0ri!% ;#ar, ()e C#%%i((ee#&!er$e ()e #--#in/3

(i) T)#0/) ()e rapi e-ine in ()e !)i--in/ )0r( ()e a//re/a(ee#n#%", ()e epreia(i#n a! &eneiia- (# () #rei/n (#0ri!(!an ()e (#0ri!% !e(#r !ine #rei/n (#0ri!( pr#0(! are prie in#rei/n 0rren" an ()i! %ean! ()a( -#a- e!(ina(i#n! an

Ken"an pr#0(! ere $iee a! a#ra&-e in (er%! # ire(e8peni(0re. T)ere a! inrea!e re$en0e #ne ()e )#(e-ier!, (#0r#pera(#r! an air-ine! #n$er(e ()e 0rrenie! in(# !)i--in/!.

(ii) T)ere ere ne/a(i$e ee(! a-!# in ()e !e(#r !ine #%e!(i(#0ri!% )a re0e re$en0e %ar/in!. T)e )i/) #%e!(i ra(e!re0e ()e appea- #r #%e!(i (#0ri!% in -ei!0re, &0!ine!! an#nerenin/ a! ini$i0a-! an #r/ani>a(i#n! !)i(e aB0!(e()eir !penin/ pri#ri(ie! (# #pe i() ()e )i/) in-a(i#n ra(e!.

(iii) T)e C;K:! %#ne(ar" p#-i" a(i#n! %ea!0re! in ()e #rei/n

e8)an/e %arke( )e-pe re!(#re #niene in ()e %arke( an!(a&i-i>e ()e !)i--in/.

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*. Ken"a P#r(! A0()#ri(" ?KPA@

S0&%i!!i#n!

*..1 T)e C#%%i((ee %e( i() ()e Ken"a P#r(! A0()#ri(", #n () Dee%&er

*+11. T)e C#%%i((ee a! in#r%e a! #--#!3

(i) T)e a%#0n( # i%p#r(! #%in/ ()r#0/) ()e p#r( # M#%&a!a )a!&een #n ()e ri!e. P#r( (rai a! )ea$i-" !kee in a$#0r #i%p#r(!, a (ren ()a( )a &een /r#in/ r#% "ear *++1. T)i! !)area! 9 i%p#r(! an 19. e8p#r(! in *+11.

(ii) T)ere a! a !-i/)( e-ine in ()e in i%p#r(! a! ()e !)i--in/ &ea%eeaker. T)i! a! &ea0!e ()e i%p#r(! &ea%e e8pen!i$e a! ()e!)i--in/ eakene an ()e #!( # i%p#r(a(i#n inrea!e !ine ()e"

are pai in #rei/n 0rren". T)i! #0- )a$e inrea!e ()e e%an#r #rei/n 0rrenie! in ()e %arke(.(iii) T)e #0n(r" )a! &een i%p#r(in/ a -#( # /rain! a! epi(e &" a

!(ea" ri!e in $#-0%e # /rain i%p#r(! #$er ()e "ear!. T)i! !)#!()a( ()e #0n(r" )a! &een epenin/ a -#( #n i%p#r(e ##.

(iv) T# 0!)i#n Ken"an! a/ain!( ()e ee(! # ()e e-ine # ()e !)i--in/,Ken"a P#r(! A0()#ri(" pr#$ie *9 p#r( #pera(i#n! (# en!0re ()a(ar/# # n#( in0r )ar/e!, %ain(aine ()e !a%e )ar/e! a! per ()e(ari ee(i$e 1!( # Fe&r0ar" *++ i() %in#r a%en%en(!,

re%#$e !annin/ $eriia(i#n )ar/e!, #n(ra(e ei/)( CFS! ()a()e-pe (# e#n/e!( ()e P#r( an ai-i(a(e ar/# %#$e%en(.(v) T)e A0()#ri(" )#pe (# 0p/rae ()e p#r( (# an E4p#r( &" *+1* an

a-!# !0&%i((e pr#p#!a-! #r e$e-#p%en( # ai(i#na- p#r(apai(". T)e A0()#ri(":! re0rren( e8peni(0re! !0) a! 0e- #re50ip%en( an %ain(enane # !pare par(! ()a( are p0r)a!e#$er!ee! ere a-!# ae(e.

O&!er$a(i#n!

*..* Fr#% ()e in(era(i#n i() ()e Ken"a P#r(! A0()#ri(", ()e C#%%i((ee#&!er$e ()e #--#in/3

(i) T)ere i! a re-a(i#n!)ip &e(een 0rren" -0(0a(i#n an ()e$#-0%e! # i%p#r(!. N#(a&-", ()e eakenin/ # ()e !)i--in/ -e (# a%ar/ina- r#p in i%p#r(!, &0( #$era-- ()e e%an #r i%p#r(! )a!re%aine )i/). T)i! i%p-ie! i( i! n#( p#!!i&-e (# re0e ()e i%p#r( &i--

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()r#0/) 0rren" epreia(i#n6 ra()er ()e G#$ern%en( nee! (# p0(in p-ae (ari an n#n4(ari &arrier! (# ea- i() ()e pr#&-e% # )0/ei%p#r(!.

*. Ken"a In!(i(0(e #r P0&-i P#-i" e!ear) an Ana-"!i! ?KIPP A@

S0&%i!!i#n

*..1 T)e C#%%i((ee %e( i() KIPPRA #n 1!( Dee%&er *+11. T)eC#%%i((ee a! in#r%e ()a( ()e a0!e! # ()e a-- # ()e Ken"a!)i--in/ ere a! #--#!3

(i) Lar/e 0rren( a#0n( eii( 0e (# a!( /r#() in i%p#r(pa"%en(! re-a(i$e (# !-# /r#() in e8p#r( reeip(!. T)i! p0(pre!!0re #n ()e !)i--in/ (# epreia(e.

(ii) G#$ern%en( in(r#0e a i!a- !(i%0-0! paka/e in *++ a0!in/G#$ern%en( e8peni(0re (# ri!e rapi-". T)e &0/e( eii( a-!#inrea!e !)#in/ ()a( ()e G#$ern%en( a! re-"in/ %#re #nC;K:! a$ane! an &" Sep(e%&er *+11, ()e C;K:! #$erra(ai-i(" !(## a( *.9 ;i--i#n. Inrea!e !penin/ &" ()eG#$ern%en( %a" )a$e p-a"e a &i/ par( in ()e epreia(i#n #()e !)i--in/.

(iii) M#ne(ar" e8pan!i#nar" !ine *++ i! re-a(e (# a!( /r#() inpri$a(e !e(#r rei( )i) a0!e in-a(i#nar" pre!!0re! in ()e

e#n#%". T)i! inire(-" #n(ri&0(e (# ()e a-- # ()e !)i--in/.(iv) T)e E0r#pe e&( ri!i! #re Bi((er" in$e!(#r! (# !)i( r#% E0r# (#

#--ar en#%ina(e a!!e(!. T)i! a0!e ()e #--ar (# appreia(ea/ain!( #()er 0rrenie! in-0in/ ()e Ken"a !)i--in/.

(v) C;K! ann#0ne%en( ()a( i( #0- !e-- #rei/n 0rrenie! ire(-"(# i%p#r(er! a0!e pani in ()e %arke(.

(vi) W)en ()e !)i--in/ !(ar(e a--in/, ini$i0a-! an ;ank! #0- )a$e(aken !pe0-a(i$e p#!i(i#n! !# a! (# &enei( r#% ()e e-inin/!)i--in/ ()r#0/) )#arin/ # #rei/n 0rrenie!. T)i! #0- )a$e

e!a-a(e ()e e-ine # ()e !)i--in/.

O&!er$a(i#n

*..1 Fr#% ()e in(era(i#n i() KIPPRA, ()e C#%%i((ee #&!er$e ()e nee(# -#!e-" %#ni(#r i!a- p#-i" !# a! (# re0e e8peni(0re #n n#n4e!!en(ia- an n#n4pri#ri(" i(e%! in ()e !)#r(4(er%. L##!e %#ne(ar"

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p#-i" a! a %aB#r a(a-"!( # ()e a-- # ()e !)i--in/ an !# i( !)#0-&e (i/)(ene (# rei/n #n in-a(i#n an e8e!! %#ne" in ()e e#n#%".In ai(i#n, ()e pr#&-e% # ()e ie 0rren( a#0n( eii( a!!(r0(0ra-6 )ene ()e nee (# )an/e Ken"a:! pr#0(i#n !(r0(0re(#ar! inrea!e e8p#r( pr#0(i#n.

*.1+E8p#r( Pr#%#(i#n C#0ni- ?EPC@

S0&%i!!i#n

*.1+.1T)e C#%%i((ee %e( i() EPC #n '() Dee%&er *+11. T)e C#%%i((eea! in#r%e ()a( ()e a0!e! # ()e a-- # ()e Ken"a !)i--in/ ere a!#--#!3

(i) Li%i(e e8p#r( pr#0( ran/e an re0e #rei/n e8)an/e

in-#!. T)i! )a! re0e ()e na(i#na- apai(" (# #$er ()ei%p#r( &i-- r#% ()e e8p#r(! pr#ee! an a-!# #n!(raine ()eapai(" # ()e (rea!0r" an C;K (# e%p-#" ee(i$e %#ne(ar"an i!a- p#-iie! ()a( i-- en!0re a !(a&-e e8)an/e ra(e.

(ii) Uner(ain(" #$er ()e Ara& !prin/ in ()e Mi-e Ea!( an N#r()Aria !(a(e! a0!e a ri!e in #i- prie!, )i) re!0-(e in a -ar/eri%p#r( &i--.

(iii) Ken"a )a &een in a )ea(e p#-i(ia- en$ir#n%en( #r ()e &e((erpar( # *+11 i() ()e 0p#%in/ e-e(i#n! an ()e ICC (ria-!

e&a(e. T)i! )a! %ae in$e!(#r! )# an(iipa(e e-e(i#n $i#-ene(# (ake # a0!in/ api(a- -i/)(.

(iv) Spe0-a(i#n &" i%p#r(er! !# a! (# /e( a$#ra&-e #rar p0r)a!e!in ()e ake # a epreia(in/ !)i--in/.

(v) T)e #!i--a(in/ !)i--in/ rea(e an 0ner(ain en$ir#n%en( #rpr#0(i#n an #()er !(r0(0ra- i!!0e!. I( a! #n0i$e #rp-annin/ #r pr#0(i#n. T)i! )a! ne/a(i$e-" i%pa(e #n -#n/(er% in$e!(%en(! an a-!# in0e api(a- -i/)(.

*.1+.* T)e EPC a-!# in#r%e ()e C#%%i((ee ()a( ()e eak !)i--in/ )a ap#!i(i$e i%pa( #n e8p#r(! earnin/!. ;0( ()i! a$an(a/e )a! n#( &een0--" e-( in ()e %arke( !ine ()e Ken"a e8p#r(! ra pr#0(! i()-i%i(e $a-0e ai(i#n. Ken"a -ak! )i/) $a-0e api(a- pr#0(!.

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O&!er$a(i#n

*.1+.7 Fr#% ()e in(era(i#n i() EPC, ()e C#%%i((ee n#(e ()a( ()eG#$ern%en( )a n#( rea(e ae50a(e #%e!(i &0!ine!! en$ir#n%en(()a( an -ea (# rapi e8p#r( /r#(). T)i! i! a0!in/ api(a- -i/)( ani!in$e!(%en( &" #rei/n in$e!(#r!. Sine inrea!e 0e- prie!#n(ri&0(e (# ()e a-- # ()e !)i--in/, ()e G#$ern%en( !)#0- in$e!( ina-(erna(i$e ener/" re!#0re!.

*.11 Ken"a In$e!(%en( A0()#ri(" ?KenIn$e!(@

S0&%i!!i#n

*.11.1 T)e C#%%i((ee %e( i() KenIn$e!( #n 19() Dee%&er *+11. T)eC#%%i((ee a! in#r%e a! #--#!3

(i) T)ere )a$e &een 0n!(ea" F#rei/n Dire( In$e!(%en( ?FDI@ in-#!(# ()e #0n(r" #$er ()e reen( "ear!. T)#0/) ()i! i! a %aB#r!#0re # inania- an (e)n#-#/ia- re!#0re (# ()e #0n(r", n#a/en" )a! &een %ana(e (# re#r ()e FDI in-#! in Ken"a%akin/ ()eir r#-e 0n#0%en(e.

(ii) T)e ea!e # #in/ &0!ine!! in Ken"a )a! e(eri#ra(e i() Ken"a&ein/ ranke 1+ #r ()e "ear *+1*. T)i! ae(! FDI ire(-" !inein$e!(#r! an( (# &e a!!0re # !e0ri(", #n0i$e &0!ine!!

en$ir#n%en( an %#!( i%p#r(an(-" %ini%a- &0rea0ra" an#rr0p(i#n.(iii) T)e #!( # #in/ &0!ine!! in Ken"a i! a-!# #rr"in/ !ine !#%e #

()e e!!en(ia- !er$ie! -ike ener/" are $er" e8pen!i$e an0nre-ia&-e. T)e G#$ern%en( !)#0- pr#$ie ()e nee!!ar"inra!(r0(0re an !er$ie! !# a! (# en#0ra/e #rei/n in$e!(#r! (##%e in$e!( in ()e #0n(r".

(iv) Man" #rei/n in$e!(#r! are 0na&-e (# !(ar(0p &0!ine!!e! in Ken"a0e ina&i-i(" (# ae!! -an. T)e G#$ern%en( !)#0- rea(e -an

;ank! in ea) an e$er" #0n(" !peiia--" #r in$e!(#r!.

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*.1* S)##- # E#n#%i!, Uni$er!i(" # Nair#&i

S0&%i!!i#n!

*.1*.1T)e C#%%i((ee %e( i() ()e S)##- # E#n#%i!, #n 1!( Dee%&er*+11. T)e C#%%i((ee a! in#r%e ()a( ()e a0!e! # ()e e-ine #()e !)i--in/ ere a! #--#!3

(i) Lak # -ear %#ne(ar" p#-iie!. C;K G#$ern#r in(er$ene r#%()e e%an !ie i/n#rin/ ()e !0pp-" !ie.

(ii) T)e Cen(ra- ;ank # Ken"a !)#0- )a$e prei(e p#!!i&-e ai-0rean a( a!( &0( ()ere a! !#%e -a8i(" #n ()e par( # C;K.

(iii) Marke( i!(#r(i#n!. T)e -e$e- # e8)an/e ra(e i! e(er%ine &"()e #re! # e%an an !0pp-" # #rei/n 0rren". Unern#r%a- ir0%!(ane!, ()ere !)#0- n#( &e a !)arp ri!e in ()e

e8)an/e ra(e. S#%e()in/ e-!e, ()ere#re, %a" )a$e a0!e ()e!)arp e-ine # ()e !)i--in/.

(iv) T)e in(erna(i#na- #re! -ike E0r# ri!i! an ()e Ara& !prin/ %a")a$e &een a ri$er a( ()e #n!e( &0( #0- n#( arran( ()e !)arpe-ine # ()e !)i--in/.

(v) Pre!!0re! r#% ()e inrea!e i%p#r( &i-- #0- )a$e #n(ri&0(e (#()e a-- # ()e !)i--in/. T)ere )a &een an inrea!e in i%p#r(a(i#n# #%%#i(ie! ()a( !)#0- n#( #rinari-" &e i%p#r(e -ike##!(0.

*.1*.* T)e S)##- # e#n#%i! 0r()er 0rni!)e ()e C#%%i((ee i() ()e#--#in/ in#r%a(i#n3

(i) T)e in(er$en(i#n %ea!0re! (aken &" C;K i-- )a$e !eri#0! i%pa(#n ()e /r#() # ()e e#n#%" a! pe#p-e i-- n#( )a$e %#ne" (#in$e!( a-()#0/) ()e in-a(i#n i-- &e (a%e in ()e !)#r( r0n.

(ii) L#n/ (er% rr#in/ #r e$e-#p%en( i! -ike-" (# -ea (# 0n0ee8pe(a(i#n &" ()e p0&-i. T)e G#$ern%en( i-- )a$e (# %ake!0&!(an(ia- rr#in/ (# %ee( ()#!e e8pe(a(i#n!.

O&!er$a(i#n!

*.1*.7 T)e C#%%i((ee #&!er$e ()a( ()e pri%ar" a0!e! # ()e epreia(i#n# ()e Ken"a !)i--in/ e8)an/e ra(e ere e#n#%i an a-!# %arke(i!(#r(i#n! 0e (# inee(i$e in(er$en(i#n an %#ni(#rin/ in ()e#rei/n e8)an/e %arke(!.

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7.+ COMME CIAL ;ANKS

7.1 E50i(" ;ank Li%i(e

S0&%i!!i#n!

7.1.1 On ()e a0!e! # ()e e-ine # ()e !)i--in/, E50i(" Mana/in/ Dire(#r&-a%e i( #n3 -ar/e #i- i%p#r( &i-- ?#i- #n!(i(0(e! * peren( #i%p#r(!@, pr#-#n/e -# in(ere!( ra(e! )i) ere 0!e (# i%p#r(#n!(r0(i#n %a(eria-! an #$er( #n!0%p(i#n, -ar/e an /r#in/%i-e -a!! i() a (a!(e #r i%p#r(e /##!, )ea$" inra!(r0(0rein$e!(%en(! in ()e #0n(r", pani &0"in/ &" i%p#r(er!, !e--4# #!)are! &" #rei/n in$e!(#r! a( ()e Nair#&i S(#k E8)an/e, a%#n/#()er a(#r!. He a((ri&0(e ()e re#$er" # ()e !)i--in/ (# ()e C;K!

ei!i#n (# rai!e ()e C;R ra(e (# 1 peren(, &0( a-!# &-a%e ()i! #r0rren( )i/) -enin/ ra(e! an in(er&ank -enin/ ra(e!. E50i(" ;ank i!#ne # ()e %#!( api(a-i>e ;ank!.

7.1.* D0rin/ ()eir !0&%i!!i#n! (# ()e Se-e( C#%%i((ee, E50i(" ;ankMana/in/ Dire(#r re!p#ne (# ()e 50e!(i#n! rai!e &" ()eC#%%i((ee re/arin/ i(! par(iipa(i#n in ()e in(er&ank %arke(, ()eDi!#0n( Win# # ()e C;K, an )e()er ()e ;ank )a reei$ean" arnin/ -e((er! #r #()er in(er$en(i#n! r#% ()e C;K. T)e

Mana/in/ Dire(#r rep#r(e ()e #--#in/ re/arin/ ()#!e i!!0e!3

(i) T)a( E50i(" ;ank )a n#( reei$e an" arnin/ -e((er! re/arin/i(! #rei/n e8)an/e (rain/ a(i$i(ie!, ()e 0!e # ()e Di!#0n( Win#, #r par(iipa(i#n in ()e in(er&ank -enin/ %arke(

(ii) T)e ;ank )a a-!# n#( &een !0!pene r#% par(iipa(in/ in ()e#rei/n e8)an/e %arke(, ()e 0!e # ()e Di!#0n( Win#, anpar(iipa(i#n in ()e in(er&ank -enin/ %arke(,

(iii) E50a--", ()e ;ank )a n#( reei$e an" a )#1 $i!i(! r#% ()e C;K

re/arin/ ()e !a%e %a((er! an )a n#( &een !0&Be( (# #()erre/0-a(#r" in(er$en(i#n! r#% ()e C;K.

7.1.7 T)e ;ank 0r()er pre!en(e in#r%a(i#n an a(a !)#in/ ()e -e$e- #()e ;ank:! par(iipa(i#n in #rei/n e8)an/e (rain/ an #rei/ne8)an/e e8p#!0re. N#(a&-", ()e ;ank ar/0e ()a( i(! #rei/n 0rren"#pera(i#n! ere ne/-i/i&-e re-a(i$e (# ()e na(i#na- #rei/n e8)an/e

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re!er$e! #r ()e %#n()-" i%p#r( &i--, )i) %ean! ()a( ()e ;ank )a!-i%i(e apai(" (# in-0ene ()e e8)an/e ra(e. ;e(een an0ar" *+11an Sep(e%&er *+11, ()e E50i(ie! ;ank re!er$e! ran/e &e(een US1'.** %i--i#n (# US 9. %i--i#n. I(! re!er$e! ere a( +.+1peren( # ()e re!er$e! )e- &" ()e C;K #r ()e peri# an0ar" *+11 (#

Sep(e%&er *+11. F#rei/n e8)an/e (rain/ in#%e # ()e ;ank )ari!en r#% K!)! *+ %i--i#n in Mar) *+11 (# K!). + %i--i#n inSep(e%&er *+11, &0( i(! pr#p#r(i#n (# ()e (#(a- #pera(in/ in#%ere%aine a( a( 7 peren( 0rin/ ()e !a%e peri#. E$en ()#0/)E50i(" ;ank i! #ne # ()e -ar/e!( ;ank! in (er%! # a!!e(!, ()e;ankrei(era(e ()a( i( a! n#( a %aB#r p-a"er in ()e #rei/n e8)an/e(rain/ re-a(i$e (# #()er ;ank! )#!e #rei/n e8)an/e (rain/ #0-repre!en( 1+ (# 7+ peren( # ()eir (#(a- #pera(in/ in#%e!?!ee anne8@.

7.1.9 Re!p#nin/ (# a 50e!(i#n a( #rei/n e8)an/e (rain/ #r -ien(!,()e ;ank ar/0e ()a( i( #e! n#( par(iipa(e in ea- (ran!a(i#n!, in#( )#- an" %aB#r -ien( a#0n(! in #rei/n e8)an/e, an ()ere#re)a n#( n#(ie an" 0n0!0a- -0(0a(i#n! in #rei/n e8)an/e (rain/$#-0%e!. T)e ;ank )#e$er -ariie ()a( i( )e- #rei/n e8)an/een#%ina(e 0n! ?e50i$a-en( (# K!). 19 &i--i#n@ -en( (# E50i(" &"!e$era- in(erna(i#na- in!(i(0(i#n! ?#r e8a%p-e ()e In(erna(i#na- FinaneC#rp#ra(i#n@ a( -# in(ere!( ra(e! #r #n4-enin/ (# -#a- in!(i(0(i#n!

in$#-$e in inra!(r0(0re e$e-#p%en(!. In a( E50i(" )a e8(ene#rei/n e8)an/e en#%ina(e -#an! (# a e in!(i(0(i#n!, !0) a! US+ %i--i#n (# ()e KPLC. Tran!a(i#n! re/arin/ ()e!e 0n! )a$e%ini%a- i%pa( in eakenin/ ()e !)i--in/ e8)an/e ra(e !ine ()e 0n!are n#( e8)an/e (# Ken"a !)i--in/!, in!(ea ()e!e 0n! #0- )e-p!(ren/()en ()e !)i--in/.

7.1. T)e Mana/in/ Dire(#r re0(e -ai%! ()a( )e )a in an" a"par(iipa(e in an" G#$ern%en( p#-i" #r /i$en #pini#n (# ()e C;K

re/arin/ ()e a-- # ()e Ken"a !)i--in/. In!(ea, ()e Mana/in/ Dire(#r!ai ()a( &ein/ ()e C)air # ()e i!i#n *+7+, )e #(en e8pre!!e )i!#pini#n! re/arin/ Ken"a:! e$e-#p%en(. He p#in(e #0( ()a( )i!par(iipa(i#n in ()i! ini(ia(i$e #0- n#( /i$e E50i(" 0n0e a$an(a/e#r in-0ene in G#$ern%en( #n(ra(! !ine %0) # ()e in#r%a(i#n#n i!i#n *+7+ pr#/ra%%e! i! in ()e p0&-i #%ain, an 0r()er ()a(

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)i! r#-e in ()i! ini(ia(i$e a! n#( #r pr#i( &0( (# &e # !er$ie (# ()e#0n(r".

7.1.' T)e ;ank a-!# i!#0n(e ()e $ie ()a( i( a! a$#0re in ()eaarin/ # G#$ern%en( #n(ra(! #r G#$ern%en( 0n! (# ()e Y#0()

#r e8a%p-e. Inee, ()e ;ank -ariie ()a( ()#0/) i( )a reei$eK!). 9++ %i--i#n r#% ()e G#$ern%en( #r #n4-enin/ (# (ar/e( /r#0p!!0) a! ()e "#0(), i( )a a-a"! %0-(ip-ie ()e a%#0n( i( -en! 0ner()i! pr#/ra% ?a! re50ire 0ner ()e arran/e%en(@a( a -# ra(e.

O&!er$a(i#n!

7.1. I( a! )#e$er apparen( ()a( ()e Mana/in/ Dire(#r # E50i(" ;ank,#in/ (# )i! pr#%inen( r#-e in inania- !er$ie! !e(#r () -#a--"an in(erna(i#na--", a! -#!e-" a!!#ia(e i() ()e i!i#n *+7+, a

G#$ern%en( P#-i" pr#/ra% i() !0&!(an(ia- i%pa( #n ()e ire(i#n# G#$ern%en( !penin/ pri#ri(ie!. I( i! e-( ()a( !i((in/ in !0) a#%%i!!i#n #0- pr#$ie /r#0n! #r #n-i( # in(ere!( #r a0!ei!ae(i#n a%#n/ #()er ;ank!. I( i! ()ere#re ii0-( (# re%#$e ()e(a/ ()a( E50i(" ;ank i! a$#0re &" ()e G#$ern%en( #r i! pri$i-e/e i()e CEO #n(in0e! (# a$i!e G#$ern%en( ()r#0/) ()e i!i#n *+7+!ere(aria(.

7.1. T)a( e!pi(e ()e !0&%i!!i#n a!!er(in/ ()a( ()e ;ank a! a ne( -ener (#()e in(er&ank %arke(, ()e ;ank en( (# ()e Di!#0n( Win# 19

(i%e! in *+1+ an !-i/)(-" #$er + (i%e! in *+11 ?anne8 # E50i(";ank@ ()i! i! a #n(rai(i#n (# ()e -ai% ()a( ()e ;ank i! a ne( -eneran a/ain!( ()e rea!#n! #r re!#r(in/ (# ()e in#. T)e ;ankrr#e r#% ()e Di!#0n( Win# in e8e!! # ()e !(ip0-a(e/0ie-ine! # (ie a eek. I( i! e$ien( ()a( ()e ;ank rr#e 0n!r#% ()e Di!#0n( Win# e!pi(e i(! !0&%i!!i#n ()a( i( )a n#(. T)e;ank a! ()ere#re n#( ani in i(! in#r%a(i#n (# ()e C#%%i((ee.

e#%%ena(i#n

7.1.1+Fr#% ()e #re/#in/, i( i! re#%%ene ()a( !eni#r ;ankin/ #iia-! in()e #0n(r" !)#0- &e e8-0e r#% ire(-" !i((in/ in G#$ern%en(p#-i" C#%%i((ee! #r G#$ern%en( #%%i!!i#n! (# a$#i #n-i( #in(ere!(, #r (# a0!e i!ae(i#n a%#n/ #()er ;ank!.

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7.* Ken"a C#%%eria- ;ank Li%i(e

S0&%i!!i#n

7.*.1 T)e C#%%i((ee %e( i() ()e %ana/e%en( # Ken"a C#%%eria- ;ank?KC;@ #n 19() Dee%&er *+11. T)e C#%%i((ee a! in#r%e ()a( ()ea0!e! # ()e a-- # ()e Ken"a !)i--in/ ere a! #--#!3

(i) P#-i(iari!i! in ()e Mi-e Ea!( an N#r() Aria ?MENA@ #0n(rie!re!0-(e in a !pike in ()e prie! # #i- in(erna(i#na--". Ken"a:!#n!0%p(i#n # #i- re%aine 0n)an/e !# ()e !pike rea(e a !(rain #n()e &a-ane # pa"%en( an #rei/n 0rren" re50ire%en(! (# pa" #r#i- i%p#r(!.

(ii) T)e ri!i! in E/"p( i!r0p(e ()e (ea a0(i#n !ine E/"p( &0"! 7+ #Ken"a:! (ea ()0! re0in/ ()e #rei/n e8)an/e (# Ken"a.

(iii) T)ere a! a !e--4# in ()e e50i(ie! %arke( /-#&a--" an e!peia--"ae(in/ e%er/in/ an r#n(ier %arke(!. F#rei/n in$e!(#r! a-!# !#-4#()eir !)are! a( ()e NSE ()ere&" p0((in/ %#re pre!!0re #n ()e Ken"a!)i--in/ a! ()e in$e!(#r! /)( #rei/n 0rren".

(iv) T)e C;K! re0(i#n # ()e C;R ra(e ear-" *+11 (# . %a" )a$einrea!e rei( e8pan!i#n an inrea!e e%an #r i%p#r(e /##!.

(v) Dr#0/)( in Ken"a )a an ee( #n ## an )"r#e-e(rii("pr#0(i#n. S# ()e #0n(r" )a (# i%p#r( ## an %#re #i- #r p#erpr#0(i#n inrea!in/ e%an #r #rei/n 0rren" ?!ee anne8 @.

O&!er$a(i#n

7.*.* Up#n in(err#/a(i#n # ()e KC; %ana/e%en(, ()e C#%%i((ee %ae()e #--#in/ #&!er$a(i#n!3

(i) T)a( ()e C;K:! in(er$en(i#n in ()e %arke( a! -#n/ #$er0e(ii) T)ere a! api(a- -i/)( in ()e e#n#%" an ()i! #0- )a$e &een

an ai(i#na- a0!e # ()e e-ine # ()e Ken"a !)i--in/(iii) T)e ;ankenie in$#-$e%en( in an" !pe0-a(i#n !(a(in/ ()a( i(

par(iipa(e! in ()e #rei/n e8)an/e %arke( a#rin/ (# r0-e! anre/0-a(i#n! in p-ae.(iv) T)e ;ank )a! a-a"! )e- api(a- in #rei/n a!!e(! a( &e-# ()e

%a8i%0% -i%i( # ()e C;K e$en &e#re ()e re/0-a(#r re$i!e ()e-i%i( #nar!.

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7.7 C##pera(i$e ;ank# Ken"a Li%i(e

S0&%i!!i#n

7.7.1 T)e C#%%i((ee %e( i() ()e %ana/e%en( # C##pera(i$e ;ank #Ken"a #n (# #a!i#n!, 19() Dee%&er *+11 an *() an0ar" *+1*.In ()e %ee(in/!, ()e C#%%i((ee a! in#r%e ()a( ()e !#%e # ()ea0!e! # ()e a-- # ()e Ken"a !)i--in/ in-0e ()e pre!ene # a ie0rren( a#0n( eii(, &0i-in/ # re!er$e! &" C;K, an !er$iin/ #e8(erna- e&(!. T)e rea!#n! #r ()e ie 0rren( a#0n( eii( ere3

(i) Lar/e an /r#in/ i%p#r(! &i-- 0e (#3 )i/) epenen" #n #i-i%p#r(! )#!e in(erna(i#na- prie! are 0n!(a&-e, inrea!ei%p#r(a(i#n # !e#n )an ar! )i) )a$e a0!e an inrea!e in0e- #n!0%p(i#n, i%p#r(a(i#n # ##!(0 0e (# r#0/)(,

i%p#r(a(i#n # n#n4e!!en(ia- #%%#i(ie!, inrea!e i%p#r(a(i#n# %a)iner" an e50ip%en( #r #n/#in/ #n!(r0(i#n!, a%#n/#()er!.

(ii) S(a/nan( !0pp-" # #rei/n 0rren" 0e (# ()e #--#in/3re0eearnin/! r#% !a-e # (ea, #ee, )#r(i0-(0re 0e (# ()e inania-ri!i! in ()e E0r#pean Uni#n an p#-i(ia- in!(a&i-i(" in ()e MENAre/i#n )i) are #0r %ain (rain/ par(ner!6 an, re0ere%i((ane! r#% ()e Dia!p#ra.

7.7.* In ()e pre!en(a(i#n!, C##pera(i$e ;ank pr#p#!e ()e #--#in/ (# ()eC#%%i((ee ()a( #0- )e-p in %i(i/a(in/ ()e pr#&-e% # ()eepreia(i#n # ()e !)i--in/3

(i) T)e #0n(r" !)#0- e$e-#p ini(ia(i$e! (# %i(i/a(e ()e i%p#r( &i--in ()e #--#in/ area!3• En#0ra/e %#re r0i(0- -#a- pr#0(i#n # ## an 0!e i( (#en)ane !(ra(e/i ## re!er$e!• De$e-#p G#$ern%en( p#-iie! (# )iner i%p#r(a(i#n # n#n4

e!!en(ia- #%%#i(ie! an %a!! i%p#r(a(i#n # !e#n )an ar!• En)ane G#$ern%en( in$e!(%en(! in renea&-e ener/"?!eeanne8 1+@.

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O&!er$a(i#n

7.7.7 T)e C#%%i((ee in!(r0(e ()e ;ank (# 0rni!) in#r%a(i#n #n an0%&er # in(era(i#n! ()e ;ank )a i() ()e C;K 0rin/ ()e peri#)en ()e !)i--in/ a! in a ri!i! an ()e !)are)#-in/ # ()e ;ank. T)e#%%i((ee e!(a&-i!)e ()e #--#in/ r#% ()e C##pera(i$e ;ank%ana/e%en(3

(i) T)a( ()e ;ank i n#( reei$e an" arnin/ -e((er! r#% ()e C;Kre/arin/ ()eir #rei/n e8)an/e (rain/, 0!e # ()e Di!#0n( Win# # ()e C;K an par(iipa(i#n in ()e in(er&ank %arke(.

(ii) T)e ;ank a! n#( !0!pene r#% ()e #rei/n e8)an/e %arke(,Di!#0n( Win# # ()e C;K an par(iipa(i#n in ()e in(er&ank-enin/ %arke(.

(iii) T)e ;ank reei$e a (ea% # (# C;K !(a )# arrie #0( an

#n!i(e re$ie # ()eir #rei/n e8)an/e (rain/ a(i$i(ie! &0( ()e;ank i n#( reei$e a #r%a- rep#r( # ()e re$ie.

(iv) T)a( ()e ;ank )a! a (#(a- # 17 ire(#r! )# )#-! 9!)are)#-in/ in ()e ;ank6 # ()e ire(#r! ere e-e(e &" ()e##pera(i$e )#-in/ !#ie(", * are e-e(e &" ()e #rinar" !)are)#-er!, 1 i! ()e #%%i!!i#ner # ##pera(i$e!, 1 i! ()erepre!en(a(i$e # ()e Per%anen( Sere(ar" in )ar/e # Trea!0r"an 1 i! ()e Mana/in/ Dire(#r # C##pera(i$e ;ank # Ken"a.

(v) T)e ;ank !(a(e ()a( ()ere a! n# !(a !ake 0rin/ ()e peri#

# 0ne (# Dee%&er *+11. T)e #n-" !(a ()a( -e( 0rin/ ()eperi# re(ire $#-0n(ari-".

(vi) T)a( ()e Ken"a C##pera(i$e C#ee E8p#r(er! L( i! n#( #ne&" C##pera(i$e ;ank ()#0/) !#%e # ()e e8p#r( #%pan":!ire(#r! ere a-!# ire(#r! in ()e C##pera(i$e ;ank ar.T)e!e ire(#r! ere e-e(e &" ()e #ee ar%er! )# are!)are)#-er! in () #%panie! ?!ee anne8 11@.

(vii) I( a! 0r()er #&!er$e ()a( ()i! #%pan" i! #ne )#-e &"##pera(i$e ar%er! an !# ()ere i! n# e$iene (# #nne( ()e%

i() an" %a-pra(ie! re-a(e (# #rei/n e8)an/e (rain/.(viii) T)e ;ank a%i((e (# )a$e !e#ne (# # i(! !(a (# ()e Ken"a

C##pera(i$e C#ee E8p#r(er! L( #r (e)nia- !0pp#r( ina%ini!(ra(i#n # ()e C#%pan".

(ix) T)e C#4#pera(i$e )#-in/ !#ie(" )e- ' # ()e (#(a- !)are! #()e ;ank )i-e ()e re%ainin/ 7 !)are! are )e- &" in$e!(#r!()r#0/) ()e Nair#&i S(#k E8)an/e. O ()e 7 !)are! )e- &"

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in$e!(#r! a( ()e NSE, 9 are )e- &" ()e ;ank ire(#r!. T)eC#%%i((ee n#(e ()a( ()e in#r%a(i#n a! p0&-i-" a$ai-a&-e.

(x) T)a( !#%e # ()e ire(#r! # ()e ;ank !#- ()eir !)are! # ()e;ank in ()e NSE in-0in/ ()e MD # C##pera(i$e ;ank )# )a!#- #ne ()ir # )i! !)are! in ()e ;ank?appr#8i%a(e-" #r()

K!)!.7*+ Mi--i#n in ()e #0r!e # ()e "ear *+11@. H#e$er, ()e!e!a-e! ere n#( re-a(e (# ()e $#-a(i-i(ie! # Ken"a:! !)i--in/e8)an/e ra(e.

(xi) T)a( ()e ;ank #pera(e! #n a #rei/n 0rren" -i%i( #appr#8i%a(e-" 7. a/ain!( a #rei/n e8)an/e e8p#!0re -i%i( #*+ ?1+ a(er re$ie # #rei/n e8)an/e e8p#!0re -i%i(!@.

e#%%ena(i#n!

7.7.9 ;a!e #n ()e !0&%i!!i#n! &" ()e C##pera(i$e ;ank %ana/e%en(, an()e a( ()a( ()e ;ank %ain(ain! a $er" -# #rei/n e8)an/ee8p#!0re, ()e C#%%i((ee #0n n# in#r%a(i#n (# !)# ()a( ()e ;ank)a #%%i((e an" %a-pra(ie! re/arin/ (rain/ in #rei/ne8)an/e.

7.9 Ci(i;ank -i%i(e

S0&%i!!i#n

7.9.1 T)e C#%%i((ee %e( i() ()e %ana/e%en( # Ci(i;ank #n 1()Dee%&er *+11. T)e %ana/e%en( (ea% # ()e ;ank #0(-ine &e#re()e C#%%i((ee ()e a0!e! # ()e a-- # ()e Ken"a !)i--in/ a! #--#!3

(i) Perep(i#n! a( Ken"a:! #r()#%in/ e-e(i#n! an ri!in/p#-i(ia- a(i$i(" %a" )a$e a0!e Bi((er! in ()e #rei/n e8)an/e%arke(.

(ii) T)e /-#&a- e#n#%" a! a-!# in (0r%#i- anpa!!in/ ()r#0/)0ner(ain (i%e!. T)ere a! a !(ea" inrea!e in ()e e%an #

#rei/n 0rrenie!.(iii) T)e -##!e %#ne(ar" p#-i" a! a %aB#r a0!e !ine ()e in(ere!(

ra(e! ere e8(re%e-" -# an ()e in-a(i#n ra(e a! )i/) %akin/i( 0na((ra(i$e (# )#- a!!e(! in !)i--in/!, )ene ()e )0/e e%an#r #rei/n 0rrenie!.

(iv) S(r#n/ e#n#%i /r#() an i!a- !penin/ #n(in0e (# !0k ini%p#r(!, ienin/ ()e 0rren( a#0n( eii(!.

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(v) T)e epreia(i#n a! ae-era(e &" a !)arp ri!e in in-a(i#n inear-" *+11 a0!e &" p##r rain! a/ain!( a &ak/r#0n # ri!in/## prie! an 0e- prie!.

(vi) W)en ()e !)i--in/ !(ar(e (# eaken, %#e!( !pe0-a(i$e -#!inrea!e ()e pae #r epreia(i#n a! ()e C;K !ee%e n#( (#

)a$e an appe(i(e (# in(er$ene in ()e %arke(.

O&!er$a(i#n!

7.9.* Fr#% ()e in(era(i#n i() ()e %ana/e%en( # Ci(i ;ank, ()eC#%%i((ee #&!er$e ()e #--#in/3

(i) T)a( ()e C;K:! e-a"e in(er$en(i#n #0- )a$e &een a %aB#r#n(ri&0(in/ a(#r # ()e !)arp epreia(i#n # ()e !)i--in/.

(ii) T)e ;ank:! #rei/n e8)an/e (rain/ a! 50e!(i#na&-e !ine i(

reei$e * -e((er! r#% C;K #r in!pe(i#n an ()e C;K %ae #0r?9@ 0n!)e0-e $i!i(! (# ()e ;ank 0p#n )i) ()e re/0-a(#rin!pe(e ()e #rei/n e8)an/e (rain/ &" ()e ;ank.

(iii) T)e ;ank i n#( ae!! ()e in(er&ank -enin/ in# 0rin/ ()eperi# # ()e a-- # ()e !)i--in/ !ine i( a! -i50i en#0/).

e#%%ena(i#n!

7.9.7 T)e C#%%i((ee #&!er$e! ()a( ()e ;ank )a inrea!e a%#0n( #

(rain/ in #rei/n e8)an/e, pr#&a&-" e-- i()in ()e -e/a- -i%i(!?a(()a( (i%e, ()e #rei/n e8)an/e e8p#!0re -i%i(a! *+ # #reapi(a-@ a( ()e (i%e. H#e$er, ()e C#%%i((ee re#%%en! ()a( ()eC;K !)#0- inrea!e i(! %#ni(#rin/ (##-! (# en!0re ()a( e8e!!i$e(rain/ in #rei/n e8)an/e #e! n#( ae( ()e /enera- !(a&i-i(" # ()e!)i--in/.

7. Fa%i-" ;ank Li%i(e

S0&%i!!i#n

7..1 T)e C#%%i((ee %e( i() ()e %ana/e%en( # Fa%i-" ;ank #n 19()

Documents

Final Report of the Parliamentary Select Committee on the Decline of the Kenya Shilling Against Foreign Currencies - February 2012