CBK governor who rewrote the rules inside Kenya's central bank

When Micah Cheserem walked into the Central Bank of Kenya in 1993, he was stepping into an institution under pressure from every direction.

The economy was strained, confidence in financial systems was shaky, and the internal machinery of the bank itself was struggling to keep pace.

Speaking in a CBK YouTube series dubbed CBK @60, which features reflections from former CBK governors since the institution’s establishment, Cheserem revisits how sudden his appointment was and how quickly he had to adjust.

“I was working in Unilever Malawi. The chairman of Unilever Kenya rang me at 3 o’clock Malawi time, 4 o’clock Kenya time. The radio said I had been appointed governor of Central Bank,” he recalled.

He says he even questioned whether the news was real before reaching out to then-President Daniel Arap Moi, who told him to take up the role immediately.

“I told the President I needed to give notice. He said, in that case, start on Tuesday.”

That abrupt transition would define the beginning of a tenure that was less about routine administration and more about institutional repair.

At the time, Kenya’s economy was dealing with high inflation, unstable exchange rates, and weak foreign reserves.

But inside the Central Bank, Cheserem found another challenge: an institution struggling with morale and structure.

“The shilling was falling in value. There was no foreign exchange. Staff were demoralised,” he said.

He also points to how key technical staff had been moved around in ways that weakened the institution’s capacity. One early decision for him was simply restoring critical personnel back into roles where they were needed.

But the problems were not only technical. They were also cultural.

Cheserem describes a Central Bank that operated with a strong hierarchy and distance between leadership and staff.

The governor’s office, he recalls, was physically and symbolically separated from the rest of the institution.

That structure, he felt, needed to change.

“I told them that is the last time I want to see that kind of system. From tomorrow, sit in your office. I will carry my briefcase,” he said, describing how he began dismantling formal barriers inside the bank.

He introduced a more visible leadership style, walking through departments and interacting directly with staff rather than remaining behind closed doors.

The idea, he suggests, was not about breaking tradition for its own sake but about improving accountability and visibility.

“If it must be an office, it must be a place where you can see what is going on,” he said.

One of the earliest internal changes involved basic workplace discipline. Staff attendance and working routines were tightened, a move that initially created discomfort inside the institution.

“I had to bring in discipline. You have to be there at 8,” he said.

He even ordered the installation of CCTV cameras at entrances, a decision that sparked internal debate at the time. For Cheserem, it was about transparency in operations rather than surveillance as punishment.

Still, not all changes were immediately welcomed. Some staff reportedly felt the institution was becoming too rigid.

But over time, the intention behind the reforms became clearer. The goal was not control, but consistency in how a critical national institution functioned.

Beyond discipline, Cheserem also focused on staff welfare and long-term institutional stability. One of the more unexpected debates involved something as simple as tea for staff.

At first, senior management argued it was not feasible to provide tea for the entire workforce due to numbers. Cheserem pushed for a solution that included all staff, not just senior levels.

He also pushed for restructuring pay components, arguing that pensions and retirement outcomes needed to be strengthened through a more coherent salary structure.

“I want to consolidate so that when you retire, you have a better pension,” he said, describing the thinking behind the reforms.

He also introduced structured retirement preparation for staff nearing exit, an effort aimed at easing transitions out of service rather than abrupt departures.

Cheserem also targeted what he viewed as unnecessary administrative layers that slowed down decision-making.

In one instance, he questioned why large volumes of exchange control paperwork were still being processed years after their relevance had faded.

He described a system that, in his view, had become a channel for inefficiency and potential abuse.

In response, parts of the exchange control framework were dismantled, a move that aligned with broader economic reforms taking place in the country at the time.

The goal, he argues, was to reduce friction in the system and close opportunities for rent-seeking behavior.

A defining feature of Cheserem’s tenure was his emphasis on visibility and direct engagement. He rejected the idea that leadership should be distant or purely administrative.

He also challenged the idea of “acting” positions that left roles in prolonged temporary status, arguing that institutions function better when responsibilities are clearly assigned.

In his view, decision-making needed to be faster and clearer, especially during a period of economic instability.

Looking back, Cheserem describes the Central Bank as having moved from a rigid, hierarchical structure to a more responsive institution.

But he is also careful to place the transformation in context. It was not only leadership style that mattered, but also teamwork across the institution and broader policy alignment with government.

He credits staff and fellow officials for playing a key role in stabilising the system during a turbulent period.

Today, he points to Central Bank autonomy as one of the most important legacies of that era, arguing that limiting political interference has helped strengthen monetary policy over time.

For him, the deeper lesson is not just about reform, but about institutional culture.