While the Central Bank of Kenya CBK, was not a Constitutional body under the Old Constitution, it has been given a new enhanced status as a Constitutional State Organ under the Constitution of Kenya 2010. Chapter 12 - Public Finance, Part 7 - Financial Officers and Institutions, Article 231, excerpts:
231. (1) There is established the Central Bank of Kenya.
(3) The Central Bank of Kenya shall not be under the direction or control of any person or authority in the exercise of its powers or in the performance of its functions.
The authority and autonomy of the CBK is important when one recalls that a weakened CBK was at the very center of the Goldenberg mega-scandal which siphoned billions of shillings out of Kenya's currency reserves in the late 1980s and early 1990s.
Roles and Functions
(2) The Central Bank of Kenya shall be responsible for formulating monetary policy, promoting price stability, issuing currency and performing other functions conferred on it by an Act of Parliament.
The CBK has traditionally played other roles not mentioned above such as the mobilisation of internal Public Debt and extension of overdraft facilities to the National Government. This is expected to continue as the country legislates and implements the provisions of the New Constitution.
The Public Finance Management Act 2012 assigns the Central Bank the custody of both National and County Funds. Having said that though, the Act does permit a County Secretary responsible for Finance, to opt for a private Bank for the custody of the County Revenue Fund. Otherwise, it is generally expected that most public funds will be kept with the Central Bank once a national ICT inter-connectivity is in place.
The New Constitution is silent on the composition and tenure of the Directors of the Central Bank and instead allows legislation to provide for this:
(5) An Act of Parliament shall provide for the composition, powers, functions and operations of the Central Bank of Kenya.
One can only hope that the CBK Act will be fine-tuned to fit in with the new constitutional dispensation currently sweeping the country.