Stanley Munga Githunguri and his family:Stanley Githunguri, the former Kiambaa MP and businessman many consider to be one of the wealthiest people in Kenya. PHOTO | FILE
Githunguri, the banker who had President’s ear
The following conversation between Mzee Jomo Kenyatta and former National Bank executive chairman Stanley Munga Githunguri took place when the founding president sought a loan some time in the 1960s.
“What will be the interest rate if I decide to take the loan?”
“The interest will be eight per cent, Mzee,”
“And what interest do you pay on my money that you have been keeping?”
“We pay you four per cent.”
“And now that I want to take a loan you are going to charge me at eight per cent?”
“That is how banks work.”
“Okay,” Mzee responds and lapses into a deep reflection. Inwardly, Mr Githunguri is congratulating himself. It is not every day that a banker gets to successfully sell a loan to a president and commander-in-chief of the armed forces.
“Young man, you know all this is very interesting.”
“Yes, Mzee,” Mr Githunguri responds, still pleased with himself. Then Mzee delivers the killer punch.
“Is that what you had gone to learn in America?” the President asks, alluding to the young banker’s studies abroad.
The conversation is contained in Mr Githunguri’s unpublished memoirs seen by the Sunday Nation.
The matter of the loan ends there. But it would appear that questions on the interest rate — particularly on the gap between what banks pay for deposits and what they charge for loans — were troubling many people, including Mzee Kenyatta, even in those early days of Kenya’s independence.
During that encounter, Mr Githunguri was the branch manager of the National Bank in Nakuru. Instead of Mzee visiting the bank, Mr Githunguri would be summoned to Nakuru State House to personally take care of the President’s transactions. Mr Githunguri would later rise to become the bank’s CEO.
The unpublished memoirs contain many interesting episodes in the life of a man considered to be one of the wealthiest Kenyans. They reveal some of the perplexing contradictions of a career in the civil service for young university graduates educated overseas or at the then prestigious Makerere University in Uganda.
Many of them found they had to revaluate their expectations in a bureaucracy inherited from the British colonialists. The memoirs also reveal the power play between different government departments and the individuals who headed them.
Returning from the US with a bachelors degree, Mr Githunguri was hired as a district officer (DO) immediately he arrived. He recalls that at the time, he believed it was an important position.
“My first posting was Meru with my base in Chuka. I first reported to Embu to Mr Eliud Mahihu who was the provincial commissioner (PC). For some reason, he didn’t like me and referred to me as the ‘American cowboy’. I later discovered that administrators who joined the service under the colonial government were uncomfortable with the more educated young entrants,” he says.
Mr Githunguri was quickly disillusioned when he discovered that his duties included collecting tax for the government. The PC had set targets for every DO. The method of collecting taxes was a cocktail of coercion and outright intimidation.
He recalls that DOs became some of the most hated people by wananchi. Yet they had to meet set targets within given deadlines. One of his efforts to hit the target saw him get into a protracted battle with a local magistrate.
“One day, we arrested more than 400 tax defaulters. For some reason, the magistrate released them on a free bond. None of them returned to court the following day as ordered. I was incensed. We had done our job yet we couldn’t meet the target set by Mr Mahihu and we had nothing to show for it to mitigate for our failure,” he says.
As the DO, he was in charge of housing for civil servants working within the division. He sent a messenger to call the magistrate to his office in the hope that they could find a way of working together. The magistrate refused to go to Mr Githunguri’s office.
“I decided to go to his house which was behind the office. My efforts to remonstrate with him ended in a blazing row. He told me that he was not my subordinate and that I couldn’t order him to do anything. In turn, I ordered him to vacate his house. He refused. With that I called the police and ordered them to throw him out. I gave him a police Land-Rover to take him to his boss at the headquarters in Meru town,” says Mr Githunguri.
The matter came to the attention of the district commissioner (DC) who ordered Mr Githunguri to report to Meru where he found the magistrate, the DC and the chief magistrate who was an Asian. He was told to apologise to the magistrate and let the matter rest.
“Over my dead body,” he replied. “You give me the responsibility of collecting taxes. You give me targets and deadlines. How do we ever hope to meet them when he is setting free people who refuse to pay tax? If anybody is owed an apology, that person is me.”
The chief magistrate intervened and said the matter was best forgotten and told Mr Githunguri to return to Chuka. Mr Mahihu came to learn of the incident and his opinion was that the young DO should have been sacked.
Mr Githunguri was to get into trouble with the PC sooner than he had expected. It happened that President Jomo Kenyatta was planning a visit to Chuka. It was decided that since the DO was the most senior civil servant, the President would have tea in his house. Mr Mahihu went to personally inspect the government house that Mr Githunguri was occupying.
“Mr Mahihu said that my curtains were not good enough for a house that the President was coming to visit. He ordered me to go and buy new and better curtains. I felt insulted. On my salary, I could not afford anything better,” he says.
The young DO then told his boss: “Sir, these are my standards. I can’t afford anything else. If you are keen on setting presidential standards in my house, please go ahead.”
The PC was furious and promised to deal with him as soon the presidential visit was over.
Mr Mahihu kept his promise. Before the end of the day, he got a transfer letter sending him to Isiolo, then considered a remote outpost with security challenges.
Mr Githunguri reckoned that the beginning of the end of his career had come. He travelled to Nairobi and sought the help of Mr Mbugua wa Githere, an influential and well-connected businessman.
“His opinion was that the most immediate thing was to get me out of Mahihu’s area of jurisdiction. Through his connections, he managed to secure for me a six-month course at the Kenya Institute of Administration (KIA),” he says.
After his stint at KIA, he was posted to the Coast region and was stationed at Kipini in Tana River district. It was in Kipini that he first ventured into business. A local beer distributor encouraged him to open a bar. Later on, he opened an outlet to sell mnazi (palm wine) making Sh4,000 in profit in the first three months.
Before joining the civil service, he had signed a Sh4,000 bond to ensure he worked for the government for four years. Now that he had enough money to pay for the bond, he decided it was time to quit the civil service. He dispatched a signal of his resignation to Mombasa and left without waiting for a response.
Back in Nairobi, he was recruited as a management trainee by the National Bank which later sent him to Britain for a nine-month course in banking. It was upon his return that he was sent to Nakuru as the branch manager. It was here that he met Mzee Kenyatta and, with time, they became firm friends. It is believed he was among the last people Mzee Kenyatta spoke to on the phone on August 22, 1978, the day he died.
“In the course of interactions with Mzee, I came to know most of the people who were close to the President. Some of them were senior civil servants such as Isaiah Mathenge (then Rift Valley PC) and Central Bank Governor Duncan Ndegwa,” he says.
He also met the fiery politican Kihika Kimani who was the chairman of Ngwataniro Mutukanio, a land-buying company. The giant company had an account with the Standard Bank but Mr Githunguri convinced the company to transfer it to National Bank.
“Mr Kimani could not understand bank transfers and preferred dealing with hard cash. He went with a group of women to the Standard Bank and withdrew all the cash. The women then ferried the cash in ciondos (baskets) to National Bank. It was quite a spectacle,” he recalls.
As he rose through the ranks, Mr Githunguri was involved in numerous business ventures that included farming, real estate and hospitality. Even when he was transferred to Mombasa, Mzee Kenyatta continued consulting him for his banking needs.
He confesses that when he got into problems with various organs of government, he could count on Mzee Kenyatta to come to his rescue. One such occasion was when he bought the plot where Nairobi’s iconic Lilian Towers stands in Nairobi. It turned out that there was a 1954 council by-law that prohibited the construction of more than six floors in the vicinity of the Central Police Station.
“I came to know about this by-law when I took the drawing of my 16-floor hotel project to City Council offices. I was denied approval on the basis of the 1954 by-law. I tried to talk to everybody, including the mayor who was then Andrew Ngumba, to no avail. I finally went to see Mzee Kenyatta in Gatundu (his rural home). I showed him my drawings and told him I could not proceed with the project because of a by-law passed by a white man before independence. He was not amused. He, in my presence, telephoned the mayor,” he says.
This is how Mr Githunguri recalls the conversation:
“Ngumba, if I wanted to build a house all the way to heaven, would you have a problem with it?”
“No, Mzee. I would have no problem with it.’’
“If that is so, why do you deny Githunguri approval to build his 16 storeys because of a 1954 by-law?” Pushed to a corner, Ngumba replied that he, similarly, would not have any problem with Githunguri’s project.
“Do you have his drawings there at City Hall?”
“Yes, Mzee. They are here.”
“Do you have a rubber stamp that says ‘approved’? Kenyatta asked.
“Yes, Mzee, I have it.’’
“I’m heading to State House. I want to find you there with the drawings duly approved,” the President said and hung up.
“When we got to State House, Ngumba was already there waiting with the drawings stamped ‘approved.’” He was then asked to review outdated laws.
He recalls that the “approved” stamp was a source of great mirth for Mzee Kenyatta. As they chatted over tea, the President remarked: “Ngumba, that small stamp of yours will one day land you in trouble.”
The building, whose design is compared to a maize cob, was completed in the early 1980s.
Life changed for Mr Githunguri after Mzee’s death. His relationship with the new President Daniel arapMoi was cold. After he left the National Bank in the early 1980s, Mr Githunguri was to spend the next decade battling the government in protracted court cases in what he has always insisted were politically motivated prosecutions.
One such case was an accusation that as the CEO of National Bank, he had violated exchange rate rules. The court cleared him of the accusation only for the case to be revived five years later.
ORDER OF PROHIBITION
Mr Githunguri went to court seeking orders to prohibit his prosecution. At the time, the Judiciary was widely viewed as subservient to the Executive. Fortunately for Mr Githunguri, his application landed before then Chief Justice C.B. Madan.
Justice Madan was one of the few independent-minded judges. He granted Mr Githunguri the orders he sought in one of the most brilliant and poetic judgments to ever come from the local bench.
“Mr Stanley Munga Githunguri, you have been beseeching the court for an order of prohibition. Take the order. The court gives it to you. When you leave, raise your eyes to the hills. Utter a prayer of thankfulness that your fundamental rights are protected under the judicial system of Kenya!”
After the court cases, Mr Githunguri settled for a quiet life in business away from the limelight. In 2007, he ventured into politics and went on to capture the Kiambaa constituency seat then held by politician and businessman Njenga Karume.
In 2013, he vied for the Kiambu senatorial seat but lost to the incumbent, Mr Kimani Wamatangi.
Mr Githunguri has since taken a low public profile as his business continues to flourish.
Source: Daily Nation