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Last Updated:  Tuesday, 4 March, 2003, 17:23 GMT
Kenyan bank furore claims second scalp
Nahashon Nyagah, governor, Central Bank of Kenya
Nahashon Nyagah had worked at the central bank since 1978
The collapse of Nairobi-based Euro Bank, and with it pensions savings for thousands of workers, has claimed another senior scalp - the head of Kenya's central bank.

Nahashon Nyagah, governor of the Central Bank of Kenya, stepped down after being criticised for failing to prevent the loss of 1.4bn Kenyan shillings (11.6m; $18m) which state organisations had deposited in Euro Bank.

The cash lost included 958m shillings in pension funds deposited by state-owner health institutions, including Kenyatta Hospital, East Africa's largest hospital.

Critics, including Health Minister Charity Ngilu, have demanded that Mr Nyagah take responsibility.

The central bank put Euro Bank into liquidation on 21 February, prompting frantic searches for the lost funds.

Bank career

Mr Nyagah's resignation comes a day after John Munge, Kenya's chief taxman, quit.

Mr Munge, commissioner-general of the Kenya Revenue Authority, was a director of Euro Bank, and had previously worked at another bank that collapsed.

Mr Nyagah, 48, has worked in the central bank since 1978, and took a key role in pensions provision as chief executive of Kenya' s Retirements Benefits Authority.

He was appointed to a four-year term as governor two years ago.

He has been replaced by Andrew Mullei, executive director of the International Centre for Economic Growth.

Mr Nyagah's resignation was confirmed by Kenyan Finance Minister David Mwiraria.

James Whittington, BBC Africa Business editor
"It's been a dramatic day here in Nairobi..."

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