Central Banks discuss establishment of an African Central Bank
The Bureau of the Association of African Central Banks (AACB) convened its first meeting of the year on March 9th, 2023, in Dakar, Senegal, at the headquarters of the Banque Centrale des Etats de l’Afrique de l’Quest (BCEAO). The gathering was presided over by AACB Chairperson, Governor Buah Saidy of the Central Bank of The Gambia, and attended by the Chairpersons and the Vice Chairs of the five sub-regions of the AACB. The African Union Commission (AUC) was also present.
Governor of the Bank of Ghana and Chairman of the West African sub-region of the AACB, Dr. Ernest K.Y. Addison, represented the West African central bank Governors at the Bureau meeting. The meeting was also attended by several Governors, including Dr. Jean-Claude Kassi Brou, Governor of the BCEAO, Dr. Denny H. Kalyalya, Governor of the Bank of Zambia, Honourable Rogério Lucas Zandamela, Governor of the Bank of Mozambique, and Mr. Dieudonne Murengerantwari, Governor of the Bank of Burundi. Meanwhile, Dr. Patrick Ngugi Njoroge, Governor of the Central Bank of Kenya, participated in the meeting virtually.
Before the Bureau meeting, Technical Committee meetings took place, with representatives from the twelve-member central banks convening to deliberate and come to a consensus on topics and issues that would inform the agenda of the Bureau. The Bureau meeting reviewed, among other items, the implementation of decisions made by the AACB Assembly of Governors at its 44th Ordinary Meeting in Banjul, The Gambia. These decisions included the implementation of the African Monetary Cooperation Program (AMCP), the report of the Expert Group on the refinement of the Convergence Criteria of the AMCP, and collaboration between the AUC and AACB on the establishment process of the African Central Bank (ACB). The Bureau also discussed the activities of the Community of African Banking Supervisors (CABS), reports on the integration of African payment systems, and finalized sub-themes for the 2023 Continental Seminar as well as those for the Symposium of Governors.
In terms of compliance with the AMCP and the establishment of the African Central Bank, the West African sub-region performed best compared to the other four sub-regional groups in the key area of harmonization of monetary policy framework. The sub-region has developed and adopted a harmonized monetary policy framework that is based on an inflation targeting and a flexible exchange rate regime. Following the adoption of the common monetary policy framework, the West African Monetary Agency (WAMA) has been working on developing a strategic and operational framework to guide its implementation and adoption by member States in the sub-region. Based on this good performance, the Bureau encouraged the other four sub-regions that are yet to develop a harmonized monetary policy framework to do so by sending a roadmap for developing the harmonized monetary policy framework with reasonable timelines before the end of July 2023 to the AACB Secretariat.
To ensure compliance of all AACB members with AMCP and based on the work of the Expert Group, the Bureau requested that the AUC activate the peer review mechanism for monitoring implementation of the macroeconomic convergence criteria. The attainment of the convergence criteria of the AMCP is a necessary condition for the establishment of an African Central Bank.
The establishment of the ACB will be preceded by the establishment of the African Monetary Institute (AMI) in Abuja to undertake all the necessary preparations for the establishment of the ACB. The Bureau directed that the draft Statutes and Structure of the AMI should be submitted to member central banks for their comments before submission to the Specialized Technical Committee (STC).
