AACB urges harmonisation of Monetary Policy Framework for establishment of African Central Bank

Source the Ghana Report

The Association of African Central Banks (AACB) has urged its member countries to adopt a harmonised monetary policy framework to establish the African Central Bank (ACB).

During its first meeting of 2023 on March 9th in Dakar, Senegal, the AACB Bureau, which comprises the Governors of the central banks of member countries, discussed several issues including the African Monetary Cooperation Program (AMCP) and the ACB.

The Bureau commended the West African sub-region for adopting a harmonised monetary policy framework based on an inflation targeting and a flexible exchange rate regime. The sub-region’s monetary agency, West African Monetary Agency (WAMA), has developed a strategic and operational framework to guide its implementation and adoption by member states. The other four sub-regions were encouraged to follow suit by submitting a roadmap for developing a harmonised monetary policy framework to the AACB Secretariat before the end of July 2023.

To ensure compliance with the AMCP, the Bureau called on the African Union Commission (AUC) to activate the peer review mechanism for monitoring the implementation of macroeconomic convergence criteria. The attainment of the convergence criteria is a prerequisite for establishing the ACB.

The establishment of the ACB will be preceded by the establishment of the African Monetary Institute (AMI) in Abuja. The AMI will undertake all the necessary preparations for the establishment of the ACB. The draft Statutes and Structure of the AMI will be submitted to member central banks for their comments before submission to the Specialised Technical Committee (STC) on Justice and Legal Affairs of the AU and the Authority of the Heads of State and Government for their consideration and adoption.

The Bureau also directed the AACB Secretariat to forward harmonised frameworks on Crisis Management and Banking Resolution and FinTech Regulation and Supervision to member central banks for comments, in order for these documents to be finalised. The AACB Task Force on integration of African payment systems was requested to continue discussions with Afreximbank on the PAPSS Project, with a view to integrating payment systems in Africa before the 2023 Annual Meetings.

Furthermore, the AACB Bureau requested the Working Group to propose principles and a vision for integrating mobile payment systems in Africa. On the mobile payments integration strategy, the AACB Bureau requested the Working Group to propose principles and vision for integrating mobile payment systems in Africa.

The Technical Committee meeting preceded the Bureau meeting and involved representatives of the twelve-member central banks. The committee discussed and reached a consensus on various topics and issues that informed the agenda of the Bureau.

During the meeting, the AACB Bureau reviewed the implementation of the list of decisions made by the AACB Assembly of Governors at its 44th Ordinary Meeting in Banjul, The Gambia. The 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 African Union Commission (AUC) and AACB on the establishment process of the African Central Bank (ACB).

Governors at Bureau Meeting

During the meeting, the Chairperson of the AACB, Governor Buah Saidy of the Central Bank of The Gambia, presided over the meeting. Chairpersons and Vice Chairs of the five sub-regions of the AACB were also present, including Dr. Ernest K.Y. Addison, Governor of the Bank of Ghana and Chairman of the West African sub-region of the AACB, who represented the West African central banks Governors at the Bureau meeting.

Governor Addison was accompanied to the Bureau meeting by Dr. Alberta Hagan, Ag. Head, Governors’ Department and other officials of the Bank.

Governors from various African countries, such as Dr. Jean-Claude Kassi Brou, Governor of the Banque Centrale des Etats de l’Afrique de l’Ouest (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, also attended the meeting. The Governor of the Central Bank of Kenya, Dr. Patrick Ngugi Njoroge, participated virtually.

Furthermore, Deputy Governors from the Bank of Congo and the Reserve Bank of Zimbabwe, Honourable Dieudonne Fikiri Alimasi, and Dr. Innocent Matshe were also present. The Deputy Governor of the Central Bank of Nigeria, Mrs. Aishah Ahmad, participated virtually in the meeting.

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