Renewed strategy for Africa’s development goals
• Emefiele emerges leader of region’s central bank chiefs
The challenge of declining economic fortunes in Africa despite its acclaimed potential has been unanimously taken on by the Assembly of Governors of the Association of African Central Banks (AACB).
The group, which said it has fashioned out its model of unwinding unconventional monetary policies suitable for the Africa, resolved to individually and collectively rev up actions to reclaim the region’s sliding economic numbers.
It, however, called for full reforms agenda, support and harmonization of fiscal and monetary policies by respective governments to achieve the desired objectives.
President Muhammadu Buhari, who stressed the pressing and urgent need to strengthen the economic and monetary integration of Africa in an international environment characterized by weak global demand, also pointed out the challenges of budget deficits, increasing public debt and illicit capital flows.
He noted the importance of collective central banks’ action in the search for lasting solutions to deal with the crisis facing African countries and again, emphasized the need for coordination between monetary and fiscal policy in order to implement appropriate measures to combat these scourges, while encouraging member States to empower their institutions.
He also called for structural transformation of African economies to ensure food self-sufficiency and increased exports of manufactured goods.
The forum, with a Symposium titled Unwinding Unconventional Monetary Policies: Implications for Monetary Policy and Financial Stability in Africa”, pointed out that the unwinding of unconventional monetary policy measures, adopted during the financial crisis by the United States Federal Reserve and central banks of developed countries, could have a negative impact on African countries due to the interconnectedness of economies.
Noting that African countries face challenges, especially the depreciation of the exchange rate and the decline in capital flows, the group pointed out that these could be the result of exit from unconventional monetary policies in the developed countries.
On the other hand, the unwinding of unconventional monetary policy could be an opportunity for African countries to develop appropriate measures to strengthen resilience as a group and in their respective economies in the face of exogenous shocks.
In this regard, the Assembly of Governors said it has become necessary for African countries to diversify their economies and improve exports, while limiting imports, but reiterated the urgent need for coordination between monetary and fiscal policies.
But as a reinforcement to the avowed commitment, the Assembly of Governors has already chosen the theme for the 2017 Symposium- “Prospects for monetary integration in Africa: Lessons learned from the experience of monetary and financial integration of Europe.”
While examining the level of implementation of the African Monetary Cooperation Programme (AMCP), the group decried the inability of African states to sustainably meet some of the criteria for macroeconomic convergence because of the negative impact of the international environment, including the fall in prices of raw materials and commodities.
They called on the respective countries to strengthen efforts at implementing structural reforms, to diversify their economies, improve the business environment and promote intra-regional trade, to strengthen resilience in the face of external shocks.
There was also a review of the implementation of the work programme of the Community of African Banking Supervisors (CABS), which set up an intranet platform to facilitate exchange of information between banking supervisors across Africa.
Already, in efforts to support the actions of the CABS, a project aimed at collecting information on the activities of cross-border banks will be implemented in the coming months, to allow for the identification of risks associated with these activities.
Meanwhile, the Assembly of Governors has elected the Governor of the Central Bank of Nigeria, Godwin Emefiele, as President, to drive the agreed economic and development agenda for the next one year.
According to a communique issued at the end of the meeting, the Governor of the Bank of Ghana, emerged the Chairman of the West African Sub-region; Governor of the Central Bank of Mauritania, Chairman of the North African Sub-region; Governor of the Bank of Central African States, Chairman of the Central African Sub-region; Governor of the Banque de la République du Burundi, Chairman of the East African Sub-region; and Governor of the Central Bank of the Kingdom of Swaziland, Chairman of the Southern African Sub-region.