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Establishment of African Central Bank: West African sub-region outperforms peers



African Central Bank, West African Monetary Agency

The West African sub-region has performed better with regard to compliance with the African Monetary Cooperation Program (AMCP) and establishment of African Central Bank in the key area of harmonization of monetary policy framework, as compared to the other four sub-regional groups.

According to the Bureau of the Association of African Central Banks (AACB), 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 at its first meeting of 2023 on 9th March 2023 in Dakar, Senegal, at the Headquarters of the Banque Centrale des Etats de l’Afrique de l’Quest (BCEAO), encouraged the other four sub-regions that are yet to develop a harmonized monetary policy framework to do so by sending to the AACB Secretariat the roadmap for developing the harmonized monetary policy framework with reasonable timelines before end of July 2023.

To ensure compliance of all AACB members with AMCP and based on the work of the Expert Group, the Bureau has requested the AUC to 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 African Central Bank (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) on Justice and

Legal Affairs of the AU before submission to the Authority of the Heads of State and Government for their consideration and adoption.
On the subject of the Community of African Banking Supervisors (CABS), the Bureau meeting directed the AACB Secretariat to forward to member Central Banks the harmonized frameworks on Crisis Management and Banking Resolution as well as FinTech Regulation and Supervision, for comments in order for these documents to be finalized.

On the subject of payment systems integration, the Bureau requested the AACB Task Force on integration of African payment systems to continue discussions with Afreximbank on the PAPSS Project in consonance with the vision and strategy of integrating payments systems in Africa before the 2023 Annual Meetings.

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

The first meeting of the AACB was chaired by the 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.

In attendance was the African Union Commission (AUC). Dr. Ernest K.Y. Addison, Governor of Bank of Ghana and Chairman of West African sub-region of the AACB, represented the West African central banks Governors at the Bureau meeting.

The meeting was attended by some Governors, including the Governor of BCEAO, Dr. Jean-Claude Kassi Brou, Governor of Bank of Zambia, Dr. Denny H. Kalyalya, Governor of the Bank of Mozambique, Honourable Rogério Lucas Zandamela and the Governor of the Bank of Burundi, Dieudonne Murengerantwari. The Governor of the Central Bank of Kenya, Dr. Patrick Ngugi Njoroge participated virtually.

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

The Bureau meetings were preceded by Technical Committee meetings involving representatives of the twelve-member central banks. The Technical Committee deliberated and came to consensus on topics and issues that informed the agenda of the Bureau.

The Bureau meeting among others 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 list of decisions of the Assembly of Governors comprised implementation of the African Monetary Cooperation Program (AMCP), 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).

The Bureau also discussed activities of the Community of African Banking Supervisors (CABS), reports on integration of African payment systems, and finalized sub-themes for the 2023 Continental Seminar as well as those for the Symposium of Governors.

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

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