In the intricate dance of global economics, the African Central Bank Governors emerge as key orchestrators, wielding immense influence through their deftly crafted monetary policies. In the domain of fiscal intricacies, these leaders meticulously steer their nations towards stability and growth. Their strategies resonate across borders, influencing not just local economies but also shaping their region and the broader continent’s financial landscape. As the year 2023 unfolded, their decisions became pivotal brushstrokes on the canvas of Africa’s financial destiny.
The term “monetary policy” describes the precise measures the Central Bank takes to control the amount, cost, and value of money in the economy to meet the macroeconomic goals of the government.
In many nations, the laws that establish the central bank specifically declare the goals of monetary policy; in other nations, they do not. While monetary policy goals might differ from nation to nation, there are two basic schools of thought. While the second approach aims to achieve price stability and other macroeconomic goals, the first view advocates for monetary policy to achieve price stability, and these decisions are doled out by the governors. “In monetary policy, African Central Bank governors are the architects of economic resilience, shaping a future where stability and growth coalesce.” Economic Analyst, Jane M. Financials.
The function of central banks in guiding a country’s financial course is critical in the dynamic world of global economics. This article lists the outstanding monetary policies of twenty African Central Bank governors. These influential people’s financial plans for 2023 not only show their dedication to stability but also influence the course of their respective countries’ economies.
Hassan Abdullah: The Central Bank of Egypt’s (CBE) 2023 Monetary Policies
The Central Bank of Egypt (CBE) navigated a turbulent year in 2023, juggling conflicting priorities amid an inflationary environment, global uncertainties, and a continued focus on economic growth. Here’s a summary of their key monetary policies:
The Central Bank of Egypt (CBE) has implemented a cautious approach to managing inflation, gradually raising key interest rates to curb credit growth. The CBE has also adopted a flexible exchange rate policy to preserve foreign exchange reserves and boost export competitiveness. The CBE has also implemented targeted credit facilities for priority sectors and collaborated with the government on growth initiatives.
Hussein Yahya Jangoul al-Basha: Sudan’s Monetary Policies in 2023
Sudan’s monetary policies in 2023 were shaped by an extremely challenging economic environment, marked by political instability, armed conflict, and severe food insecurity.
The Central Bank of Sudan (CBOS) aimed to stabilise the Sudanese Pound (SDG) through controlled depreciation, currency auctions, and tightening monetary policy. However, inflation reached unprecedented levels in 2023, driven by depreciation, food price hikes, and supply chain disruptions. Additional measures were needed to control inflation.
Tightening Monetary Policy: The CBOS increased reserve requirements for banks, limiting their lending capacity and aiming to reduce the money supply and curb inflation.
Central Bank of Mauritius Monetary Policies in 2023
Harvesh Kumar Seegolam, the Bank of Mauritius (BoM), implemented a cautious and accommodative monetary policy stance in 2023.
The Monetary Policy Committee (MPC) plans to reduce headline inflation to 2-5% by 2024 and maintain real GDP growth between 6.5-7.5% in 2023. Measures include a new monetary policy framework, open market operations, and 12% reserve requirements for commercial banks.
South Sudan’s Monetary Policies in 2023
The Bank of South Sudan (BoSS) aims to stabilise the economy by managing inflation, maintaining exchange rate stability, improving financial stability, supporting economic growth, and increasing foreign exchange reserves.
The BoSS, under James Alic Garang’s leadership, has implemented currency auctions, strengthened the banking system, encouraged business lending, and boosted foreign exchange reserves. It uses the Reserve Money Targeting Framework to manage monetary policy, releases a yearly statement, and regularly holds currency auctions to stabilise the SSP.
Dr. Denny Kalyalya, The Bank of Zambia (BoZ)
The Bank of Zambia (BoZ) is the central bank of Zambia, with headquarters centred in Lusaka. The bank’s major duty is to formulate and carry out monetary policies that preserve the nation’s economic stability. The Bank is a prominent member of the Alliance for Financial Inclusion and actively advocates for policies about financial inclusion.
Announced by Governor Dr. Denny Kalyalya, the Bank of Zambia raised the monetary policy rate by 50 basis points to 10.0% in July 2023, and in November 2023, he raised the monetary policy rate by 100 basis points to 11.0%. This decision was informed by recent and projected inflation, moving further away from the 6-8% target band.
Salah Eddine Taleb, Bank of Algeria
Under the Bank of Algeria’s monetary policies in 2023, under the leadership of Salah Eddine Taleb, the Governor of the Bank has struck a balance between promoting economic growth and the need to keep inflation under check.
The Central Bank maintained a 3% discount rate for 2023 to encourage borrowing and economic activity. To reduce inflation, the bank implemented policies like raising reserve needs and open market operations. Inflation reached 9.7% in 2022 and is expected to reach 8.1% in 2023. Despite challenges, Algeria’s economy grew robustly in 2023 due to rising hydrocarbon costs and public spending.
The Bank of the Republic of Burundi’s Monetary Policies in 2023
In 2023, the Banque de la République du Burundi (BRB) Governor, Jean Ciza, harnessed the country’s central bank and managed a difficult economic environment by enacting monetary policies meant to curb inflation and promote financial stability.
The BRB set a 5% +/- 2% inflation target to support economic expansion and price stability. To achieve this, they tightened monetary policy by raising the reserve requirement ratio and raising the minimum lending rate.
The Central Bank of Liberia (CBL)
In keeping with the mandate of the bank, to promote macroeconomics and financial stability in the nation, the Governor of the Central Bank of Liberia, J. Aloysius Tarlue, and board members took the following decision:
The Monetary Policy Rate (MPR) in Liberia has been raised from 15% to 17.5% to manage inflation and maintain reserve requirement ratios. The Central Bank of Liberia (CBL) has allowed commercial banks to contract Liberian currency outside the banking system and encouraged secondary market transactions for liquidity management. The decision was made due to global growth’s downward trend and high headline inflation.
South African Reserve Bank
According to Lesetja Kganyago, the Governor of the South African Reserve Bank “As we approach the end of the year, easing headline inflation and modest economic growth remain the dominant global economic trends of this past year. Output in the Euro Area is poor, while the robust growth seen in North America is likely to moderate. China’s growth performance is still weak, with few benefits for global commodity prices. Across most regions, monetary policy will continue to focus on achieving inflation targets, while high debt levels will require fiscal consolidation efforts. In the developing world, financing conditions are expected to remain tight and growth moderate.”
With high interest rates and uncertainty, financial markets and asset prices are expected to remain volatile, dampening investor appetite and capital flows. Taking these and other factors into account, the SARB’s forecast for global growth in 2023 is broadly unchanged at 2.7% (from 2.6%) and 2.6% in 2024.
The policy stance aims to anchor inflation expectations more firmly around the midpoint of the target band and to increase confidence in attaining the inflation target sustainably over time. The MPC will seek to look through temporary price shocks and focus on potential second-round effects and the risks of de-anchoring inflation expectations.
Bank of Tanzania’s Monetary Policies in 2023
In 2023, Emmanuel Mpawe Tutuba, the Governor of the Bank of Tanzania (BoT), had to balance the necessity of keeping inflation under control with the promotion of economic growth and the preservation of currency rate stability. The following outlines their main policies:
The Bank of Tanzania tightened its monetary policy, initially targeting a 7% inflation target. However, the target was later reduced to 5.3%. Despite a 5% drop in inflation, it remains higher than the original goal. The Tanzanian government aims to support economic growth, with a 5.3% growth forecast in 2023.
Kamau Thugge: The Central Bank of Kenya’s Monetary Policies in 2023
The Central Bank of Kenya (CBK) faced a turbulent year in 2023, marked by global economic shocks, rising inflation, and a depreciating Kenyan shilling. Their monetary policies aim to:
The Kenyan Central Bank (CBK) initially maintained a stable Central Bank Rate (CBR) of 10.50% to control inflation. However, as inflation soared to 9.2%, two aggressive rate hikes were taken, bringing the CBR to 12.50% by December. The CBK also intervened in the forex market to stabilise the shilling and support economic growth.
Dr. Ernest Kwamina Addison: Ghana’s monetary policies in 2023
A difficult economic environment in 2023 that included growing inflation, currency depreciation, and headwinds to the world economy influenced Ghana’s monetary policies. To strike a balance between promoting economic growth and maintaining price stability, the Bank of Ghana (BoG) used a cautious and data-driven approach. Below is an overview of their main initiatives:
The Bank of Ghana (BoG) has addressed inflation by raising the monetary policy rate from 14.5% to 30%, stabilising the Ghanaian cedi, and promoting economic growth. The BoGhas also intervened in the foreign exchange market to smooth volatility and encourage foreign direct investment. It has also implemented special credit facilities for priority sectors and strengthened the banking system to ensure financial inclusion.
Hon. Buah Saidy: Gambia’s monetary policies in 2023
The Gambia’s monetary policies in 2023 were primarily focused on tackling inflation and stabilising the economy in the face of global challenges. Here’s a summary of the key points:
The Central Bank of the Gambia (CBG) responded to inflation by increasing the monetary policy rate and reducing reserve money growth. Despite inflation concerns, the Gambian economy showed resilience, with projections of 4.3% growth in 2022 and 5.5% for 2023–2025. CBG focused on balancing inflation control with economic activity.
Karamo Kaba: 2023 Monetary Policies of the Central Bank of the Republic of Guinea
The Central Bank of the Republic of Guinea (BCRG) implemented a cautious and accommodative monetary policy stance in 2023, aiming to balance price stability with economic growth. Here are some key points about their policies:
The Guinea Central Bank (BCRG) has implemented a targeted inflation rate of 8% +/- 2% and tightened monetary policy to curb credit growth. The bank has also maintained a flexible exchange rate system and intervened in the forex market to prevent depreciation. The BCRG has also implemented targeted credit facilities for priority sectors, and its GDP is expected to grow by around 5.6% in 2023.
Emmanuel Maluke Letete, Central Bank of Lesotho’s Monetary Policies in 2023
The Central Bank of Lesotho (CBL) navigated a complex economic landscape in 2023, juggling the need for price stability with supporting economic growth while maintaining a fixed exchange rate peg to the South African Rand (ZAR). Here’s a summary of their key policies:
The Central Bank of Lesotho (CBL) maintains the Loti-Rand Peg to the ZAR to control inflation and facilitate cross-border trade. It manages net international reserves to ensure the peg, maintains exchange rate stability, and controls inflation within a 3-5% range. The CBL supports economic growth with a low-key rate and targeted credit facilities for priority sectors. Lesotho’s GDP is expected to grow around 6.5-7.5% in 2023.
Saddek Elkaber: Central Bank of Libya monetary policies 2023
In 2023, the Central Bank of Libya (CBL) had a turbulent year as it worked to reunite its operations following ten years of separation and dealt with an unstable economy characterised by inflation, a declining value of its currency, and persistent post-conflict issues. The following outlines their main monetary policies:
The Central Bank of Lesotho (CBL) maintains the Loti-Rand Peg to the ZAR to control inflation and facilitate cross-border trade. It manages net international reserves to ensure the peg, maintains exchange rate stability, and controls inflation within a 3-5% range. The CBL supports economic growth with a low key rate and targeted credit facilities for priority sectors. Lesotho’s GDP is expected to grow around 6.5-7.5% in 2023.
Bank of Central African States
The six central African nations that make up the Economic and Monetary Community of Central Africa are Cameroon, the Central African Republic, Chad, Equatorial Guinea, Gabon, and the Republic of the Congo. The Bank of Central African States, also known as Banque des États de l’AfriqueCentrale, or BEAC, is the central bank serving these nations, and Abbas Mahamat Tolli is the governor.
Amidst global concerns, the Bank of Central African States (BEAC) implemented a flexible and cautious monetary policy strategy in 2023, adroitly handling the intricacies of a recuperating regional economy.
In 2023, the Bank of Central African States (BEAC) implemented a prudent monetary policy to balance stability and growth in a recovering regional economy. Key actions included maintaining regional price stability, supporting economic activity, managing external shocks, and addressing global commodity price hikes. The BEAC also facilitated access to credit for priority sectors, managed foreign exchange reserves, and collaborated with member governments to mitigate inflationary challenges.
Jean-Claude Brou, Central Bank of the West African States
The Central Bank of West African States serves Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo, which share the common West African CFA franc currency and comprise the West African Economic and Monetary Union.
These monetary policies demonstrate a commitment to fostering economic stability, promoting inclusive growth, and adapting to global challenges in the West African region.
The Central Bank of West African States maintained regional stability by setting an inflation target of 2% and managing credit growth. It also maintained exchange rate stability by managing foreign exchange reserves. The bank supported sustainable growth by facilitating credit for priority sectors and improving financial inclusion for underserved populations. It also adapted to global challenges by collaborating with member governments to mitigate food and energy prices and address potential risks from the global economic slowdown.
Bank of Botswana’s Monetary Policies in 2023 José de Lima Massano
To preserve price stability and foster economic growth, the Bank of Botswana (BoB) adopted a cautious and balanced monetary policy in 2023, navigating a challenging economic environment. Below is an overview of their main initiatives:
Preserving Stability in Prices:
Headline inflation remained within the BoB’s medium-term targeted range of 3-6%, with an average of approximately 3.5% in 2023.
MoPR, or the Monetary Policy Rate: The MoPR was first kept at 2.65% by the BoB for most of the year. In December 2023, it was lowered by 25 basis points to 2.4%. This cautious strategy sought to strike a balance between promoting economic growth and controlling inflation.
John Rwangombwa, National Bank of Rwanda, 2023 Monetary Policies
The National Bank of Rwanda (NBR) implemented a prudent and supportive monetary policy in 2023, aiming to balance price stability with economic growth.
The Rwandan Central Bank (NBR) maintains an inflation target of 2-8% and raised the central bank rate to 7.5% in November 2023 to curb rising food prices. The NBR supports economic growth through liquidity support, targeted credit facilities, and a flexible exchange rate regime.
The year 2023 has proven to be proof of the African Central Bank Governors’ tenacity and flexibility in negotiating the intricate currents of the world economy. Each monetary policy has been a brushstroke on the canvas of the continent’s financial destiny, from inflation targeting to currency stabilization. As we come to the end of our examination of the exceptional monetary policies, it is clear that these Central Bank governors’ choices are critical to achieving sustained economic growth, promoting financial stability, and advancing the developed countries they oversee.
As we conclude our exploration of the exceptional monetary policies set forth by these Central Bank governors, it becomes abundantly clear that their choices wield profound significance. These economic maestros are architects of stability, agents of growth, and custodians of prosperity. Their policies not only navigate the complex currents of global economics but also hold the key to Africa’s sustained growth, financial stability, and advancement.