South Africa’s Finance Minister Tito Mboweni sparked a diplomatic incident by his vehement defence of the principle of central bank independence last weekend. Mboweni, himself a former governor of the South African Reserve Bank, fired off a volley of tweets at Zambian President Edgar Lungu for summarily firing Denny Kalyalya, governor of the Bank of Zambia.Presidents in Africa must stop this nonsense of waking up in the morning and fire a Central Bank Governor! You cannot do that.
APRM officials say it comes up indirectly among the long list of protocols and standards it recommends countries observe to help achieve its objectives. Dr McBride Nkhalamba of the APRM Secretariat toldthat ‘central bank independence has never really been a conversation within the APRM country review process and this is simply because there is a principle in the AU Constitutive Act which emphasises sovereignty in the management of a country’s affairs.
Mutize doesn’t regard central bank independence as important to a country’s economic performance and success. “I see it as just an issue of separation of powers and maintaining checks and balances. It is no guarantee that a country’s monetary policy will be successful … A country may maintain low inflation and [a] stable exchange rate at the expense of sustainable development, which is the main theme of the AU agenda.
The results of having a central bank beholden not to prudent policy but to the ruling party were vividly It certainly seems Lungu fired Kalyalya because he felt he was holding too tight a rein on monetary policy, thereby failing to stimulate the economy and jeopardising Lungu’s chances of re-election next year. A Patriotic Front ruling party spokesperson went as far as publicly accusing Kalyalya of trying to wreck the economy in order to favour the opposition.
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