African central banks to expand mandate to developmental roles

African central banks may expand their mandates to include developmental roles following recent realisation that recorded successes in price and financial stability are not delivering development goals through jobs and inclusive growth, indications emerged on Thursday.

The central bank governors on Wednesday held deliberations on the appropriateness of their mandates for Africa’s industrialisation. According to Sarah Alade, acting governor, Central Bank of Nigeria (CBN), one key issue that was discussed was whether apex banks in the region should just focus on price and financial stability or also be concerned about developmental goals.

But Alade’s major suggestion which could widely be adopted at that meeting is the consideration of programmes like improving access to finance, promoting financial inclusion and having targeted interventions in the economy as part of the African apex banks’ mandates, going forward.

But analysts said on Thursday that for central banks to drive such developmental roles, they would need to ensure that such do not undermine their primary mandates, while maintaining harmonious relationships with the fiscal and political authorities to avoid any policy clash.

Alade spoke in Abuja at the opening session of a Caucus Meeting of African Central Banks’ Governors at the sidelines of the Seventh Joint Annual Meetings of the ECA Conference of African Ministers of Finance, Planning and Economic Development.

The conference has the theme, ‘Industrialisation for inclusiveness and transformative development in Africa’, which was also adopted for caucus meeting of the apex banks’ governors.

In her speech, Alade noted that although the focus on price and financial stability has served the region well in containing inflation and deepening financial sector, it has failed to bring down unemployment or achieve inclusive growth on the continent. Alade, who chaired the meeting hosted by CBN, also regretted that such failures in development have helped fuel many social problems and general restiveness on the continent.

“As central banks, we must find a way to work together to solve this problem, suggesting developmental role must be part of the agenda of central banks on the African continent”, she told her other African colleagues attending the meeting.

Another issue that was discussed is the possibility of driving payments system inclusiveness for financial stability and transformative development in Africa through increased involvement of the private sector in ensuring improved access to credit.

ONYINYE NWACHUKWU, Abuja