5 Governors of Africa’s central banks
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a state or formal monetary union and oversees its commercial banking system.
In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base. Most central banks also have supervisory and regulatory powers to ensure the stability of member institutions, prevent bank runs, and discourage reckless or fraudulent behavior by member banks.
Central banks in most developed nations are institutionally independent of political interference. Still, limited control by the executive and legislative bodies exists.
We take a look at 5 governors of Africa’s central banks
1 . Firstly, Abdellatif Jouahri | MOROCCO
Bank al-Maghrib, Morocco’s central bank, cut its policy rate by 25 basis points in March to 2% to counter the effects of a drought and the coronavirus. In April, it tripled the supply of funds to commercial banks and expanded the range of bonds and securities it would accept in exchange for refinancing. The Professional Group of Moroccan Banks agreed to allow individuals and businesses to postpone payment of loan installments for three months upon written request.
2 . Secondly, Patrick Njoroge | KENYA
As Kenya’s tea and flower exports resumed in late July, Central Bank Governor Patrick Njoroge said the country’s economic recovery would be driven by growing remittances from workers abroad and a bumper harvest of corn, the country’s staple.
The central bank lowered its benchmark rate by 125 basis points to 7% at the onset of the crisis. It also lowered reserve requirements and permitted commercial banks to restructure distressed loans.
3 . Thirdly, John Rwangombwa | RWANDA
Rwanda’s central bank responded quickly to address the effects of the coronavirus on its fast-growing economy. In March, it cut bank reserve requirements to ease liquidity constraints.
In April, the central bank cut its benchmark interest rate by 50 basis points to a record low of 4.5%. It also allowed commercial banks to restructure outstanding loans for borrowers facing temporary cash-flow challenges arising from the pandemic.
4 . Another is Lesetja Kganyago | SOUTH AFRICA
The South African Reserve Bank responded aggressively to the coronavirus-driven economic crisis, cutting interest rates five times through July to a record low of 3.5% as the economy weakened and kept inflation low. The country’s inflation rate fell to 2.1% in May, the lowest in more than 15 years.
5 . Lastly, Ernest Addison | GHANA
Governor Ernest Addison led a consolidation of Ghana’s banking system, which reduced the number of banks from 35 to 23 last year. As a result of the reforms, Ghana’s banks were better prepared for the recession.
In mid-March, the central bank cut its policy rate by 150 basis points to 14.5%. It also cut the primary reserve requirement to 8% from 10%, and the capital conservation buffers to 1.5% from 3%.
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