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Are African Central Banks Sufficiently Independent For Monetary Convergence?

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  • Buks Wessels

Abstract

Central bank independence (CBI) is currently a widely debated and topical issue commanding the centre point of many economical and political debates, filling the pages of many scholarly journals. Both central bank independence and accountability are currently regarded as necessary best practices for achieving price stability. The importance of CBI rests on the premise that inflation is primarily a monetary phenomenon, and that the cost of reducing inflation can be lowered by an independent central bank with credibility. Support for CBI also stems from the argument that the power to create money should generally be separated from the power to spend it. This is even more relevant for countries with weak political institutions. However, various studies (cited below) detected lower inflation in those countries where independence of their central banks is the strongest. Countries all over – including some on the African continent – have increased the independence of their central banks accordingly.

Suggested Citation

  • Buks Wessels, 2006. "Are African Central Banks Sufficiently Independent For Monetary Convergence?," South African Journal of Economics, Economic Society of South Africa, vol. 74(2), pages 230-247, June.
    • Handle: RePEc:bla:sajeco:v:74:y:2006:i:2:p:230-247
    DOI: 10.1111/j.1813-6982.2006.00060.x
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    References listed on IDEAS

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    1. Ms. JoAnne Morris & Mr. Tonny Lybek, 2004. "Central Bank Governance: A Survey of Boards and Management," IMF Working Papers 2004/226, International Monetary Fund.
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    Cited by:

    1. Adeabah, David & Abakah, Emmanuel Joel Aikins & Tiwari, Aviral Kumar & Hammoudeh, Shawkat, 2023. "How far have we come and where should we go after 30+ years of research on Africa's emerging financial markets? A systematic review and a bibliometric network analysis," Emerging Markets Review, Elsevier, vol. 55(C).

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