| Abstract: | Both central bank independence (CBI) 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. This paper compares the level of legal (de jure) independence of a sample of central banks in Africa that are prominent in their geographical regions. These are the central banks of Kenya and Tanzania in eastern Africa; Nigeria and Liberia in western Africa, and South Africa and Botswana in southern Africa. Focusing only on legal criteria of a political and economic nature - the primary policy objective; the governing structure of the central bank and the appointment, tenure and dismissal of the executive officials of the bank; locus of decisionmaking; accountability; financial independence; financing government; and instrument independence - the paper applies these to the African countries under consideration. The study reveals a considerable discrepancy in respect of the degree to which the relevant central banks satisfy the criteria for CBI. None completely satisfies the established criteria, although the Central Bank of Liberia comes close. A great deal of restructuring and convergence to the norms of independence awaits some of the central banks on the way to a possible African Monetary Union and an independent and respected African Central Bank. Bibliogr., note, sum. [ASC Leiden abstract] |
Africana Periodical Literature 
Periodical article
Leiden University catalogue
WorldCat
