Your Excellency the Guest of Honour;
Honourable Chairman of the Board of Governors of the
Assembly of the Association of African Central Banks;
Honourable Governors;
Distinguished Delegates;
Ladies and Gentlemen.
I greet everyone of you.
I record profound appreciation, through Governor Mr. Harvesh Kumar Seegolam to the people and Government of the Republic of Mauritius for graciously hosting the 2024 Assembly of the
Association of African Central Banks.
I deeply regret my inability to be with you. Exigencies of duty have not made it possible to be in this important meeting.
But I am with you in spirit and wish you successful outcomes of the deliberations.
We are meeting at a time of challenging developments in the national and world economies.
For this meeting, let me say that the COVID-19 Pandemic, among others, led to quantitative easing in developed countries, which, in turn, led to growing money supply by as much as 40% in some jurisdictions, and, consequently, rising levels of inflation.
Shortly after that, the sanctions emerging from the conflict in Ukraine caused global supply disruptions which in turn fueled inflation.
In both cases, interest rates also rose, and in developing countries, this led to higher debt servicing payments and repayments as well as currency depreciations.
In some parts of Africa, inflationary pressures are also coming from drought situations, complemented with energy shortages for those countries which depend on hydroelectricity.
Against this background, we can recall the advice of the late
Milton Friedman and I quote him: “Inflation is always and everywhere a monetary phenomenon.”
From this quote, you as the African Monetary authorities have the supreme duty to bring down the levels of inflation across Africa, which are currently in the range of single digit to threedigit levels across our countries, the highest being 157.9%.
Bringing down inflation would result in improving the welfare of our people.
Equally important, reducing inflation would result in macroeconomic and financial stability and create better conditions for inclusive growth and sustainable development, including the development of our emerging stock, bond and mortgage markets.
As you strive to leverage big data and artificial intelligence to complement interest rates in bringing down inflation, I am sure all of you are fully aware that effectively harnessing these is anchored on investments in human capital, physical Infrastructure as well as affordable and reliable supply of energy.
This precondition brings us back to the agenda of promoting inclusive growth and sustainable development. Although this is not your area of activity as our Monetary authorities, you create the necessary conditions for the effective execution of this agenda by our authorities managing the real sector of the African economy.
In addition, reducing levels of inflation would create a conducive environment for effective implementation of the macroeconomic convergence criteria of the African Monetary Program adopted by the Assembly of the African Union Heads of State and Government in 2022.
We require effective and timely implementation of the macroeconomic convergence criteria to lay the groundwork for the establishment of the African Central Bank, and immediately after that, a single African currency.
We need a single African currency to, among others, increase Intra-African trade flows, and this is key to strengthening the African economy and making it more resilient to endogenous and exogenous shocks.
My colleague, Mr. Djamel Ghrib, the Director of Economic Development Integration and Trade will brief you on the state of play and the way forward on the draft Statutes of the African Monetary Institute, which will among others, monitor implementation of the macroeconomic convergence criteria.
The urgent and effective implementation of the macroeconomic convergence criteria is instrumental for continental economic integration and the establishment of the African Central Bank.
In addition, the permanent membership of the African Union in the G20 provides prospects for the Chief Executive Officer of the African Monetary Institute, when it is operational, to be a member of the African Union delegations to the G20 Finance Ministers and Central Bank Governors meetings as well as the working groups of the G20 Finance Track.
When the African Monetary Institute transforms into the African Central Bank, the Governor will be attending the G20 Finance Ministers and Central Bank Governors meetings since this is one of the financial institutions of the African Union, together with the African Monetary Fund, African Investment Bank and the Pan African Stock Exchange.
A new development is the operationalization of the African Credit Rating Agency, which will, among others, contribute to the development of a Pan African capital market.
I will conclude my statement by, once more, calling on you as our Monetary authorities to come up with practical measures to bring down levels of inflation across Africa and contribute to improving the welfare of Africans.
I thank you for your kind attention and look forward to reading your outcome documents.
