Central Bank Independence in Sub-Saharan Africa

Abstract

The objective of this paper is to assess the degree of independence of African Central Banks over the period 1990 to 2019. To achieve this objective, we rely on statutory and real central bank indicators developed by (Dumiter & Sorina, 2011). The results show that the degree of political and legal independence is relatively higher in countries with a fixed exchange rate regime (Bank of Central African States (BCAS) and Central Bank of West African States (CBWAS) countries). The index of Central Bank governance and the conduct of monetary policy, on the other hand, is higher in countries with flexible exchange rate regimes. A clear improvement in Central Bank transparency and accountability in monetary policy was revealed in the Central Banks of Botswana, Malawi, Zambia and the CBWAS.