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Bank of Botswana on Thursday celebrated 40 years of existence in a ceremony that was attended by President Ian Khama and other governors from the SADC region. The country’s regulator for commercial banks was established in 1975 through an Act of Parliament but operations started six months later in January 1976. Its mandate includes supervision for commercial banks, managing of prices and financial stability and management of foreign currency exchange reserves. Khama, who was the guest speaker at the occasion, said the establishment of the bank can be traced to 1973 when the founding president appointed a commission led by Quill Hermans who became the founding governor to examine options, given the dissatisfaction at the time with arrangements over being a member of the Rand Monetary Area. “The Commission concluded that the country should seize the opportunity to leave the Rand Monetary Area and establish a full-fledged central bank and national currency,” Khama said.
He said in four decades of existence, the bank has ably lived up to expectations in delivering on other broad national socio-economic mandates, despite the many challenges experienced by developed and developing countries alike. “We are aware that the last four decades have witnessed a rapid pace of global economic and financial interconnectedness, with a relative shift in international economic power centres. These developments have created stresses and strains that have often severely affected developing countries. Botswana has not been spared the impact of the global economic and financial ups and downs,” he said. Khama said it is during those times that the Central Bank provided government with sound economic advice. The bank is currently led by Linah Mohohlo and others who have served in the same position include Quill Hermans – the founding governor – former President Festus Mogae and former Finance Minister Baledzi Gaolathe.
During a symposium held still on Thursday as part of the commemoration to celebrate BoB’s anniversary, Dr Donald Kabureka – the main speaker during the symposium – said there is a need to broaden the mandates of the central banks. Kabureka, who is the former president of African Development Bank (ADB), emphasized the need to increase mandates to address factors such as inequalities, unemployment and financial inclusion. The symposium which was held under the theme “Emerging Central Banks’ roles – Policies and Strategies” was a platform to discuss new roles and responsibilities that central banks can pursue. Kaberuka said the 2008 global crisis changed totally the landscape on which the central banks operate and has recommended a transformational agenda that will see on how central banks can assist to build the future and expand on financial inclusion and services. He said the current system used by many has left a huge population out of the economic activity due to the fact that if one does not have a bank account, they do not automatically participate in the economy.
The governor for Bank of Zambia, Dr Denny Kalyalya also shared the same thoughts as Kabureka that the 2008 global crisis brought a new change on how the central bank is supposed to operate. He said there is a need for flexibility on the functions of central banks. Kalyalya also agreed that there is need to broaden mandates of central banks, saying in Europe the central banks’ mandates are widely broadened and said that should also be the case here. “The issues that we are dealing with are ever-changing. We need to invest in capacitating our institutions and invest in human resources,” said Kalyalya. He said central banks are no longer institutions that look at the core mandate. “We are looking at other factors such as financial inclusion,” he said. Kalyalya also recommended regional integration of central banks, saying such is important to push for the same agenda on regional perspective. He said there is long way to go in terms of the mandate, but said approach also has to change.