We Must Ring-fence the Central Bank!
A recent contribution in the Senate by Senator Rawdon Adams continues to resonate with the blogmaster – Senator Rawdon Adams Sobering Intervention in the Debt Restructure Debate. What was responsible for the Barbados brand? A brand that was the envy of the Caribbean and wider afield?
A key element that contributed to brand Barbados was the respect locals and those afar held for key institutions. The blogmaster points to the Central Bank of Barbados as one of those institutions.
Under the leadership of the former Governor the reputation of the Central Bank slipped to a level that was embarrassing. From performing a statistical analysis which challenged the Barbados Statistical Service (BSS) the agency recognized in law to supply statistical analysis on the economy, to banning media personnel from press briefings, to authoring gimmicky PR campaigns to sell government guilt edge paper to list a few non redeeming activities.
The blogmaster recently read a speech by the Governor of the Bank of Uganda, Professor Emmanuel Tumusiime-Mutebile on the subject – The importance of central bank independence while ensuring public accountability. It hammered the point that we need to ring fence the Central Bank from political interference by making the governance and oversight structure more robust. Given the reports of interference of the NIS fund by politicians the same argument can be made –Government MUST Clear the Air on the State of the NIS Fund, it is Our RH Lifeline.
Given the lack of confident the Central Bank of Barbados has suffered, particularly in the last 10 years- what Professor Tumusiime-Mutebile had to say at the hosting of the parliament of Ghana Finance Committee Members meeting the blogmaster found instructive.
It is a short speech, here are a few salient points:
- In 1995 the Constitution was changed to confer independence on the Bank of Uganda i.e.“In performing its functions, the Bank of Uganda shall conform to this Constitution but shall not be subject to the direction or control of any person or authority.”
- Key bodies within parliament provides oversight 1. Committee on Commissions, Statutory Authorities, and State Enterprises AND the Public Accounts Committee. The annual report and audited accounts are submitted by the Auditor General to the Speaker of Parliament who may exercise discretion by recommending them to a special committee of parliament.
- Staff of the Central Bank, including the Governor, are asked to routinely appear before the special committees of parliament to answer questions about bank operations or elucidate on economic and financial issues
Read the speech for yourself.