The participants in the 7th meeting of Governors of Eastern Africa, held on Thursday, are confident that they should together pursue the road map agreed for the African Monetary Programme.

In his address, R. Bheenick emphasised on question of governance. He asked:

• Who should decide interest rates? Should a Central Bank be truly independent on these technical matters, or should its technical assessments be continually second-guessed by political placemen on the MPC appointed by the government?
• Who should supervise commercial and other banks and other financial institutions? Is this the proper field for the central bank or as in the UK should that role be displaced to a financial services authority?
• What is the meaning of 'policy' and 'strategy' reserved for the Boards of Banks and how does it differ from 'policy objectives' enshrined in the Bank constitution? Should 'policy' be allowed to stray into the field of 'operational management', where this is entrusted to the Governors and their staff? Should the Board have its fingers in the appointment of staff, the organisation of staff and decisions on the detailed deployment of the budget of the central bank?
• Who should hire and fire the governors and on what grounds? What are the implications for governance in the choice of options, whether by direct appointment by the Board of the Central Bank, or direct appointment by the Minister of Finance; or direct appointment by the PM or by the Head of State?
• Who should appoint the Board of the Central Bank? If, as is often the case, the only shareholder is the government, and for other reasons the Bank must have operational limits, how do we ensure an effective separation of powers?
• How should voting be regulated on the Board of a national or the regional bank we are contemplating? What matters should be decided by unanimity, what by a simple majority, should we consider proportional representation, consensus, or, for the regional matters, touching on discrete national interests, should we have a requirement for even double majority voting, that is, after an agreement by the Bank, a reference back to each nation for ratification?
• What should be the tenure of office for Boards and Governors? Should they have fixed, or open tenure like some judges dependent on 'good behaviour'; should these jobs be open to competition on merit, and with freer movement of labour, should the choices for employment with national and regional banks be limited on grounds of nationality? This issue is hotly debated now with the World Bank and the IMF and where, at least for the Fund, the next Managing Director will be appointed in a different manner than has been the case since its creation.
• How is accountability to be ensured? Is that a matter solely for the Board, or for the shareholders; at national level should there be a crossparty Parliamentary committee of scrutiny; and what do we envisage for our regional bank to safeguard probity and avoid even the suspicion of loose practice?
• What is transparency? Should documents be open to examination by the Board or by Parliament or indeed by the people under freedom of information? How far should voting behaviour be reported; should it be just the overall outcome, or the detailed voting by individual members, as in many Parliaments?
• Who should be the shareholders? Should this be limited to the states or opened to the private sector and to others, and, with the rise in shareholder interest in management in many companies, what should be the shareholder rights and powers in central and regional banks?
• Are central banks for the Governments, or for the people? How should this choice be reflected in the forms of governance?

He concludes that Mauritius has a clear agenda on the current aspects of monetary and fiscal matters. “We are fast moving from management arrangements based on the theory of banking, to results based governance,” says the Governor of BoM.